EXHIBIT 4.1
SPHERIS INC.,
THE GUARANTORS NAMED HEREIN
AND
THE BANK OF NEW YORK, AS TRUSTEE
----------
INDENTURE
DATED AS OF DECEMBER 22, 2004
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11% SENIOR SUBORDINATED NOTES DUE 2012
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CROSS-REFERENCE TABLE*
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
--------------- -----------
310(a)(1)................................................. 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ 7.10
(i)(b)................................................ 7.10
(ii)(c)............................................... N.A.
311(a).................................................... 7.11
(b)................................................... 7.11
(iii)(c).............................................. N.A.
312(a).................................................... 2.05
(b)................................................... 13.03
(iv)(c)............................................... 13.03
313(a).................................................... 7.06
(b)(2)................................................ 7.07
(v)(c)................................................ 7.06; 13.02
(vi)(d)............................................... 7.06
314(a).................................................... 4.03; 13.02
(c)(1)................................................ 13.04
(c)(2)................................................ 13.04
(c)(3)................................................ N.A.
(f)................................................... NA
315(a).................................................... 7.01
(b)................................................... 7.05, 13.02
(A)(c)................................................ 7.01
(d)................................................... 7.01
(e)................................................... 6.11
316(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
318(a).................................................... 13.01
(b)................................................... N.A.
(c)................................................... 13.01
----------
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE .................... 1
SECTION 1.01. Definitions ........................................... 1
SECTION 1.02. Other Definitions ..................................... 27
SECTION 1.03. Trust Indenture Act Definitions ....................... 28
SECTION 1.04. Rules of Construction ................................. 28
ARTICLE 2 THE NOTES ..................................................... 29
SECTION 2.01. Form and Dating ....................................... 29
SECTION 2.02. Execution and Authentication .......................... 29
SECTION 2.03. Registrar and Paying Agent ............................ 30
SECTION 2.04. Paying Agent to Hold Money in Trust ................... 31
SECTION 2.05. Holder Lists .......................................... 31
SECTION 2.06. Transfer and Exchange ................................. 31
SECTION 2.07. Replacement Notes ..................................... 33
SECTION 2.08. Outstanding Notes ..................................... 33
SECTION 2.09. Treasury Notes ........................................ 34
SECTION 2.10. Temporary Notes ....................................... 34
SECTION 2.11. Cancellation .......................................... 34
SECTION 2.12. Defaulted Interest .................................... 34
SECTION 2.13. CUSIP or ISIN Numbers ................................. 35
SECTION 2.14. Issuance of Additional Notes .......................... 35
SECTION 2.15. Calculation of Amounts ................................ 36
ARTICLE 3 REDEMPTION AND PREPAYMENT ..................................... 36
SECTION 3.01. Notices to Trustee .................................... 36
SECTION 3.02. Selection of Notes to Be Redeemed ..................... 36
SECTION 3.03. Notice of Redemption .................................. 37
SECTION 3.04. Effect of Notice of Redemption ........................ 37
SECTION 3.05. Deposit of Redemption Price ........................... 38
SECTION 3.06. Notes Redeemed in Part ................................ 38
SECTION 3.07. Optional Redemption; Special Redemption ............... 38
SECTION 3.08. Mandatory Redemption; Open Market Purchases ........... 39
SECTION 3.09. Offer to Purchase by Application of Net Proceeds
Offer Amount ....................................... 39
ARTICLE 4 COVENANTS ..................................................... 41
SECTION 4.01. Payment of Notes ...................................... 41
SECTION 4.02. Maintenance of Office or Agency ....................... 42
SECTION 4.03. Reports ............................................... 42
i
SECTION 4.04. Compliance Certificate ................................ 43
SECTION 4.05. [Intentionally Omitted] ............................... 44
SECTION 4.06. Stay, Extension and Usury Laws ........................ 44
SECTION 4.07. Restricted Payments ................................... 44
SECTION 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries ............................. 49
SECTION 4.09. Incurrence of Indebtedness ............................ 50
SECTION 4.10. Asset Sales ........................................... 51
SECTION 4.11. Transactions with Affiliates .......................... 53
SECTION 4.12. Liens ................................................. 55
SECTION 4.13. Conduct of Business ................................... 55
SECTION 4.14. Corporate Existence ................................... 55
SECTION 4.15. Offer to Repurchase upon Change of Control ............ 55
SECTION 4.16. No Senior Subordinated Debt ........................... 56
SECTION 4.17. Future Guarantees by Domestic Subsidiaries ............ 57
SECTION 4.18. Limitation on Preferred Stock of
Restricted Subsidiaries ............................ 57
ARTICLE 5 SUCCESSORS .................................................... 57
SECTION 5.01. Merger, Consolidation, or Sale of Assets .............. 57
SECTION 5.02. Successor Corporation Substituted ..................... 58
ARTICLE 6 DEFAULTS AND REMEDIES ......................................... 59
SECTION 6.01. Events of Default ..................................... 59
SECTION 6.02. Acceleration .......................................... 61
SECTION 6.03. Other Remedies ........................................ 61
SECTION 6.04. Waiver of Past Defaults ............................... 61
SECTION 6.05. Control by Majority ................................... 62
SECTION 6.06. Limitation on Suits ................................... 62
SECTION 6.07. Rights of Holders of Notes to Receive Payment ......... 62
SECTION 6.08. Collection Suit by Trustee ............................ 63
SECTION 6.09. Trustee May File Proofs of Claim ...................... 63
SECTION 6.10. Priorities ............................................ 63
SECTION 6.11. Undertaking for Costs ................................. 64
ARTICLE 7 TRUSTEE ....................................................... 64
SECTION 7.01. Duties of Trustee ..................................... 64
SECTION 7.02. Rights of Trustee ..................................... 65
SECTION 7.03. Individual Rights of Trustee .......................... 66
SECTION 7.04. Trustee's Disclaimer .................................. 66
SECTION 7.05. Notice of Defaults .................................... 67
SECTION 7.06. Reports by Trustee to Holders of the Notes ............ 67
SECTION 7.07. Compensation and Indemnity ............................ 67
SECTION 7.08. Replacement of Trustee ................................ 68
SECTION 7.09. Successor Trustee by Merger, etc ...................... 69
ii
SECTION 7.10. Eligibility; Disqualification ......................... 69
SECTION 7.11. Preferential Collection of Claims Against Company ..... 70
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION .............. 70
SECTION 8.01. Option to Effect Legal Defeasance or
Covenant Defeasance ................................ 70
SECTION 8.02. Legal Defeasance and Discharge ........................ 70
SECTION 8.03. Covenant Defeasance ................................... 70
SECTION 8.04. Conditions to Legal or Covenant Defeasance ............ 71
SECTION 8.05. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions ........... 72
SECTION 8.06. Satisfaction and Discharge ............................ 73
SECTION 8.07. Repayment to Company .................................. 73
SECTION 8.08. Reinstatement ......................................... 74
SECTION 8.09. Survival .............................................. 74
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER .............................. 74
SECTION 9.01. Without Consent of Holders of Notes ................... 74
SECTION 9.02. With Consent of Holders of Notes ...................... 75
SECTION 9.03. Compliance with Trust Indenture Act ................... 77
SECTION 9.04. Revocation and Effect of Consents ..................... 77
SECTION 9.05. Notation on or Exchange of Notes ...................... 77
SECTION 9.06. Trustee to Sign Amendments, etc ....................... 77
SECTION 9.07. Additional Voting Terms; Calculation of
Principal Amount ................................... 78
ARTICLE 10 SUBORDINATION ................................................ 78
SECTION 10.01. Agreement to Subordinate .............................. 78
SECTION 10.02. Liquidation, Dissolution, Bankruptcy .................. 78
SECTION 10.03. Default on Senior Debt of the Company ................. 79
SECTION 10.04. Acceleration of Payment of Notes ...................... 80
SECTION 10.05. When Payment or Distribution Must Be Paid Over ........ 80
SECTION 10.06. Subrogation ........................................... 80
SECTION 10.07. Relative Rights ....................................... 80
SECTION 10.08. Subordination May Not Be Impaired by Company .......... 80
SECTION 10.09. Rights of Trustee and Paying Agent .................... 81
SECTION 10.10. Payment or Distribution or Notice to Representative ... 81
SECTION 10.11. Not To Prevent Events of Default or Limit Right
To Accelerate ...................................... 81
SECTION 10.12. Trust Moneys Not Subordinated ......................... 81
SECTION 10.13. Trustee Entitled To Rely .............................. 82
SECTION 10.14. Trustee To Effectuate Subordination ................... 82
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt
of the Company ..................................... 82
SECTION 10.16. Reliance by Holders of Senior Debt of the Company on
Subordination Provisions ........................... 82
iii
ARTICLE 11 GUARANTEES ................................................... 83
SECTION 11.01. Guarantees ............................................ 83
SECTION 11.02. Limitation on Liability ............................... 85
SECTION 11.03. Successors and Assigns ................................ 85
SECTION 11.04. No Waiver ............................................. 85
SECTION 11.05. Modification .......................................... 85
SECTION 11.06. Guarantors May Consolidate, etc., on Certain Terms .... 86
SECTION 11.07. Release of Guarantor .................................. 87
SECTION 11.08. Contribution .......................................... 87
SECTION 11.09. Execution of Supplemental Indenture for
Future Guarantors .................................. 87
ARTICLE 12 SUBORDINATION OF GUARANTEES .................................. 88
SECTION 12.01. Agreement To Subordinate .............................. 88
SECTION 12.02. Liquidation, Dissolution, Bankruptcy .................. 88
SECTION 12.03. Default on Senior Debt of Guarantor ................... 88
SECTION 12.04. Demand for Payment .................................... 89
SECTION 12.05. When Payment or Distribution Must Be Paid Over ........ 89
SECTION 12.06. Subrogation ........................................... 89
SECTION 12.07. Relative Rights ....................................... 89
SECTION 12.08. Subordination May Not Be Impaired by Company .......... 90
SECTION 12.09. Rights of Trustee and Paying Agent .................... 90
SECTION 12.10. Payment or Distribution or Notice to Representative ... 91
SECTION 12.11. Article 12 Not To Prevent Events of Default or
Limit Right To Demand Payment ...................... 91
SECTION 12.12. Trustee Entitled To Rely .............................. 91
SECTION 12.13. Trustee To Effectuate Subordination ................... 91
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Debt of Guarantor .................................. 91
SECTION 12.15. Reliance by Holders of Senior Debt of Guarantors on
Subordination Provisions ........................... 92
ARTICLE 13 MISCELLANEOUS ................................................ 92
SECTION 13.01. Trust Indenture Act Controls .......................... 92
SECTION 13.02. Notices ............................................... 92
SECTION 13.03. Communication by Holders of Notes with Other Holders
of Notes ........................................... 93
SECTION 13.04. Certificate and Opinion as to Conditions Precedent .... 93
SECTION 13.05. Statements Required in Certificate or Opinion ......... 94
SECTION 13.06. Rules by Trustee and Agents ........................... 94
SECTION 13.07. Governing Law ......................................... 94
SECTION 13.08. No Adverse Interpretation of Other Agreements ......... 94
SECTION 13.09. Successors ............................................ 94
SECTION 13.10. Severability .......................................... 94
SECTION 13.11. Counterpart Originals ................................. 95
iv
SECTION 13.12. Table of Contents, Headings, etc ...................... 95
SECTION 13.13. Currency of Account; Conversion of Currency;
Foreign Exchange Restrictions ...................... 95
APPENDIX AND EXHIBITS
Appendix - Rule 144A/Regulation S Appendix:
Provisions Relating to Initial Notes, Additional Notes and Exchange
Notes
EXHIBIT INDEX
Exhibit A - Initial Note
Exhibit B - Exchange Note
Exhibit C - Form of Transferee Letter of Representation
Exhibit D - Form of Supplemental Indenture
v
INDENTURE dated as of December 22, 2004 among Spheris Inc., a Delaware
corporation (the "Company"), the Guarantors (as herein defined) and The Bank of
New York, a New York banking corporation, 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 (a) $125,000,000 aggregate
principal amount of the Company's 11% Senior Subordinated Notes due December 15,
2012 (the "Initial Notes") in the form of Exhibit A hereto issued on the date
hereof, (b) any Additional Notes (as defined herein) that may be issued after
the date hereof and (c) if and when issued as provided in the Registration
Agreement (as defined in Appendix A hereto (the "Appendix")) or otherwise
registered under the Securities Act (as defined in the Appendix) and issued, the
Company's 11% Senior Subordinated Notes due December 15, 2012 (the "Exchange
Notes") and, together with the Initial Notes, the "Notes")) issued in the
Registered Exchange Offer (as defined in the Appendix) in exchange for any
Initial Notes or otherwise registered under the Securities Act and issued in the
form of Exhibit B hereto. Subject to the conditions and compliance with the
covenants set forth herein, the Company may issue an unlimited aggregate
principal amount of Additional Notes.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Acquired Indebtedness" means Indebtedness (i) of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with or into the Company or
any of its Subsidiaries or (ii) that is assumed in connection with the
acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such acquisition, merger or
consolidation. Acquired Indebtedness shall be deemed to have been incurred, with
respect to clause (i) of the preceding sentence, on the date such Person becomes
a Restricted Subsidiary and, with respect to clause (ii) of the preceding
sentence, on the date of consummation of such acquisition of assets.
"Additional Interest" means all additional interest then owing pursuant to
Section 2 of the Registration Rights Agreement.
"Additional Notes" means, subject to the Company's compliance with Section
4.03, 11% Senior Subordinated Notes Due 2012 issued from time to time after the
Issue Date under the terms of this Indenture (other than pursuant to Section
2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange Notes issued
pursuant to an exchange offer for other Notes outstanding under this Indenture).
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing. Notwithstanding the foregoing, no Person (other
than the Company or any Subsidiary of the Company) in whom a Securitization
Entity makes an Investment in connection with a Qualified Securitization
Transaction shall be deemed to be an Affiliate of the Company or any of its
Subsidiaries solely by reason of such Investment.
"Applicable Premium" means, with respect to any Note on any applicable
redemption date, the greater of:
(1) 1% of the then outstanding principal amount of the Note; and
(2) the excess of:
(a) the present value at such redemption date of (i) the redemption
price of the Note, as applicable, at December 15, 2008 such redemption
price being set forth in Section 3.07 plus (ii) all required interest
payments due on the Note, as applicable, through December 15, 2008
(excluding accrued but unpaid interest), computed using a discount rate
equal to the Treasury Rate with respect to the Notes as of such redemption
date plus 50 basis points; over
(b) the then outstanding principal amount of the Note.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, or (b) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) other
than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment, disposition or other transfer for value by the Company
or any of its Restricted Subsidiaries (including, without limitation, any Sale
and Leaseback Transaction) to any Person other than the Company or a Restricted
Subsidiary of the Company of: (a) any Capital Stock of any Restricted Subsidiary
of the Company, or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales or other dispositions shall not
include: (i) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of less
than $1.5 million; (ii) the sale, lease, conveyance, disposition or other
transfer of all or substantially all of the assets of the Company as permitted
by Section 5.01 hereof or any disposition that constitutes a Change of Control;
(iii) the sale or discount, in each case without recourse, of accounts
receivable arising in the ordinary course of business, but only in connection
with the compromise or collection thereof; (iv) disposals or replacements of
obsolete or worn-out equipment in the ordinary course of business of the Company
and its Restricted Subsidiaries; (v) the sale, lease, conveyance, disposition or
other transfer by the Company or any Restricted Subsidiary of assets or property
to one or more Restricted
Subsidiaries in connection with Investments permitted by Section 4.07 hereof or
pursuant to any Permitted Investment; (vi) sales of accounts receivable,
equipment and related assets (including, without limitation, contract rights) of
the type specified in the definition of "Qualified Securitization Transaction"
to a Securitization Entity for the fair market value thereof, including cash in
an amount at least equal to 75% of the fair market value thereof as determined
in accordance with GAAP (for the purposes of this clause (vi), Purchase Money
Notes shall be deemed to be cash); (vii) dispositions of cash or Cash
Equivalents; (viii) the creation of a Lien (but not the sale or other
disposition of the property subject to such Lien); (ix) a disposition of
inventory in the ordinary course of business; (x) the licensing or sublicensing
of intellectual property or other general intangibles and licenses, leases or
subleases of other property; and (xi) foreclosure on assets.
"Bank Indebtedness" means all Obligations of the Company and its
Subsidiaries pursuant to the Credit Facility.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each class
of Common Stock and Preferred Stock, of such Person and (ii) with respect to any
Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligations" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means: (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States of
America, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the three highest ratings
obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the
time of acquisition, having a rating of at least A-1 from S&P or at least P-1
from ▇▇▇▇▇'▇ or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
investments; (iv) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank or by a bank organized under the
laws of any foreign country recognized by the United States of America the
long-term debt of which is rated at least "A" or the equivalent thereof by S&P,
or "A" or the equivalent thereof by ▇▇▇▇▇'▇, in each case having at the date of
acquisition thereof combined capital and surplus of not less than $500.0 million
(or the foreign currency equivalent thereof); (v) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; (vi) investments in any
investment company or money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above;
and (vii) other short term investments used by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company or Holdings to any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), other than to the Company (in the
case of the assets of Holdings), the Permitted Holders or their Related Parties
or any Permitted Group; (ii) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of the
Company (whether or not otherwise in compliance with the provisions of this
Indenture); (iii) any Person or Group (other than the Permitted Holders or their
Related Parties or any Permitted Group) shall become the beneficial owner,
directly or indirectly, of shares representing more than 40% of the total
ordinary voting power represented by the issued and outstanding Capital Stock of
the Company or Holdings at a time when the Permitted Holders and their Related
Parties in the aggregate own a lesser percentage of the total ordinary voting
power represented by such issued and outstanding Capital Stock; or (iv) the
first day on which a majority of the members of the Board of Directors of the
Company or Holdings are not Continuing Directors.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
indenture securities.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of such Person's: (i) Consolidated Net Income; and
(ii) to the extent Consolidated Net Income has been reduced thereby: (A) all
income taxes and foreign withholding taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance
with GAAP for such period; (B) Consolidated Interest Expense; (C) Consolidated
Non-cash Charges less any non-cash items increasing Consolidated Net Income for
such period (other than normal accruals in the ordinary course of business), all
as determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP; (D) any cash charges resulting from the
Transactions that are incurred prior to the six month anniversary of the Issue
Date; (E) restructuring costs and acquisition integration costs and fees,
including cash severance payments made in connection with acquisitions, as
certified in writing by the chief financial officer of the Company stating in
detail (i) the amount of such costs and (ii) that such costs are based on the
reasonable good faith belief of such officer at the time of such certification;
and (F) management fees paid to Parthenon Capital, LLC or its Affiliates prior
to the Issue Date. Notwithstanding the preceding sentence: (x) amounts under
clauses (ii)(A)-(F) relating to a Restricted Subsidiary of a Person will be
added to Consolidated Net Income to compute Consolidated EBITDA of such Person
only if (and in the same proportions) that net income (loss) of such Restricted
Subsidiary was included in calculating Consolidated Net Income of such Person;
and (y) to the extent the amounts set forth in clauses (ii)(A)-(F) are in excess
of those necessary to offset a net loss of such Restricted Subsidiary, such
excess will be added to Consolidated Net Income to compute Consolidated EBITDA
only if (and in the same proportion that) net income of such Restricted
Subsidiary would be included in calculating Consolidated Net Income of such
Person if such Restricted Subsidiary had generated net income instead of net
loss.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four-Quarter Period") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which internal financial statements are available (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the
Four-Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to: (i) the incurrence or repayment of any
Indebtedness or the issuance of any Designated Preferred Stock of such Person or
any of its Restricted Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or repayment
of other Indebtedness or the issuance or redemption of other Preferred Stock
(and the application of the proceeds thereof), other than the incurrence or
repayment of Indebtedness in the ordinary course of business for working capital
purposes pursuant to revolving credit facilities, occurring during the
Four-Quarter Period or at any time subsequent to the last day of the
Four-Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment or issuance or redemption, as the case may be (and the
application of the proceeds thereof), had occurred on the first day of the
Four-Quarter Period; and (ii) any Asset Sales or other dispositions or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of such Person or one of its
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale or other disposition and without regard to
clause (iv) of the definition of Consolidated Net Income) occurring during the
Four-Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
other disposition or Asset Acquisition
(including the incurrence or assumption of any such Acquired Indebtedness)
occurred on the first day of the Four-Quarter Period. If such Person or any of
its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such
Person had directly incurred or otherwise assumed such other Indebtedness that
was so guaranteed.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio": (i) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (ii) notwithstanding clause (i) of this paragraph, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements; (iii) interest on a Capitalized 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 Capitalized Lease Obligation in accordance with GAAP; (iv) for
purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period; and (v) interest on Indebtedness 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.
For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company
(including pro forma expense and cost reductions). In addition, any such pro
forma calculation, to reflect operating expense reductions reasonably expected
to result from any acquisition or merger, may include adjustments as
appropriate, in the reasonable determination of the Company as set forth in an
Officers' Certificate, that either (a) would be permitted pursuant to Rule 11-02
of Regulation S-X of the Securities Act or (b) have been realized or for which
substantially all the steps necessary for realization have been taken or at the
time of determination are reasonably expected to be taken within 12 months
following any such acquisition, including, but not limited to, the execution or
termination of any contracts, the termination of any personnel or the closing of
any facility, as applicable, provided that such adjustments shall be calculated
on an annualized basis and will be set forth in an Officers' Certificate signed
by the Company's chief financial officer and another officer which states in
detail (i) the amount of such adjustment or adjustments, and (ii) that such
adjustment or adjustments are based on the reasonable good faith beliefs of the
officers executing such Officers' Certificate at the time of such execution.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum of, without duplication: (i) Consolidated Interest Expense; plus
(ii) the product of (x) the amount
of all cash dividend payments on any series of Disqualified Capital Stock and
Designated Preferred Stock of such Person times (y) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
effective consolidated Federal, state and local income tax rate of such Person,
expressed as a decimal (as estimated in good faith by the chief financial
officer of the Company, which estimate shall be conclusive); plus (iii) the
product of (x) the amount of all dividend payments on any series of Preferred
Stock of a Restricted Subsidiary times (y) a fraction, the numerator of which is
one and the denominator of which is one minus the then current effective
consolidated Federal, state and local income tax rate of such Person, expressed
as a decimal (as estimated in good faith by the chief financial officer of the
Company, which estimate shall be conclusive); provided that with respect to any
series of Preferred Stock that did not pay cash dividends during such period but
that is eligible to pay cash dividends during any period prior to the maturity
date of the Notes, cash dividends shall be deemed to have been paid with respect
to such series of Preferred Stock during such period for purposes of this clause
(iii).
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication: (i) the aggregate of all cash and
non-cash interest expense with respect to all outstanding Indebtedness of such
Person and its Restricted Subsidiaries, including the net costs associated with
Interest Swap Obligations, for such period determined on a consolidated basis in
conformity with GAAP, but excluding amortization or write-off of debt issuance
costs; (ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period; (iii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP; (iv)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing; and (v) interest actually paid by
the Company or any such Restricted Subsidiary under any Guarantee of
Indebtedness or other obligation of any other Person.
"Consolidated Leverage Ratio" with respect to any Person as of any date of
determination means, the ratio of (x) consolidated Indebtedness of such Person
as of the end of the most recent fiscal quarter for which internal financial
statements are available to (y) the aggregate amount of Consolidated EBITDA of
such Person for the period of the most recent four consecutive quarters for
which internal financial statements are available, in each case with such pro
forma adjustments to consolidated Indebtedness and Consolidated EBITDA as are
appropriate and consistent with the pro forma provisions set forth in the
definition of Consolidated Fixed Charge Coverage Ratio.
"Consolidated Net Income" means, for any period, the aggregate net income
(or loss) of the Company and its Restricted Subsidiaries for such period on a
consolidated basis, determined in accordance with GAAP and without any deduction
in respect of Preferred Stock dividends; provided that there shall be excluded
therefrom to the extent otherwise included, without duplication: (i) gains and
losses from Asset Sales (without regard to the $1.0 million limitation set forth
in the definition thereof) and the related tax effects according to GAAP; (ii)
gains and losses due solely to fluctuations in currency values and the related
tax effects according to GAAP; (iii) all extraordinary, unusual or non-recurring
charges, gains and losses (including, without limitation, all restructuring
costs, acquisition integration costs and fees, including cash
severance payments made in connection with acquisitions, and any expense or
charge related to the repurchase of Capital Stock or warrants or options to
purchase Capital Stock), and the related tax effects according to GAAP; (iv) the
net income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Restricted Subsidiary of the
Company or is merged or consolidated with or into the Company or any Restricted
Subsidiary of the Company; (v) the net income (but not loss) of any Restricted
Subsidiary of the Company to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of the Company of that
income is prohibited by contract, operation of law or otherwise provided,
however, that a Foreign Subsidiary may agree to restrict its ability to declare
dividends or similar distributions without excluding the net income of such
Foreign Subsidiary from Consolidated Net Income if (a) the agreement that
restricts such ability relates to Permitted Indebtedness described in clause
(xv) of that definition, (b) the proceeds thereof are used, directly or
indirectly through intercompany transfers, to permanently repay Senior Debt or
the Notes of the Company, and (c) the net income of such Foreign Subsidiary,
together with the net income of each other Foreign Subsidiary subject to a
similar restriction, does not exceed 10% of Consolidated Net Income; (vi) the
net loss of any Person, other than a Restricted Subsidiary of the Company; (vii)
the net income of any Person, other than a Restricted Subsidiary of the Company,
except to the extent of cash dividends or distributions paid to the Company or a
Restricted Subsidiary of the Company by such Person; (viii) in the case of a
successor to the referent Person by consolidation or merger or as a transferee
of the referent Person's assets, any earnings of the successor corporation prior
to such consolidation, merger or transfer of assets; (ix) any non-cash
compensation charges and deferred compensation charges, including any arising
from existing stock options and restricted stock resulting from any merger or
recapitalization transaction, including the Transactions; provided, however,
that Consolidated Net Income for any period shall be reduced by any cash
payments made during such period by such Person in connection with any such
deferred compensation, whether or not such reduction is in accordance with GAAP;
(x) inventory purchase accounting adjustments and amortization and impairment
charges resulting from other purchase accounting adjustments with respect to the
Transactions and other acquisition transactions and; (xi) unrealized gains and
losses due solely to fluctuations in currency values and related tax effects
according to GAAP.
"Consolidated Non-cash Charges" means, with respect to any Person, for any
period, the aggregate depreciation, amortization and other non-cash charges,
impairment and expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such charges that require an accrual of or a reserve for cash payments for
any future period other than accruals or reserves associated with mandatory
repurchases of equity securities). For clarification purposes, purchase
accounting adjustments with respect to inventory will be included in
Consolidated Non-cash Charges.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who: (i) was a member of such Board of
Directors on the Issue Date; or (ii) was nominated for election or elected to
such Board of Directors by any of the Permitted Holders or with the approval of
a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Facility) or commercial paper facilities with banks or
other lenders providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) and/or letters of credit or banker's acceptances, together with
related documents (including, without limitation, any guarantee agreements and
security documents).
"Credit Facility" means the Credit Agreement dated as of November 5, 2004
among Spheris Holding II, Inc., Spheris Inc. (formerly known as Spheris Holding,
Inc.) as Borrower, the lenders party thereto in their capacities as lenders
thereunder, JPMorgan Chase Bank, N.A., as administrative agent, and UBS
Securities LLC, as syndication agent, together with the related documents
thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowings thereunder or adding Restricted Subsidiaries of the Company
as additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract or other similar agreement or
arrangement designed to protect the Company or any Restricted Subsidiary of the
Company against fluctuations in currency values.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both, pursuant to the Default
provisions, would be, an Event of Default.
"Designated Noncash Consideration" means the fair market value of any
noncash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is designated as Designated
Noncash Consideration pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the Company
or such Restricted Subsidiary at the time of such Asset Sale. Any particular
item of Designated Noncash Consideration will cease to be considered to be
outstanding once it has been sold for cash or Cash Equivalents. At the time of
receipt of any Designated Noncash Consideration, the Company shall deliver an
Officers' Certificate to the Trustee which shall state the fair market value of
such Designated Noncash Consideration and shall state the basis of such
valuation, which shall be a report of a nationally recognized investment
banking, appraisal or accounting firm with respect to the receipt in one or a
series of related transactions of Designated Noncash Consideration with a fair
market value in excess of $10.0 million.
"Designated Preferred Stock" means Preferred Stock that is so designated as
Designated Preferred Stock, pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the Company,
on the issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in clause (iii)(w) of the first paragraph of Section 4.07
hereof.
"Designated Senior Debt" means (i) the Bank Indebtedness and (ii) any other
Indebtedness constituting Senior Debt which, at the time of determination, has
an aggregate principal amount of, or under which, at the date of determination,
the holders thereof are committed to lend up to, at least $25.0 million and is
specifically designated in the instrument evidencing or governing such Senior
Debt as "Designated Senior Debt" by the Company.
"Disqualified Capital Stock" means with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event: (i) matures or is mandatorily redeemable (other than
redeemable only for Capital Stock of such Person which is not itself
Disqualified Stock) pursuant to a sinking fund obligation or otherwise; (ii) is
convertible or exchangeable at the option of the holder for Indebtedness or
Disqualified Capital Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of the Company or a Restricted Subsidiary); or
(iii) is mandatorily redeemable or must be purchased upon the occurrence of
certain events or otherwise, in whole or in part; in each case on or prior to
(a) the final maturity date of the Notes or (b) the date on which there are no
Notes outstanding; provided, however, that any Capital Stock that would not
constitute Disqualified Capital Stock but for provisions thereof giving holders
thereof the right to require such Person to purchase or redeem such Capital
Stock upon the occurrence of an "asset sale" or "change of control" occurring
prior to the final maturity date of the Notes shall not constitute Disqualified
Capital Stock if: (A) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the terms applicable to the Notes and described in Sections
4.10 and 4.15 hereof, respectively; and (B) any such requirement only becomes
operative after compliance with such terms applicable to the Notes, including
the purchase of any Notes tendered pursuant thereto. The amount of any
Disqualified Capital Stock that does not have a fixed redemption, repayment or
repurchase price will be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were redeemed,
repaid or repurchased on any date on which the amount of such Disqualified Stock
is to be determined pursuant to the Indenture; provided, however, that if such
Disqualified Capital Stock could not be required to be redeemed, repaid or
repurchased at the time of such determination, the redemption, repayment or
repurchase price will be the book value of such Disqualified Capital Stock as
reflected in the most recent internal financial statements of such Person.
"Domestic Subsidiary" means any direct or indirect Restricted Subsidiary of
the Company that is incorporated under the laws of the United States of America,
any State thereof or the District of Columbia.
"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).
"Equity Offering" means any offering of Qualified Capital Stock of
Holdings, any other direct or indirect parent of the Company or the Company;
provided that: (i) in the event of an offering by Holdings, or any other direct
or indirect parent of the Company, Holdings or such other direct or indirect
parent of the Company contributes to the capital of the Company the portion of
the net cash proceeds of such offering necessary to pay the aggregate redemption
price (plus accrued interest to the redemption date) of the Notes to be redeemed
pursuant to Section 3.07(c) hereof; and (ii) in the event such equity offering
is not in the form of a public offering registered under the Securities Act, the
proceeds received by the Company directly or indirectly from such offering are
not less than $10.0 million.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Exchange Notes" has the meaning set forth in the preamble hereto.
"Excluded Contributions" means net cash proceeds, or property other than
cash that would constitute Marketable Securities or Permitted Business, in each
case received by the Company and its Restricted Subsidiaries from:
(i) contributions to its common equity capital; and
(ii) the sale (other than to a Subsidiary or to any management equity
plan or stock option plan or any other management or employee benefit plan
or agreement of the Company or any Subsidiary) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock),
in each case designated as Excluded Contributions pursuant to an Officers'
Certificate on the date such capital contributions are made or the date such
Equity Interests are sold, as the case may be, which are excluded from the
calculation set forth in clause (4)(iii) of Section 4.07 hereof.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting in good
faith, which determination shall be conclusive.
"Foreign Subsidiary" means any Subsidiary of the Company that is not a
Domestic Subsidiary.
"Four-Quarter Period" has the meaning specified in the definition of
Consolidated Fixed Charge Coverage Ratio.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States of America, as in effect as of the Issue Date.
All
ratios and computations based on GAAP contained in this Indenture will be
computed in conformity with GAAP, except as expressly provided in this
Indenture.
"Government Obligations" means U.S. Government Obligations.
"Group" has the meaning specified in the definition of Change of Control.
"Guarantee" means (i) the guarantee of the Notes by the Domestic
Subsidiaries of the Company in accordance with the terms of this Indenture; and
(ii) the guarantee of the Notes by any Subsidiary required under the terms of
Section 4.17 hereof.
"Guarantor" means any Subsidiary that issues a Guarantee; provided,
however, that upon the release and discharge of such Subsidiary from its
Guarantee in accordance with Section 11.07 hereof, such Subsidiary shall cease
to be a Guarantor.
"HealthScribe Acquisition" shall mean the acquisition of HealthScribe,
Inc., a Delaware corporation, by Spheris Holding, Inc. or a Subsidiary Guarantor
pursuant to the Agreement and Plan of Merger dated as of September 20, 2004
among HealthScribe, Inc., MTS Group Holdings, Inc. and HSI Merger Sub. Inc., as
amended.
"Hedging Agreement" means any agreement with respect to the hedging of
price risk associated with the purchase of commodities used in the business of
the Company and its Restricted Subsidiaries, so long as any such agreement has
been entered into in the ordinary course of business and bona fide hedging
purposes (as determined in good faith by the Board of Directors or senior
management of the Company).
"Holder" means a Person in whose name a Note is registered.
"Holdings" means Spheris Holding III, Inc., a Delaware corporation.
"Indebtedness" means with respect to any Person, without duplication: (i)
all Obligations of such Person for borrowed money; (ii) all Obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments; (iii)
all Capitalized Lease Obligations of such Person; (iv) all Obligations of such
Person issued or assumed as the deferred and unpaid purchase price of property,
all conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business); (v) all Obligations for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (including reimbursement obligations with respect
thereto except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of incurrence); (vi)
guarantees and other contingent obligations in respect of Indebtedness of other
Persons referred to in clauses (i) through (v) above and clause (viii) below;
(vii) all Obligations of any other Person of the type referred to in clauses (i)
through (vi) which are secured by any Lien on any property or asset of such
Person whether or not such Indebtedness is assumed by such Person, the amount of
such Obligation being deemed to be the lesser of the fair market value of such
property or asset at such date of determination and the amount of the Obligation
so secured; (viii) all Obligations under Currency Agreements and Interest Swap
Obligations of such Person (the amount of any such obligations to be equal at
any time to the termination value, as determined in good faith by
the Company's Board of Directors, which determination will be conclusive, of
such agreement or arrangement giving rise to such obligation that would be
payable by such Person at such time); and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price or,
with respect to any Subsidiary that is not a Guarantor, any Preferred Stock (but
excluding, in each case, accrued dividends, if any).
Notwithstanding the foregoing, in connection with the purchase by the
Company or any Restricted Subsidiary of any business, the term "Indebtedness"
will exclude post-closing payment adjustments to which the seller may become
entitled to the extent such payment is determined by a final closing balance
sheet or such payment depends on the performance of such business after the
closing; provided, however, that, at the time of closing, the amount of any such
payment is not determinable and, to the extent such payment thereafter becomes
fixed and determined, the amount is paid within 60 days thereafter. For
clarification purposes, the liability of the Company or any Restricted
Subsidiary to make periodic payments to licensors in consideration for the
license of patents and technical information under license agreements in
existence on the Issue Date and any amount payable in respect of a settlement of
disputes with respect to such payments thereunder shall not constitute
Indebtedness.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. For the purposes of calculating the amount of Indebtedness of a
Securitization Entity outstanding as of any date, the face or notional amount of
any interest in receivables or equipment that is outstanding as of such date
shall be deemed to be Indebtedness but any such interests held by Affiliates of
such Securitization Entity shall be excluded for purposes of such calculation.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Initial Notes" has the meaning set forth in the preamble hereto.
"Intellectual Property" means, collectively, the patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures).
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional
amount and shall include, without limitation, interest rate swaps, caps, floors,
collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan or other extension of credit (including, without limitation, a
guarantee or similar arrangement but excluding any debt or extension of credit
represented by a bank deposit other than a time deposit) or capital contribution
to (by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any Person.
"Investment" shall exclude extensions of trade credit by the Company and its
Restricted Subsidiaries in accordance with normal trade practices of the Company
or such Restricted Subsidiary, as the case may be. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Common
Stock of any direct or indirect Restricted Subsidiary of the Company such that,
after giving effect to any such sale or disposition, such Restricted Subsidiary
is no longer a Restricted Subsidiary of the Company (or, in the case of a
Restricted Subsidiary that is not a Wholly-Owned Restricted Subsidiary of the
Company, such Restricted Subsidiary has a minority interest that is held by an
Affiliate of the Company that is not a Restricted Subsidiary of the Company),
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary, not sold or disposed of. Except as otherwise provided
herein, the amount of an Investment shall be its fair market value at the time
the Investment is made and without giving effect to subsequent changes in its
fair market value. For purposes of Section 4.07 hereof:
(i) "Investment" will include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary at the time that such Restricted Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company
will be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary in an amount (if positive) equal to (a) the
Company's "Investment" in such Subsidiary at the time of such redesignation
less (b) the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets (as
conclusively determined by the Board of Directors of the Company in good
faith) of such Subsidiary at the time that such Subsidiary is so
re-designated a Restricted Subsidiary; and
(ii) any property transferred to or from an Unrestricted Subsidiary
will be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Board of Directors of the
Company.
"Issue Date" means December 22, 2004
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue on such payment for the intervening period.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Marketable Securities" means publicly traded debt or equity securities
that are listed for trading on a national securities exchange or NASDAQ and that
were issued by a corporation whose debt securities are rated in one of the three
highest rating categories by either S&P or Moody's.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents (other
than the portion of any such deferred payment constituting interest) received by
the Company or any of its Restricted Subsidiaries from such Asset Sale net of:
(i) reasonable out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions and title and recording tax expenses); (ii) all Federal,
state, provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Sale; (iii) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale; (iv) 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 (v) all payments made on any Indebtedness which is secured
by any assets subject to such Asset Sale, in accordance with the terms of any
Lien upon or other security agreement of any kind with respect to such assets,
or which must by its terms, or in order to obtain a necessary consent to such
Asset Sale, or by applicable law, be repaid out of the proceeds from such Asset
Sale.
"Notes" means, collectively, the Initial Notes and the Exchange Notes
treated as a single class of securities, as amended or supplemented from time to
time in accordance with the terms hereof, that are issued pursuant to this
Indenture.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person (other than the Trustee), the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Sections 13.04
and 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or any Subsidiary of the Company.
"Permitted Business" means any business (including stock or assets) that
derives a majority of its revenues from the business engaged in by the Company
and its Restricted Subsidiaries on the Issue Date and/or activities that are
reasonably similar, ancillary or related to, or a reasonable extension,
development or expansion of, the businesses in which the Company and its
Restricted Subsidiaries are engaged on the Issue Date.
"Permitted Group" means any group of investors party to the Stockholders'
Agreement, as the same may be amended, modified or supplemented from time to
time, provided that the Permitted Holders and their Related Parties continue to
be the "beneficial owners" (as such term is used in Section 13(d) of the
Exchange Act), directly or indirectly, of more than 50% of the voting power of
the issued and outstanding Capital Stock of the Company or Holdings (as
applicable) that is "beneficially owned" (as defined above) by such group of
Investors.
"Permitted Holders" means (i) Warburg Pincus Private Equity VIII, L.P. and
its Affiliates and any general or limited partners of Warburg Pincus Private
Equity VIII, L.P. or its Affiliates, (ii) ▇▇▇▇▇ Private Equity Investors LP and
its Affiliates and any general or limited partners of ▇▇▇▇▇ Private Equity
Investors LP and (iii) directors, executive officers and other management
employees of Holdings or any of its Subsidiaries on the Issue Date.
"Permitted Indebtedness" means, without duplication, each of the following:
(i) Indebtedness under the Notes (other than any Additional Notes) and the
incurrence by the Company of Indebtedness represented by the Exchange Notes
issued in exchange for the Notes (or in exchange for any Additional Notes issued
in accordance with the terms of the Indenture) and the Guarantees thereof;
(ii) Indebtedness of the Company or the Guarantors incurred pursuant to one
or more Credit Facilities in an aggregate principal amount at any time
outstanding not to exceed $100.0 million less: (A) the aggregate principal
amount of Indebtedness of Securitization Entities at the time outstanding, (B)
the amount of all mandatory principal payments actually made by the Company or
any such Restricted Subsidiary since the Issue Date with the Net Cash Proceeds
of an Asset Sale in respect of term loans under a Credit Facility (excluding any
such payments to the extent refinanced at the time of payment), and (C) any
repayments of revolving credit borrowings under a Credit Facility with the Net
Cash Proceeds of an Asset Sale that are accompanied by a corresponding
commitment reduction thereunder; provided that the amount of Indebtedness
permitted to be incurred pursuant to the Credit Facilities in accordance with
this clause (ii) shall be in addition to any Indebtedness permitted to be
incurred pursuant to the Credit Facilities in reliance on, and in accordance
with, clauses (vii), (xiii), (xiv) and (xv) below;
(iii) other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date (and in the case of any line of credit, the unused
capacity of such line of credit as of the Issue Date), reduced by the amount of
any scheduled amortization payments or mandatory prepayments when actually paid
or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company or any of its Restricted
Subsidiaries covering Indebtedness of the Company or any of its Restricted
Subsidiaries; provided, however, that any Indebtedness to which any such
Interest Swap Obligations correspond is otherwise permitted to be incurred under
this Indenture; and provided, further, that such Interest Swap Obligations are
entered into, in the judgment of the Company, to protect the Company or any of
its Restricted Subsidiaries from fluctuation in interest rates on its
outstanding Indebtedness;
(v) Indebtedness of the Company or any Restricted Subsidiary under Hedging
Agreements and Currency Agreements;
(vi) Intercompany Indebtedness between or among the Company and any such
Restricted Subsidiaries (other than a Securitization Entity); provided, however,
that: (a) if the Company is the obligor on such Indebtedness and the payee not a
Guarantor, such Indebtedness is expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the Notes; and (b)(1) any
subsequent issuance or transfer of Capital Stock or any other event which
results in any such Indebtedness being beneficially held by a Person other than
the Company or a Restricted Subsidiary (other than a Securitization Entity)
thereof; and (2) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary (other than a
Securitization Entity) thereof (other than by way of granting a Lien permitted
under this Indenture or in connection with the exercise of remedies by a secured
creditor) shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be,
that was not permitted by this clause (vi);
(vii) Indebtedness (including Capitalized Lease Obligations) incurred by
the Company or any of its Guarantors to finance the purchase, lease or
improvement of property (real or personal) or equipment (whether through the
direct purchase of assets or the Capital Stock of any person owning such assets)
in an aggregate principal amount outstanding not to exceed the greater of (a)
$7.5 million and (b) 2.5% of Total Assets;
(viii) Refinancing Indebtedness (other than Refinancing Indebtedness with
respect to Indebtedness incurred pursuant to clause (ii) of this definition);
(ix) guarantees by the Company and its Restricted Subsidiaries of each
other's Indebtedness; provided, however, that such Indebtedness is permitted to
be incurred under this Indenture; provided, further, that in the event such
Indebtedness (other than Acquired Indebtedness) is incurred pursuant to the
Consolidated Fixed Charge Coverage Ratio, such guarantees are by the Company or
a Guarantor only;
(x) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary of the Company providing for indemnification, adjustment of purchase
price, earn-out or other similar obligations, in each case, incurred or assumed
in connection with the disposition of any
business, assets or Capital Stock of a Restricted Subsidiary of the Company,
other than guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition; provided, however, that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Restricted Subsidiaries in
connection with such disposition;
(xi) obligations in respect of performance and surety bonds and completion
guarantees provided by the Company or any Restricted Subsidiary of the Company
in the ordinary course of business;
(xii) Indebtedness of a Securitization Entity incurred in a Qualified
Securitization Transaction that is non-recourse to the Company or any Subsidiary
of the Company (except for Standard Securitization Undertakings);
(xiii) Indebtedness incurred by the Company or any of the Guarantors in
connection with the acquisition of a Permitted Business; provided that on the
date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof and the use of proceeds therefrom, the Consolidated Fixed
Charge Coverage Ratio of the Company is greater than the Consolidated Fixed
Charge Coverage Ratio of the Company immediately prior to the incurrence of such
Indebtedness;
(xiv) additional Indebtedness of the Company and the Guarantors in an
aggregate principal amount which does not exceed $15.0 million at any one time
outstanding which amount may, but need not, be incurred in whole or in part
under a Credit Facility (it being understood that any Indebtedness or Preferred
Stock incurred pursuant to this clause (xiv) shall cease to be deemed incurred
or outstanding for purposes of this clause (xiv) but shall be deemed incurred
under Section 4.09 hereof from and after the first date on which the Company or
such Restricted Subsidiary could have incurred such Indebtedness or Preferred
Stock thereunder without reliance on this clause (xiv));
(xv) additional Indebtedness of the Foreign Subsidiaries in an aggregate
principal amount which does not exceed the greater of (a) $10.0 million and (b)
5.0% of Total Assets of the Foreign Subsidiaries at any one time outstanding
(which amount may, but need not, be incurred in whole or in part under a credit
facility);
(xvi) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five business days of incurrence;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, issued in the ordinary course of
business of the Company or such Restricted Subsidiary, including, without
limitation, in order to provide security for workers' compensation claims or
payment obligations in connection with self-insurance or similar requirements in
the ordinary course of business and other Indebtedness with respect to workers'
compensation claims, self-
insurance obligations, performance, surety and similar bonds and completion
guarantees provided by the Company or any Restricted Subsidiary of the Company
in the ordinary course of business; and
(xviii) Indebtedness consisting of promissory notes issued by the Company
or any Guarantor to current or former officers, directors and employees, their
respective estates, spouses or former spouses to finance the purchase or
redemption of Equity Interests of Holdings permitted by Section 4.07 hereof.
No Foreign Subsidiary may Incur any Indebtedness (other than pursuant to
clause (vi) of the definition of Permitted Indebtedness) if the proceeds are
used to refinance Indebtedness of the Company; provided, however, that proceeds
of Indebtedness incurred pursuant to clause (xv) of the definition of Permitted
Indebtedness may be used to permanently repay Senior Debt or the Notes of the
Company.
For purposes of determining compliance with Section 4.09 hereof, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xviii)
above or is entitled to be incurred pursuant to the Consolidated Fixed Charge
Coverage Ratio provisions of Section 4.09 hereof, the Company shall, in its sole
discretion, divide and classify (or later redivide and reclassify) such item of
Indebtedness in any manner that complies with Section 4.09 hereof. Accrual of
interest, accretion or amortization of original issue discount, the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Capital Stock in the
form of additional shares of the same class of Disqualified Capital Stock will
not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified
Capital Stock for purposes of Section 4.09 hereof.
"Permitted Investments" means: (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company
(other than a Securitization Entity or Restricted Subsidiary of the Company in
which an Affiliate of the Company that is not a Restricted Subsidiary of the
Company holds a minority interest) (whether existing on the Issue Date or
created thereafter) or any other Person (including by means of any transfer of
cash or other property) if as a result of such Investment such other Person
shall become a Restricted Subsidiary of the Company (other than a Securitization
Entity or Restricted Subsidiary of the Company in which an Affiliate of the
Company that is not a Restricted Subsidiary of the Company holds a minority
interest) or that will merge with or consolidate into the Company or a
Restricted Subsidiary of the Company and Investments in the Company by the
Company or any Restricted Subsidiary of the Company; (ii) investments in cash
and Cash Equivalents; (iii) loans and advances in the ordinary course of
business to the employees of the Company and its Restricted Subsidiaries so long
as the aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $1.0 million in the case of cash loans and advances and $2.0
million in the case of non-cash loans and advances at any time and advances in
the ordinary course of business of payroll payments to employees; (iv) Currency
Agreements, Hedging Agreements and Interest Swap Obligations entered into in the
ordinary course of business and otherwise in compliance with this Indenture; (v)
Investments in securities of trade creditors or customers received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such trade creditors or customers or in good faith settlement of
delinquent obligations of such trade creditors or customers; (vi) Investments
made by the Company or its Restricted Subsidiaries as a result of consideration
received in connection with an Asset Sale made in compliance with Section 4.10
hereof; (vii) Investments existing on the Issue Date; (viii) accounts receivable
created or acquired in the ordinary course of business; (ix) guarantees by the
Company or a Restricted Subsidiary of the Company permitted to be incurred under
this Indenture; (x) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(x) that are at that time outstanding, not to exceed the greater of (A) $15.0
million and (B) 3.5% of the Company's Total Assets; (xi) any Investment by the
Company or a Restricted Subsidiary of the Company in a Securitization Entity or
any Investment by a Securitization Entity in any other Person in connection with
a Qualified Securitization Transaction; provided that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest or interests in receivables and related assets generated by the Company
or a Restricted Subsidiary and transferred to any Person in connection with a
Qualified Securitization Transaction or any such Person owning such receivables;
(xii) Investments the payment for which consists exclusively of Qualified
Capital Stock of the Company; (xiii) any Investment in any Person to the extent
it consists of prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar deposits
made in the ordinary course of business; and (xiv) Investments in Unrestricted
Subsidiaries not to exceed $2.5 million at any one time outstanding.
"Permitted Junior Securities" means unsecured 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 then outstanding Senior Debt of the Company, at least to the same
extent that the Notes are subordinated to the payment of all Senior Debt of the
Company, on the Issue Date, so long as to the extent that any Senior Debt of the
Company outstanding on the date of consummation of any such plan of
reorganization or readjustment is not paid in full in cash on such date, the
holders of any such Senior Debt not so paid in full in cash have consented to
the terms of such plan of reorganization or readjustment.
"Permitted Subsidiary Preferred Stock" means any series of Preferred Stock
of a Foreign Restricted Subsidiary that constitutes Qualified Capital Stock, the
liquidation value of all series of which, when combined with the aggregate
amount of outstanding Indebtedness of the Foreign Restricted Subsidiaries
incurred pursuant to clause (xv) of the definition of Permitted Indebtedness,
does not exceed $2.5 million.
"Person" means an individual, partnership, corporation, limited liability
company, unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"Productive Assets" means assets (including Capital Stock) that are used or
usable by the Company and its Restricted Subsidiaries in Permitted Businesses.
"Purchase Money Note" means a promissory note of a Securitization Entity
evidencing the deferred purchase price of receivables (and related assets)
and/or a line of credit, which may be irrevocable, from the Company or any
Restricted Subsidiary of the Company in connection with a Qualified
Securitization Transaction to a Securitization Entity, which note shall be
repaid from cash available to the Securitization Entity other than amounts
required to be established as reserves pursuant to agreements, amounts paid to
investors in respect of interest and principal and amounts paid in connection
with the purchase of newly generated receivables or newly acquired equipment.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Securitization Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell,
convey or otherwise transfer to: (i) a Securitization Entity (in the case of a
transfer by the Company or any of its Restricted Subsidiaries); and (ii) any
other Person (in the case of a transfer by a Securitization Entity), or may
grant a security interest in any accounts receivable or equipment (whether now
existing or arising or acquired in the future) of the Company or any of its
Restricted Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable and equipment, all
contracts and contract rights and all guarantees or other obligations in respect
of such accounts receivable and equipment, proceeds of such accounts receivable
and equipment and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted in
connection with assets securitization transactions involving accounts receivable
and equipment.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing, modification,
replacement, restatement, refunding, deferral, extension, substitution,
supplement, reissuance or resale of existing or future Indebtedness (other than
intercompany Indebtedness), including any additional Indebtedness incurred to
pay interest or premiums required by the instruments governing such existing or
future Indebtedness as in effect at the time of issuance thereof ("Required
Premiums") and fees in connection therewith; provided that any such event shall
not: (i) directly or indirectly result in an increase in the aggregate principal
amount of Permitted Indebtedness, except to the extent such increase is a result
of a simultaneous incurrence of additional Indebtedness: (A) to pay Required
Premiums and related fees; or (B) otherwise permitted to be incurred under this
Indenture; and (ii) create Indebtedness with a Weighted Average Life to Maturity
at the time such Indebtedness is incurred that is less than the Weighted Average
Life to Maturity at such time of the Indebtedness being refinanced, modified,
replaced, renewed, restated, refunded, deferred, extended, substituted,
supplemented, reissued or resold; and (iii) if the Indebtedness being refinanced
is subordinated in right of payment to the Notes or the Guarantee, such
Refinancing Indebtedness is subordinated in right of payment to the Notes or the
Guarantee on terms at least as favorable to the holders as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, among the Company, the Guarantors and the initial
purchasers set forth therein.
"Related Party" with respect to any Permitted Holder means: (i)(A) any
controlling stockholder or a majority owned Subsidiary of such Permitted Holder
or, in the case of an individual, any spouse, sibling, parent or child of such
Permitted Holder; or (B) the estate of any Permitted Holder during any period in
which such estate holds Capital Stock of the Company for the benefit of any
Person referred to in clause (i)(A); or (ii) any trust, corporation,
partnership, limited liability company or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially owning an interest of
more than 50% of which consist of, or the sole managing partner or managing
member of which is, one or more Permitted Holders and/or such other Persons
referred to in the immediately preceding clause (i).
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that when used
in connection with the Credit Facility, the term "Representative" shall refer to
the administrative agent under the Credit Facility; provided further, that if,
and for so long as, any Designated Senior Debt lacks such a 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 in respect of any Designated Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Division - Corporate Finance Unit of the
Trustee (or any successor unit of the Trustee) located at the Corporate Trust
Office of the Trustee who has direct responsibility for the administration of
this Indenture and for the purposes of Sections 7.01(c)(ii) and 7.05(b) also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Subsidiary" of any Person means any Subsidiary of such Person
which at the time of determination is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group or any successor thereto.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party providing for the leasing
to the Company or a Restricted Subsidiary of any property, whether owned by the
Company or any Restricted Subsidiary at the Issue Date or later acquired, which
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such Person on the security of such property.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Debt" means any Indebtedness secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Entity" means a Wholly-Owned Subsidiary of the Company (or
another Person in which the Company or any Restricted Subsidiary of the Company
makes an
Investment and to which the Company or any Restricted Subsidiary of the Company
transfers accounts receivable or equipment and related assets) which engages in
no activities other than in connection with the financing of accounts receivable
or equipment and which is designated by the Board of Directors of the Company
(as provided below) as a Securitization Entity: (i) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which: (A) is
guaranteed by the Company or any Restricted Subsidiary of the Company (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness) pursuant to Standard Securitization Undertakings); (B) is recourse
to or obligates the Company or any Restricted Subsidiary of the Company in any
way other than pursuant to Standard Securitization Undertakings; or (C) subjects
any property or asset of the Company or any Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings; (ii) with
which neither the Company nor any Restricted Subsidiary of the Company has any
material contract, agreement, arrangement or understanding (except in connection
with a Purchase Money Note or Qualified Securitization Transaction) other than
on terms no less favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons that are not Affiliates of
the Company, other than fees payable in the ordinary course of business in
connection with servicing receivables of such entity; and (iii) to which neither
the Company nor any Restricted Subsidiary of the Company has any obligations to
maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company or any Guarantor, whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall be subordinate or pari passu in right of payment to the Notes
or the Guarantees, as the case may be. Without limiting the generality of the
foregoing, "Senior Debt" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing in respect of: (x) all monetary obligations of
every nature of the Company or any Guarantor under the Credit Facility,
including, without limitation, obligations (including guarantees thereof) to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities; (y) all Interest Swap Obligations (and guarantees
thereof); and (z) all obligations (and guarantees thereof) under Currency
Agreements and Hedging Agreements, in each case whether outstanding on the Issue
Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include (i) any
Indebtedness of the Company or a Guarantor to the Company or to a Subsidiary of
the Company; (ii) any
Indebtedness of the Company or any Guarantor to, or guaranteed by the Company or
any Guarantor on behalf of, any shareholder, director, officer or employee of
the Company or any Subsidiary of the Company (including, without limitation,
amounts owed for compensation) other than a shareholder who is also a lender (or
an Affiliate of a lender) under the Credit Facilities (including the Credit
Facility); (iii) any amounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities but excluding secured purchase money
obligations and capitalized lease obligations); (iv) Indebtedness represented by
Disqualified Capital Stock; (v) any liability for Federal, state, local or other
taxes owed or owing by the Company or any of the Guarantors; (vi) that portion
of any Indebtedness incurred in violation of Section 4.09 hereof (but, as to any
such obligation, no such violation shall be deemed to exist for purposes of this
clause (vi) if the holder(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of the Company to the
effect that the incurrence of such Indebtedness does not (or in the case of
revolving credit indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture); (vii) Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of ▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is without recourse to the Company or any of the
Guarantors, as applicable; and (viii) any Indebtedness which is, by its express
terms, subordinated or junior in right of payment to any other Indebtedness,
guarantee or obligation of the Company or any of the Guarantors, including
without limitation any Senior Subordinated Debt.
"Senior Subordinated Debt" means with respect to a Person, the Notes (in
the case of the Company), a Guarantee (in the case of a Guarantor) and any other
Indebtedness of such Person that specifically provides that such Indebtedness is
to rank pari passu with the Notes or such Guarantee, as the case may be, in
right of payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of such Person which is not Senior Debt of such
Person.
"Significant Subsidiary," with respect to any Person, means any Restricted
Subsidiary of such Person that satisfies the criteria for a "significant
subsidiary" set forth in Rule 1-02(w) of Regulation S-X under the Securities
Act.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Company or any Restricted
Subsidiary of the Company which are reasonably customary, as determined in good
faith by the Board of Directors of the Company, in an accounts receivable or
equipment transaction.
"Stockholders' Agreement" means the Stockholders' Agreement, dated as of
November 5, 2004, by and among Holdings, Warburg Pincus Private Equity VIII,
L.P., Warburg Pincus Netherlands Private Equity VIII C.V. I, Warburg Pincus
Netherlands Private Equity VIII C.V. II, Warburg Pincus Germany Private Equity
VIII KG, ▇▇▇▇▇ Private Equity Investors LP and Spheris Investment LLC, as in
effect on the Issue Date and as further amended and modified from time to time,
entered into in connection with the Transactions.
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement or
pursuant to the terms thereof.
"Subsidiary" with respect to any Person, means: (i) any corporation,
association or other business entity (other than a partnership, joint venture,
limited liability company or similar entity) of which the outstanding Capital
Stock having at least a majority of the votes entitled to be cast in the
election of directors, managers or trustee thereof (or persons performing
similar functions) under ordinary circumstances shall at the time be owned,
directly or indirectly, by (1) such Person, (2) such Person and one or more
Subsidiary of such Person or (3) one or more Subsidiaries of such Person; or
(ii) any partnership, joint venture, limited liability company or similar entity
of which at least a majority of the capital accounts, distribution rights, total
equity and voting interest or general or limited partnership interests, as
applicable, under ordinary circumstances is at the time, directly or indirectly,
owned by (1) such Person, (2) such Person and one or more Subsidiary of such
Person or (3) one or more Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Total Assets" means, as of any date, the total consolidated assets of the
Company and its Restricted Subsidiaries, as set forth on the Company's most
recently available internal consolidated balance sheet as of such date.
"Transaction Date" has the meaning set forth in the definition of
Consolidated Fixed Charge Coverage Ratio.
"Transactions" means the completion of the HealthScribe Acquisition and the
transactions related thereto occurring on the Issue Date, and the offering of
the Notes being offered hereby.
"Treasury Rate" means, as of the applicable redemption date, the yield to
maturity as of such redemption date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to such redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such redemption date to December 15, 2008;
provided, however, that if the period from such redemption date to December 15,
2008 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year will be
used.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"U.S. Government Obligations" means securities that are:
(i) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged, or
(ii) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America,
which, in each case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any such U.S. Government Obligations or a specific payment of principal of or
interest on any such U.S. Government Obligations held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligations or the specific
payment of principal of or interest on the U.S. Government Obligations evidenced
by such depository receipt.
"Unrestricted Subsidiary" of any Person means: (i) any Subsidiary of such
Person that at the time of determination shall be or continue to be designated
an Unrestricted Subsidiary by the Board of Directors of such Person in the
manner provided below; and (ii) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary or a Person becoming a
Subsidiary through merger or consolidation or Investment therein) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of or
Indebtedness of or has any Investment in, or owns or holds any Lien on any
property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated or another Unrestricted
Subsidiary; provided that: (i) the Company certifies to the Trustee that such
designation complies with Section 4.07 hereof; and (ii) each Subsidiary to be so
designated and each of its Subsidiaries: (A) has not at the time of designation,
any Indebtedness pursuant to which the lender has recourse to any of the assets
of the Company or any of its Restricted Subsidiaries, unless such recourse is
Indebtedness or a Lien that is permitted under this Indenture after giving
effect to such designation; and (B) either alone or in the aggregate with all
other Unrestricted Subsidiaries does not operate, directly or indirectly, all or
substantially all of the business of the Company and its Subsidiaries.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary only if (x) immediately after giving
effect to such designation, the Company is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.09 hereof and (y) immediately before and immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof. Any such designation
by the Board of Directors of the Company shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions. If, at any time, any Unrestricted
Subsidiary 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 Indebtedness of such Subsidiary shall be
deemed to be incurred as of such date.
Actions taken by an Unrestricted Subsidiary shall not be deemed to have
been taken, directly or indirectly, by the Company or any Restricted Subsidiary.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (i) the then outstanding
aggregate principal amount of such Indebtedness into (ii) the sum of the total
of the products obtained by multiplying: (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof; by (B) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly-Owned Restricted Subsidiary" of any Person means any Wholly-Owned
Subsidiary of such Person which at the time of determination is a Restricted
Subsidiary.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such Person
of which all the outstanding voting securities (other than in the case of a
Restricted Subsidiary that is incorporated in a jurisdiction other than a State
in the United States of America or the District of Columbia, directors'
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned by such Person or any
Wholly-Owned Subsidiary of such Person.
Section 1.02 Other Definitions.
DEFINED IN
TERM SECTION
---- ------------
"Acceleration Notice"............................................ 6.02
"Affiliate Transaction".......................................... 4.11
"Appendix"....................................................... 2.01
"Authentication Order"........................................... 2.02
"Base Currency".................................................. 13.13
"Blockage Notice"................................................ 10.03, 12.03
"Change of Control Offer"........................................ 4.15
"Change of Control Payment Date"................................. 4.15
"Covenant Defeasance"............................................ 8.03
"Event of Default"............................................... 6.01
"Guaranteed Obligations"......................................... 11.01
"Guarantor Obligations".......................................... 12.01
"incur".......................................................... 4.09
"Initial Lien"................................................... 4.12
"Judgment Currency".............................................. 13.13
"Legal Defeasance"............................................... 8.02
"Net Proceeds Offer"............................................. 4.10
"Net Proceeds Offer Amount"...................................... 4.10
"Net Proceeds Offer Payment Date"................................ 4.10
"Net Proceeds Offer Trigger Date"................................ 4.10
"Offer Period"................................................... 3.09
"pay the Notes".................................................. 10.03
"pay its Guarantee".............................................. 12.03
"Paying Agent"................................................... 2.03
"Payment Blockage Period"........................................ 10.03, 12.03
"Payment Default"................................................ 10.03, 12.03
"protected purchaser"............................................ 2.07
"Purchase Date".................................................. 3.09
"rate(s) of exchange"............................................ 13.13
"Reference Date"................................................. 4.07
"Registrar"...................................................... 2.03
"Restricted Payment"............................................. 4.07
"Surviving Entity"............................................... 5.01
Section 1.03 Trust Indenture Act Definitions.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Guarantees means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the
Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular;
(5) provisions apply to successive events and transactions;
(6) "$" and "U.S. Dollars" each refer to United States dollars, or such
other money of the United States of America that at the time of payment is legal
tender for payment of public and private debts;
(7) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time; and
(8) references in this Indenture, in any context, to any interest or other
amount payable on or with respect to the Notes shall be deemed to include any
Additional Interest that is payable pursuant to the Registration Rights
Agreement.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
Provisions relating to the Initial Notes and the Exchange Notes are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix")
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Notes and the Trustee's certificate of authentication with respect
thereto shall be substantially in the form of Exhibit A to the Appendix, which
is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Notes and the Trustee's certificate of authentication with respect
thereto shall be substantially in the form of Exhibit B to the Appendix, which
is hereby incorporated in and expressly made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the
Company). Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in the Appendix and Exhibits A and B to the Appendix are
part of the terms of this Indenture.
Section 2.02 Execution and Authentication
On the Issue Date, the Trustee shall authenticate and deliver $125.0
million of 11% Senior Subordinated Notes Due 2012 and, at any time and from time
to time thereafter, the Trustee shall authenticate and deliver Notes for
original issue in an aggregate principal amount specified in such order, in each
case upon a written order of the Company signed by two Officers or by an Officer
and an Assistant Secretary of the Company (each an "Authentication Order"). Such
order shall specify the amount of the Notes to be authenticated and the date on
which the original issue of Notes is to be authenticated, whether the Notes are
to be Initial Notes, Additional Notes or Exchange Notes, or such other
information as the Trustee shall reasonably request and, in the case of an
issuance of Additional Notes pursuant to Section 2.14 after the Issue Date,
shall certify that such issuance is in compliance with Section 4.09.
The Notes shall be issued only in registered form, without coupons and only
in denominations of $1,000 and any integral multiple thereof.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee may appoint one or more authenticating agents reasonably
acceptable to the Company to authenticate the Notes. Unless limited by the terms
of such appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Registrar, or any Paying Agent or agent for service of
notices and demands.
The Trustee is hereby authorized to enter into a letter of representations
with the Depository or the Common Depository (as defined in the Appendix), as
the case may be, in the form provided by the Company and to act in accordance
with such letter.
Section 2.03 Registrar and Paying Agent
(a) The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (the "Registrar") and
(ii) an office or agency in the Borough of Manhattan, The City of New York, the
State of New York where Notes may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Notes and of their registration of
transfer and exchange. The Company may have one or more co-registrars and one or
more additional paying agents. The term "Registrar" includes any co-registrars.
The Company initially appoints the Trustee as (i) Registrar and Paying Agent in
connection with the Notes and (ii) the Notes Custodian with respect to the
Global Notes.
(b) The Company shall enter into an appropriate agency agreement with the
Registrar or any Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agency agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee in writing of the name and address of any such agent. If the Company
fails to appoint or maintain a Registrar or Paying Agent, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.07. The Company or any Wholly-Owned Subsidiary incorporated or
organized within the United States of America may act as Paying Agent, Registrar
or transfer agent.
The Registrar and Paying Agent shall be entitled to the rights and
immunities of the Trustee hereunder.
Section 2.04 Paying Agent to Hold Money in Trust.
Prior to each due date of the principal, premium, if any, and interest on
any Note, the Company shall deposit with each Paying Agent (or if the Company or
a Wholly-Owned Subsidiary is acting as Paying Agent, segregate and hold in trust
for the benefit of the Persons entitled thereto) a sum sufficient to pay such
principal, premium and interest when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal of, premium, if any, or
interest on the Notes and shall notify the Trustee in writing of any default by
the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent (if other than the Company or a
Subsidiary of the Company) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05 Holder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company shall furnish, or cause the Registrar to furnish,
to the Trustee, at least five Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Holders and the Company shall otherwise comply with TIA
Section 312(a).
Section 2.06 Transfer and Exchange
(a) The Notes shall be issued in registered form and shall be transferable
only upon the surrender of a Note being transferred for registration of transfer
and in compliance with the Appendix. When a Note is presented to the Registrar
with a request to register a transfer, such Registrar shall register the
transfer as requested if the requirements of this Indenture and Section 8-401(a)
of the Uniform Commercial Code are met. When Notes are presented to the
Registrar with a request to exchange them for an equal principal amount of Notes
of other denominations, the Registrar shall make the exchange as requested if
the same requirements are met.
No service charge shall be made for any registration of transfer or
exchange or redemption of the Notes, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 or 9.05 hereof).
(b) The Registrar shall not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(c) All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(d) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of the mailing of notice of redemption under
Section 3.03 hereof and ending at the close of business on such day, (B) to
register the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part or (c) to register the transfer of or to exchange a Note between a record
date and the next succeeding Interest Payment Date.
(e) Any holder of a beneficial interest in a Global Note shall, by
acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Note may be effected only through a book-entry system
maintained by (a) the holder of such Global Note (or its agent or the person on
whose behalf the Global Note is held) or (b) any Holder of a beneficial interest
in such Global Note, and that ownership of beneficial interest in such Global
Note shall be required to be reflected in a book entry.
(f) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Paying Agent, the Registrar and the Company may deem and
treat the Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of, premium, if any,
and interest on such Notes and for all other purposes, and none of the Trustee,
any Paying Agent, the Registrar or the Company shall be affected by notice to
the contrary.
(g) None of the Company, the Trustee, any agent of the Company or the
Trustee (including any Paying Agent or Registrar) will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
(h) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among depositary participants or
beneficial owners of interest in any global security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Section 2.07 Replacement Notes.
If a mutilated Note is surrendered to the Registrar or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
requirements of Section 8-405 of the Uniform Commercial Code are met, such that
the Holder (a) satisfies the Company or the Trustee within a reasonable time
after such Holder has notice of such loss, destruction or wrongful taking and
the Registrar does not register a transfer prior to receiving such notification,
(b) makes such request to the Company or the Trustee prior to the Note being
acquired by a protected purchaser as defined in Section 8-303 of the Uniform
Commercial Code (a "protected purchaser") and (c) satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity or a security bond sufficient in the judgment
of the Trustee to protect the Company, the Trustee, the Paying Agent and the
Registrar from any loss which any of them may suffer if a Note is replaced. The
Company and the Trustee may charge the Holder for their expenses in replacing a
Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionally
with all other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, lost, destroyed or wrongfully taken Notes.
Section 2.08 Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the Trustee
except for those canceled by it, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions of this
Indenture, those delivered to it for cancellation and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee and the Company receive proof satisfactory to them that the replaced
Note is held by a protected purchaser. A mutilated Note ceases to be outstanding
upon surrender of such Note and replacement thereof pursuant to Section 2.07.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal, premium, if any, and interest payable on that date with respect to
the Notes (or portions thereof) to be redeemed or maturing, as the case may be,
and no Paying Agent is prohibited from paying such money to the Holders on that
date pursuant to the
terms of this Indenture, then on and after that date such Notes (or portions
thereof) shall cease to be outstanding and interest on them shall cease to
accrue.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10 Temporary Notes.
In the event that Definitive Notes are to be issued under the terms of this
Indenture, until such Definitive Notes are ready for delivery, the Company may
prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Notes and deliver them in exchange for temporary
Notes upon surrender of such temporary Notes at the office or agency of the
Company, without charge to the Holder. Until such exchange, temporary Notes
shall be entitled to the same rights, benefits and privileges as Definitive
Notes and to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel (subject to the record retention
requirements of the Exchange Act) all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation in accordance with its
customary procedures and, if requested in writing, deliver a certificate of such
destruction to the Company unless the Company directs the Trustee in writing to
deliver canceled Notes to the Company. The Company may not issue new Notes to
replace Notes that it has redeemed, paid or that have been delivered to the
Trustee for cancellation. The Trustee shall not authenticate Notes in place of
canceled Notes other than pursuant to the terms of this Indenture.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, the Company
shall pay defaulted interest then borne by the Notes, as the case may be (plus
interest on such defaulted interest at the applicable interest rate on the Notes
to the extent lawful), in any lawful manner. The Company may pay 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 affected Holder a notice that states the special record date, the
related payment date and the amount of defaulted interest to be paid.
Section 2.13 CUSIP or ISIN Numbers.
The Company in issuing the Notes may use "CUSIP", "ISIN" or other similar
identification numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP", "ISIN" or such other similar identification numbers in notices of
redemption or repurchase as a convenience to Holders; provided, however, that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or the omission of such numbers. The Company shall promptly notify
the Trustee of any change in the "CUSIP", "ISIN" or such other similar
identification numbers.
Section 2.14 Issuance of Additional Notes.
The Company shall be entitled, subject to its compliance with Section 4.09,
to issue Additional Notes under this Indenture which shall have identical terms
as the Initial Notes issued on the Issue Date, other than with respect to the
date of issuance and issue price. The Initial Notes issued on the Issue Date,
any Additional Notes and all Exchange Notes issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture.
With respect to any Additional Notes, the Company shall set forth in a
Board Resolution and an Officers' Certificate of the Company, a copy of each
which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date and the "CUSIP", "ISIN" or other
similar identification numbers of such Additional Notes; provided, however, that
no Additional Notes may be issued at a price that would cause such Additional
Notes to have "original issue discount" within the meaning of Section 1273 of
the Code; and
(3) whether such Additional Notes shall be Transfer Restricted Notes and
issued in the form of Initial Notes as set forth in Exhibit A to this Indenture
or shall be issued in the form of Exchange Notes as set forth in Exhibit B to
this Indenture.
Section 2.15 Calculation of Amounts. (i) The maximum amount of
Indebtedness, Investments and other threshold amounts that the Company and its
Restricted Subsidiaries may incur shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness, Investments and other threshold amounts
solely as a result of fluctuations in the exchange rate of currencies. When
calculating capacity for the incurrence of additional Indebtedness, Investments
and other threshold amounts by the Company and its Restricted Subsidiaries, the
exchange rate of currencies shall be measured as of the date of such
calculation.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem the Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall notify the Trustee in
writing of (i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed, (iv) the redemption price and (v) the "CUSIP", "ISIN" or other similar
identification numbers of the Notes to be redeemed. The Company shall give
notice to the Trustee provided for in this paragraph at least 40 days but not
more than 60 days before a redemption date if the redemption is pursuant to
Section 3.07 hereof, unless a shorter period is acceptable to the Trustee. Such
notice shall be accompanied by an Officers' Certificate and Opinion of Counsel
from the Company to the effect that such redemption will comply with the
conditions herein. If fewer than all the Notes are to be redeemed, the record
date relating to such redemption shall be selected by the Company and given to
the Trustee, which record date shall be not fewer than 15 days after the date of
notice to the Trustee. Any such notice may be canceled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
Section 3.02 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount to be redeemed. Notes and portions of Notes
selected shall be in amounts of $1,000 or whole multiples of $1,000. The
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed, including "CUSIP",
"ISIN" or other similar identification numbers, if any, and shall state:
(a) the redemption date;
(b) the redemption price and the amount of accrued interest to the
redemption date;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price, plus accrued interest;
(f) that, unless the Company defaults in making such redemption payment or
any Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on Notes (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
"CUSIP", "ISIN" or other similar identification number, if any, listed in such
notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price stated in the notice. A notice of redemption may
not be conditional. Upon surrender to any Paying Agent, such Notes shall be paid
at the redemption price stated in the notice, plus accrued interest, to the
redemption date; provided, however, that if the redemption date is after a
regular record date and on or prior to the interest payment date, the accrued
interest shall be payable to the Holder of the redeemed Notes registered on the
relevant record date. Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
Section 3.05 Deposit of Redemption Price.
With respect to any Notes, 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 Subsidiary is a Paying Agent, shall segregate and hold
in trust) money sufficient to pay the redemption price of and accrued interest,
on all Notes or portions thereof to be redeemed on that date other than Notes or
portions of Notes called for redemption that have been delivered by the Company
to the Trustee for cancellation. On and after the redemption date, interest
shall cease to accrue on Notes or portions thereof called for redemption so long
as the Company has deposited with the Paying Agent funds sufficient to pay the
principal of, plus accrued and unpaid interest on, the Notes to be redeemed,
unless a Paying Agent is prohibited from making such payment pursuant to the
terms of this Indenture.
Section 3.06 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption; Special Redemption.
(a) Optional Redemption. Except as provided in Section 3.07(b) and (c)
hereof, the Notes shall not be redeemable at the Company's option prior to
December 15, 2008. Thereafter, the Notes shall 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 principal amount thereof) set forth below plus accrued and unpaid
interest to the applicable redemption date, if redeemed during the twelve month
period commencing on December 15 of the year set forth below:
NOTES
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
2008.................. 105.500%
2009.................. 102.750%
2010 and thereafter... 100.000%
(b) In addition, prior to December 15, 2008, the Company may redeem the
Notes at its option, in whole at any time or in part from time to time, upon not
less than 30 nor more than 60 days' prior notice mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
principal amount of the Notes redeemed plus the
Applicable Premium as of, and accrued and unpaid interest to, the applicable
redemption date (subject to the right of the Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
(c) Notwithstanding the foregoing, prior to December 15, 2007, the Company
may at its option on one or more occasions redeem the Notes (which includes
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of the Notes (which includes Additional Notes, if
any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 111%, plus accrued and unpaid interest, if any, to the
redemption date, with the net cash proceeds from one or more Equity Offerings;
provided, however, that (1) at least 65% of such aggregate principal amount of
Notes (which includes Additional Notes, if any), remains outstanding immediately
after the occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption
occurs within 60 days after the date of the related Equity Offering.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption; Open Market Purchases.
The Company shall not be required to make any mandatory redemption or
sinking fund payments with respect to the Notes. However, under certain
circumstances, the Company may be required to offer to purchase Notes as
described under the caption "Change of Control" and "Limitation on Asset Sales"
covenant. The Company may at any time and from time to time purchase Notes in
the open market or otherwise.
Section 3.09 Offer to Purchase by Application of Net Proceeds Offer
Amount.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence a Net Proceeds Offer (as defined in Section 4.10 hereof),
it shall follow the procedures specified below.
The Net Proceeds Offer shall remain open for a period of 20 Business Days
following its commencement or such longer period as may be required by
applicable law (the "Offer Period"). No later than five Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company shall
purchase the Net Proceeds Offer Amount or, if less than the Net Proceeds Offer
Amount has been tendered, all Notes tendered in response to the Net Proceeds
Offer. Payment for any Notes so purchased shall be made in the same manner as
interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Net Proceeds Offer.
Upon the commencement of a Net Proceeds Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall
contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Net Proceeds Offer. The Net Proceeds Offer shall be
made to all Holders. The notice, which shall govern the terms of the Net
Proceeds Offer, shall state:
(a) that the Net Proceeds Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Net Proceeds Offer shall
remain open and, if the Net Proceeds Offer is also made to holders of other
Senior Subordinated Debt of the Company or a Restricted Subsidiary of the
Company pursuant to Section 4.10 hereof, the notice shall identify such Senior
Subordinated Debt and state that the Net Proceeds Offer is also made to holders
of such Senior Subordinated Debt;
(b) the Net Proceeds Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a portion of a Note purchased pursuant to
a Net Proceeds Offer may only elect to have such Note purchased in integral
multiples of $1,000;
(f) that Holders electing to have a Note purchased pursuant to any Net
Proceeds Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before 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 Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders
and other Senior Subordinated Debt surrendered by the holders thereof exceeds
the Offer Amount, the Company shall select the Notes and other Senior
Subordinated Debt of the Company or a Restricted Subsidiary of the Company to be
purchased on a pro rata basis (based on the amounts of Notes and such other
Senior Subordinated Debt tendered and with such adjustments as may be deemed
appropriate by the Company so that only Notes or other Senior Subordinated Debt
in denominations of $1,000 or integral multiples thereof, shall be purchased);
and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Net
Proceeds Offer Amount of Notes and other Senior Subordinated Debt of the Company
or a Restricted Subsidiary of the Company or portions thereof tendered pursuant
to the Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has
been tendered, all Notes and other Senior Subordinated Debt of the Company or a
Restricted Subsidiary of the Company or portions thereof tendered, and shall
deliver to the Trustee an Officers' Certificate stating that such Notes or such
other Senior Subordinated Debt or portions thereof were accepted for payment by
the Company in accordance with the terms of this Section 3.09. The Company, the
Depository, the Common Depository 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 purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, and the Trustee, upon written request
from the Company shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Net Proceeds Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
To the extent that the provisions of any securities laws or regulations
conflict with this Section 3.09 or Section 4.10 hereof, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section 3.09 or Section 4.10 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal amount, premium, if
any, and interest on the Notes or related Obligations on the dates and in the
manner provided in the Notes. Principal amount, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 10:00 a.m. New York time, in the
case of Notes on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal amount,
premium, if any, and interest then due. The Company shall pay all Additional
Interest, if any, in the same manner on the same dates and in the amounts set
forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at a rate equal to the
then applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including postpetition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest (without regard to any applicable grace
period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
(a) The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee or any Registrar) where Notes may be surrendered for registration
of transfer or for exchange and where notices and demands to or upon the Company
in respect of the Notes and this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
(b) The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
(c) The Company hereby designates the Corporate Trust Office of the Trustee
or its Agent, in the Borough of Manhattan, The City of New York as such office
or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes, if not filed electronically with the SEC (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the SEC on Forms 10-Q and 10-K if the Company were required to file such forms,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its consolidated Subsidiaries) and, with respect
to the annual consolidated financial statements, an audit report thereon by the
Company's certified independent accountants; provided, however, that the Company
shall have 105 days after the end of the 2004 fiscal year to deliver the annual
financial information and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" pursuant to this section for the 2004
fiscal year and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports, in each
case, within the time periods specified in the SEC's rules and regulations;
provided, however, that such information and reports shall not be required to
contain (A) any audited or reviewed financial information for EDiX Corporation
on a standalone basis, (B) the condensed quarterly operating results for any
period before 2005 required under Regulation S-X to be included in the
footnotes to the annual financial statements and (C) a calculation of earnings
per share. In addition, following the consummation of the Registered Exchange
Offer or the effectiveness of the Shelf Registration Statement (as defined in
the Appendix), whether or not required by the rules and regulations of the SEC,
the Company shall file a copy of all such information and reports with the SEC
for public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. Notwithstanding the foregoing, such requirements shall be deemed
satisfied prior to the commencement of the Registered Exchange Offer or the
effectiveness of the Shelf Registration Statement by the filing when required
with the SEC of the Exchange Offer Registration Statement (as defined in the
Registration Rights Agreement) and/or Shelf Registration Statement, and any
amendments thereto, with such financial information that satisfies Regulation
S-X of the Securities Act. The Company shall at all times comply with TIA
Section 314(a).
(b) For so long as any Notes remain outstanding, the Company and the
Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Should the Company deliver to the Trustee any such information, reports
or certificates or any annual reports, information, documents and other reports
pursuant to TIA Section 314(a), delivery of such information, reports or
certificates or any annual reports, information, documents and other reports to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or
requirement of notice provided under this Indenture. The Company also shall
comply with Section 314(a)(4) of the TIA.
(b) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
Section 4.05 [Intentionally Omitted].
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07 Restricted Payments.
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on or in respect
of shares of the Company's or any Restated Subsidiary's Capital Stock to holders
of such Capital Stock, including any payment in connection with any merger or
consolidation involving the Company or any of its Restricted Subsidiaries (other
than dividends or distributions payable in Qualified Capital Stock of the
Company or in options, warrants or other rights to purchase such Qualified
Capital Stock dividends or distributions payable to the Company or a Restricted
Subsidiary and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly-Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation));
(2) purchase, redeem or otherwise acquire or retire for value any (i)
Capital Stock of the Company (ii) Capital Stock of any direct or indirect parent
of the Company held by Persons other than the Company, (iii) Capital Stock of a
Restricted Subsidiary of the Company held by any Affiliate of the Company (other
than a Restricted Subsidiary of the Company) or (iv) warrants, rights or options
to purchase or acquire shares of any class of such Capital Stock;
(3) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, any
Indebtedness of the Company, or of any Guarantor, that is subordinate or junior
in right of payment to the Notes or any Guarantee, as applicable (other than the
purchase, defeasance or other acquisition of such Indebtedness purchased in
anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of such purchase, defeasance or other
acquisition); or
(4) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (1), (2), (3) and (4) being referred to
as a "Restricted Payment");
if at the time of such Restricted Payment or immediately after giving
effect thereto:
(i) a Default or an Event of Default shall have occurred and be
continuing (or would result therefrom); or
(ii) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.09 hereof; or
(iii) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment) declared or made subsequent to the Issue Date
(other than Restricted Payments made pursuant to clauses (2), (3), (4),
(5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (16) and (17) of the
following paragraph) shall exceed the sum of, without duplication:
(v) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such
loss) of the Company earned subsequent to January 1, 2005 and on or
prior to the date the Restricted Payment occurs (the "Reference Date")
(treating such period as a single accounting period); plus
(w) 100% of the aggregate net cash proceeds (including the fair
market value of property other than cash that would constitute
Marketable Securities or a Permitted Business) received by the Company
from any Person (other than (1) a Subsidiary of the Company and (2)
Excluded Contributions) from the issuance and sale subsequent to the
Issue Date and on or prior to the Reference Date of Qualified Capital
Stock of the Company; plus
(x) without duplication of any amounts included in clause
(iii)(w) above, 100% of the aggregate net cash proceeds (including the
fair market value of property other than cash, that would constitute
Marketable Securities or a Permitted Business) of any equity
contribution received subsequent to the Issue Date by the Company from
a holder of the Company's Capital Stock (other than Excluded
Contributions) (excluding, in the case of clauses (iii)(w) and this
(iii)(x), any net cash proceeds from an Equity Offering to the extent
used to redeem the Notes in compliance with the provisions set forth
under Section 3.07(c) hereof); plus
(y) the amount by which Indebtedness of the Company is reduced on
the Company's balance sheet upon the conversion or exchange subsequent
to the Issue Date of any Indebtedness of the Company for Qualified
Capital Stock of the Company (less the amount of any cash, or the fair
value of any other property,
distributed by the Company upon such conversion or exchange);
provided, however, that the foregoing amount shall not exceed the net
cash proceeds received by the Company or any Restricted Subsidiary
from the sale of such Indebtedness (excluding net cash proceeds from
sales to a Subsidiary of the Company or to an employee stock ownership
plan or a trust established by the Company or any of its Subsidiaries
for the benefit of their employees); plus
(z) an amount equal to the sum of (I) 100% of the aggregate net
proceeds (including the fair market value of property other than cash
that would constitute Marketable Securities or a Permitted Business)
received by the Company or any Restricted Subsidiary (A) from any sale
or other disposition of any Investment (other than a Permitted
Investment) in any Person (including an Unrestricted Subsidiary) made
by the Company and its Restricted Subsidiaries and (B) representing
the return of capital or principal (excluding dividends and
distributions otherwise included in Consolidated Net Income) with
respect to such Investment, and (II) the portion (proportionate to the
Company's equity interest in an Unrestricted Subsidiary) of the fair
market value of the net assets of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that, in the case of item (II), the
foregoing sum shall not exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted Payment) by
the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary and; provided further, that no amount will be included
under this clause (z) to the extent it is already included in
Consolidated Net Income.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph shall not prohibit:
(1) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of such dividend or
notice of such redemption if the dividend or payment of the redemption price, as
the case may be, would have been permitted on the date of declaration or notice;
(2) any Restricted Payment made out of the net cash proceeds of the
substantially concurrent sale of, or made by exchange for, Qualified Capital
Stock of the Company (other than Capital Stock issued or sold to a Subsidiary of
the Company or an employee stock ownership plan or to a trust established by the
Company or any of its Subsidiaries for the benefit of their employees) or a
substantially concurrent cash capital contribution received by the Company from
its shareholders; provided, however, that the net cash proceeds from such sale
or such cash capital contribution (to the extent so used for such Restricted
Payment) shall be excluded from the calculation of amounts under clauses
(iii)(w) and (iii)(x) of the immediately preceding paragraph;
(3) the acquisition of any Indebtedness of the Company or a Guarantor that
is subordinate or junior in right of payment to the Notes or the applicable
Guarantee through the application of net proceeds of a substantially concurrent
sale for cash (other than to a Subsidiary
of the Company) of Refinancing Indebtedness that is subordinate or junior in
right of payment to the Notes or the applicable Guarantee;
(4) if no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof, the declaration and payment of
dividends to holders of any class or series of Designated Preferred Stock (other
than Disqualified Capital Stock), issued after the Issue Date; provided that, at
the time of the issuance of such stock, the Company, after giving effect to such
issuance on a pro forma basis, would have had a Consolidated Fixed Charge
Coverage Ratio of at least 2.25 to 1.0;
(5) payments to Holdings for the purpose of permitting, and in an amount
equal to the amount required to permit, Holdings to redeem or repurchase
Holdings' common equity or options in respect thereof, in each case in
connection with the repurchase provisions of employee stock option or stock
purchase agreements or other agreements to compensate management employees or
upon the death, disability, retirement, severance or termination of employment
of management employees; provided that all such redemptions or repurchases
pursuant to this clause (5) shall not exceed in any fiscal year the sum of (A)
$1.0 million plus (B) any amounts not utilized in any preceding fiscal year
following the Issue Date that were otherwise available under this clause for
such purchases (which aggregate amount shall be increased by the amount of any
net cash proceeds received from the sale since the Issue Date of Capital Stock
(other than Disqualified Capital Stock) to members of the Company's management
team that have not otherwise been applied to the payment of Restricted Payments
pursuant to the terms of clause (iii) of the immediately preceding paragraph or
clause (2) of this paragraph and by the cash proceeds of any "key-man" life
insurance policies which are used to make such redemptions or repurchases) plus
(C) the amount of any cash bonuses otherwise payable to members of management,
directors or consultants of the Company or any of its Subsidiaries or any of its
direct or indirect parent corporations in connection with the Transactions that
are foregone in return for the receipt of Equity Interests of the Company or any
direct or indirect parent corporation of the Company pursuant to a deferred
compensation plan of such corporation; provided, further, that the cancellation
of Indebtedness owing to the Company from members of management of the Company
or any of its Restricted Subsidiaries in connection with any repurchase of
Capital Stock of Holdings (or warrants or options or rights to acquire such
Capital Stock) will not be deemed to constitute a Restricted Payment under this
Indenture;
(6) the making of distributions, loans or advances Holdings to be used by
Holdings solely (A) to pay its franchise taxes and other fees required to
maintain its corporate existence and the corporate existence of any other direct
or indirect parent of the Company and (B) to pay for operating expenses incurred
by Holdings or any indirect parent of the Company in the ordinary course of its
business; provided, however, that, in the case of clause (B), such
distributions, loans or advances shall not, in the aggregate, exceed $2.5
million per annum;
(7) payments to Holdings, without duplication, in respect of Federal, state
and local taxes directly attributable to (or arising as a result of) the
operations of the Company and its consolidated Subsidiaries and actually used by
Holdings or any other direct or indirect parent of the Company to pay such
taxes; provided, however, that the amount of such payments in any fiscal year do
not exceed the amount that the Company and its consolidated Subsidiaries would
be required to pay in respect of Federal, state and local taxes for such fiscal
year were the Company to pay such taxes as a stand-alone taxpayer;
(8) repurchases of Capital Stock deemed to occur upon the exercise of stock
options, warrants or other convertible securities if such Capital Stock
represents a portion of the exercise price thereof;
(9) additional Restricted Payments in an aggregate amount not to exceed
$7.5 million;
(10) payments to Holdings or any direct or indirect parent of Holdings on
or prior to December 31, 2005 to pay fees to ▇▇▇▇▇ Private Equity Investors LP
or its Affiliates in an aggregate amount not to exceed $1,009,000;
(11) payments to Holdings or any direct or indirect parent of the Company
to pay management fees in an aggregate amount not to exceed $1.0 million per
fiscal year; provided, however, that (a) any such amount referred to above, if
not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next two succeeding fiscal years and (b) amounts
paid pursuant to this clause (11) during any fiscal year shall be deemed made,
first, in respect of amounts carried over from the fiscal year two years prior
thereto pursuant to clause (a) above, second, in respect of amounts carried over
from the immediately prior fiscal year pursuant to clause (a) above, and, third,
in respect of amounts permitted for such fiscal year as provided above;
(12) payments of dividends on Disqualified Capital Stock issued in
compliance with Section 4.09 hereof;
(13) if no Default or Event of Default shall have occurred and be
continuing, Restricted Payments made with Net Cash Proceeds from Asset Sales
remaining after application thereof as required by Section 4.10 hereof
(including after the making by the Company of any Net Proceeds Offer required to
be made by the Company pursuant to such Section and the application of the Net
Proceeds Offer Amount to purchase Notes tendered therein);
(14) upon occurrence of a Change of Control and within 60 days after the
completion of the Change of Control Offer pursuant to Section 4.15 hereof
(including the purchase of all Notes tendered), any purchase or redemption of
Obligations of the Company that are subordinate or junior in right of payment to
the Notes required pursuant to the terms thereof as a result of such Change of
Control at a purchase or redemption price not to exceed 101% of the outstanding
principal amount thereof, plus accrued and unpaid interest thereon, if any;
provided, however, that (A) at the time of such purchase or redemption, no
Default or Event of Default shall have occurred and be continuing (or would
result therefrom), (B) the Company would be able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.09 hereof after giving pro forma effect to such Restricted Payment and
(C) such purchase or redemption is not made, directly or indirectly, from the
proceeds of (or made in anticipation of) any issuance of Indebtedness by the
Company or any Subsidiary;
(15) so long as no Default has occurred and is continuing or would be
caused thereby, the payment of dividends on the Company's Common Stock (or
dividends, distributions or
advances to Holdings or any other direct or indirect parent of the Company to
allow Holdings or such other direct or indirect parent to pay dividends on its
Common Stock)], following the first public offering of the Company's Common
Stock (or of Holdings' or such other direct or indirect parent's Common Stock,
as the case may be) after the Issue Date, of, whichever is earlier, (i) in the
case of the first public offering of the Company's Common Stock, up to 6% per
annum of the Net Cash Proceeds received by the Company in such public offering
or (ii) in the case of the first public offering of Holdings' or such other
direct or indirect parent's Common Stock, up to 6% per annum of the amount
contributed by Holdings (or contributed directly or indirectly by such other
direct or indirect parent, as the case may be) to the Company from the Net Cash
Proceeds received by Holdings or such other direct or indirect parent in such
public offering;
(16) Investments that are made with Excluded Contributions; and
(17) payments to Holdings of fees and expenses payable other than to
Affiliates of Holdings related to any successful or unsuccessful equity or debt
offering not prohibited by this Indenture, regardless of the use of proceeds
thereof.
In determining the aggregate amount of Restricted Payments made subsequent
to the Issue Date in accordance with clause (iii) of the first paragraph of this
Section 4.07, (a) amounts expended pursuant to clauses (1) and (15) of the
immediately preceding paragraph shall be included in such calculation, and (b)
amounts expended pursuant to clauses (2), (3), (4), (5), (6), (7), (8), (9),
(10), (11), (12), (13), (14), (16) and (17) of the immediately preceding
paragraph shall be excluded from such calculation.
The Board of Directors of the Company may designate any Restricted
Subsidiary of the Company to be an Unrestricted Subsidiary as specified in the
definition of "Unrestricted Subsidiary". 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 shall be deemed to be Restricted Payments at the time of the
designation and shall reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. All of those outstanding Investments
shall be deemed to constitute Investments in an amount equal to the fair market
value of the Investments at the time of such designation. Such designation shall
only be permitted if the Restricted Payment would be permitted at the time and
if the Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary of the Company to: (a) pay dividends
or make any other distributions on or in respect of its Capital Stock (it being
understood that the priority of any Preferred Stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions being
paid on Common Stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock); (b) make loans or advances or pay any
Indebtedness or other obligation owed to the Company or any Guarantor (it being
understood that the subordination of loans or advances made to the Company
or any Guarantor to other Indebtedness incurred by the Company or any Guarantor
shall not be deemed a restriction on the ability to make loans or advances); or
(c) transfer any of its property or assets to the Company or any Guarantor,
except, with respect to clauses (a), (b) and (c), for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) this
Indenture; (3) non-assignment provisions of any contract or any lease of any
Restricted Subsidiary of the Company entered into in the ordinary course of
business; (4) any instrument governing Acquired Indebtedness, which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person or the properties or assets of the Person so
acquired; (5) the Credit Facility as entered into on the Issue Date or any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof; provided that any restrictions
imposed pursuant to any such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing are ordinary and
customary with respect to syndicated bank loans (under the relevant
circumstances), as determined in good faith by the Company's Board of Directors,
which determination will be conclusive; (6) agreements existing on the Issue
Date to the extent and in the manner such agreements are in effect on the Issue
Date; (7) restrictions on the transfer of assets subject to any Lien permitted
under this Indenture imposed by the holder of such Lien; (8) restrictions
imposed by any agreement to sell assets or Capital Stock of a Restricted
Subsidiary permitted under this Indenture to any Person pending the closing of
such sale; (9) any agreement or instrument governing Capital Stock of any Person
that is acquired; (10) any Purchase Money Note or other Indebtedness or other
contractual requirements of a Securitization Entity in connection with a
Qualified Securitization Transaction, as determined in good faith by the
Company's Board of Directors, which determination will be conclusive; provided
that such restrictions apply only to such Securitization Entity; (11) other
Indebtedness outstanding on the Issue Date or permitted to be issued or incurred
under this Indenture; provided that any such restrictions are ordinary and
customary with respect to the type of Indebtedness being incurred (under the
circumstances), as determined in good faith by the Company's Board of Directors,
which determination will be conclusive; (12) restrictions on cash or other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business; and (13) any encumbrances or restrictions imposed
by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (4) and (6)
through (12) above; provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are,
in the good faith judgment of the Company's Board of Directors (evidenced by a
Board Resolution) whose judgment shall be conclusively binding, not materially
more restrictive with respect to such dividend and other payment restrictions
than those contained in the dividend or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
Section 4.09 Incurrence of Indebtedness.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee, acquire, become liable, contingently or otherwise, with respect to,
or otherwise become responsible for payment of (collectively, "incur") any
Indebtedness (other than Permitted Indebtedness); provided, however, that if no
Default or Event of Default shall have occurred and be continuing at the time of
or as a
consequence of the incurrence of any such Indebtedness, the Company and the
Guarantors may incur Indebtedness (including, Acquired Indebtedness), and
Restricted Subsidiaries of the Company that are not Guarantors may incur
Acquired Indebtedness in an aggregate amount not to exceed $7.5 million at any
time outstanding, in each case if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof, the Consolidated
Fixed Charge Coverage Ratio of the Company would have been greater than 2.25 to
1.0.
If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary,
any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under this Section 4.09, the Company
shall be in Default of this Section 4.09.
Section 4.10 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
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the
Company's Board of Directors), which determination will be conclusive; (ii) at
least 75% of the consideration received by the Company or the Restricted
Subsidiary, as the case may be, from such Asset Sale shall be in the form of
cash or Cash Equivalents; provided, however, that the amount of: (a) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or such Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes) that are assumed
by the transferee of any such assets; (b) any 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 within
180 days of the receipt thereof (to the extent of the cash received); and (c)
any Designated Noncash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate fair market
value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (c) that is at that time outstanding, not to exceed 5%
of Total Assets at the time of the receipt of such Designated Noncash
Consideration (with the fair market value of each item of Designated Noncash
Consideration being measured at the time received and without giving effect to
subsequent changes in value), shall, in each of (a), (b) and (c) above, be
deemed to be cash for the purposes of this provision or for purposes of the
second paragraph of this Section 4.10; and (iii) upon the consummation of an
Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to
apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of
receipt thereof either (A) to prepay any Senior Debt, or Indebtedness of a
Restricted Subsidiary that is not a Guarantor and, in the case of any such
Indebtedness under any revolving credit facility, effect a corresponding
reduction in the availability under such revolving credit facility (or effect a
permanent reduction in the availability under such revolving credit facility
regardless of the fact that no prepayment is required in order to do so (in
which case no prepayment should be required)), (B) to reinvest in Productive
Assets (provided that this requirement shall be deemed satisfied if the Company
or such Restricted Subsidiary by the end of such 365-day period has entered into
a binding agreement under which it is contractually committed to reinvest in
Productive Assets and such
investment is consummated within 120 days from the date on which such binding
agreement is entered into and, with respect to the amount of such investment,
the reference to the 366th day after an Asset Sale in the second following
sentence shall be deemed to be a reference to the 121st day after the date on
which such binding agreement is entered into (but only if such 121st day occurs
later than such 366th day)), or (C) a combination of prepayment and investment
permitted by the foregoing clauses (iii)(A) and (iii)(B). Pending the final
application of any such Net Cash Proceeds, the Company or such Restricted
Subsidiary may temporarily reduce Indebtedness under a revolving credit
facility, if any, or otherwise invest such Net Cash Proceeds in Cash
Equivalents. On the 366th day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Company or of such Restricted Subsidiary
determines by Board Resolution not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the
next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B)
and (iii)(C) of the next preceding sentence (each a "Net Proceeds Offer Amount")
shall be applied by the Company or such Restricted Subsidiary to make an offer
to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 60 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders and holders of any other
Senior Subordinated Debt of the Company or a Restricted Subsidiary requiring the
making of such an offer, on a pro rata basis, the maximum amount of Notes and
such other Senior Subordinated Debt that may be purchased with the Net Proceeds
Offer Amount at a price equal to 100% of their principal amount (or, in the
event such other Senior Subordinated Debt was issued with significant original
issue discount, 100% of the accreted value thereof), plus accrued and unpaid
interest thereon, if any, to the date of purchase (or, in respect of such other
Senior Subordinated Debt, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Debt); provided, however, that if at any
time any non-cash consideration (including any Designated Noncash Consideration)
received by the Company or any Restricted Subsidiary of the Company, as the case
may be, in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.10. Notwithstanding the foregoing, if
a Net Proceeds Offer Amount is less than $2.5 million, the application of the
Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds
Offer may be deferred until such time as such Net Proceeds Offer Amount plus the
aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net
Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount
from all Asset Sales by the Company and its Restricted Subsidiaries aggregates
at least $2.5 million, at which time the Company or such Restricted Subsidiary
shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts
that have been so deferred to make a Net Proceeds Offer (the first date the
aggregate of all such deferred Net Proceeds Offer Amounts is equal to $2.5
million or more shall be deemed to be a Net Proceeds Offer Trigger Date).
Notwithstanding the immediately preceding paragraph, the Company and its
Restricted Subsidiaries shall be permitted to consummate an Asset Sale without
complying with such paragraph to the extent that: (i) at least 75% of the
consideration for such Asset Sale constitutes Productive Assets, cash, Cash
Equivalents and/or Marketable Securities; and (ii) such Asset Sale is for fair
market value; provided that any consideration consisting of cash, Cash
Equivalents
and/or Marketable Securities received by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph shall constitute Net Cash Proceeds subject to the provisions of
the preceding paragraph.
Notice of each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 30 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in Section 3.09 hereof. To the extent that the aggregate amount of
Notes and other Senior Subordinated Debt tendered pursuant to a Net Proceeds
Offer is less than the Net Proceeds Offer Amount, the Company may use any
remaining Net Proceeds Offer Amount for general corporate purposes or for any
other purpose not prohibited by this Indenture. Upon completion of any such Net
Proceeds Offer, the Net Proceeds Offer Amount shall be reset at zero.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.10, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.10 by virtue thereof.
Section 4.11 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to occur any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates involving aggregate
consideration in excess of $2.0 million (an "Affiliate Transaction"), other than
Affiliate Transactions on terms that are not materially less favorable than
those that might reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate of the
Company; provided, however, that for a transaction or series of related
transactions with an aggregate value of $5.0 million or more, at the Company's
option, either: (i) a majority of the disinterested members of the Board of
Directors of the Company shall determine in good faith that such Affiliate
Transaction is on terms that are not materially less favorable than those that
might reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate of the Company, or
(ii) the Board of Directors of the Company or any such Restricted Subsidiary
party to such Affiliate Transaction shall have received an opinion from a
nationally recognized investment banking, appraisal or accounting firm that such
Affiliate Transaction is either fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries or is on terms not
materially less favorable than those that might reasonably have been obtained in
a comparable transaction at such time on an arm's-length basis from a Person
that is not an Affiliate of the Company.
(b) The restrictions set forth in Section 4.11(a) hereof shall not apply
to: (i) reasonable fees and compensation paid to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions exclusively
between or among the Company and any of its Restricted Subsidiaries or any
entity that becomes a Restricted Subsidiary as a result of such transaction
(other than a Securitization Entity) or exclusively between or among such
Restricted Subsidiaries or any entity that becomes a Restricted Subsidiary as a
result of such transaction, provided that such transactions are not otherwise
prohibited by this Indenture; (iii) any agreement as in effect as of the Issue
Date or any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) or by any replacement agreement thereto so
long as any such amendment or replacement agreement is not more disadvantageous
to the Holders in any material respect than the original agreement as in effect
on the Issue Date as determined in good faith by the Board of Directors of
Company; (iv) Restricted Payments or Permitted Investments permitted by this
Indenture; (v) transactions effected as part of a Qualified Securitization
Transaction; (vi) the payment of customary annual management fees (the amount of
which shall not exceed the management fees permitted to be paid pursuant to
clause (11) of Section 4.07 and shall be included when calculating the amount of
management fees permitted to be so paid) and consulting and advisory fees and
related expenses to the Permitted Holders and their Affiliates made pursuant to
any financial advisory, financing, underwriting or placement agreement or in
respect of other investment banking activities, including, without limitation,
in connection with acquisitions or divestitures which are approved by the Board
of Directors of the Company or such Restricted Subsidiary in good faith; (vii)
payments or loans allowed by law to employees or consultants that are approved
by the Board of Directors of the Company in good faith; (viii) sales of
Qualified Capital Stock; (ix) the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of its obligations under the terms
of, any stockholders' agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Issue Date
and any similar agreements which it may enter into thereafter; provided,
however, that the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of obligations under, any future amendment to any such
existing agreement or under any similar agreement entered into after the Issue
Date shall only be permitted by this clause (ix) to the extent that the terms of
any such amendment or new agreement are not disadvantageous to the Holders of
Notes in any material respect; (x) transactions permitted by, and complying
with, the provisions of Article 5 and Section 11.06 hereof; (xi) any issuance of
securities or other payments, awards, grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors of the Company; (xii)
transactions in which the Company or any Restricted Subsidiary delivers to the
Trustee a letter from a nationally recognized investment banking, appraisal or
accounting firm stating that such transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; and (xiii) transactions
with customers, clients, suppliers, or purchasers or sellers of goods or
services, in each case in the ordinary course of business and otherwise in
compliance with the terms of this Indenture that are fair to the Company or the
Restricted Subsidiaries, in the
reasonable determination of the members of the Board of Directors of the
Company, which determinations shall be conclusive, or are on terms at least as
favorable as might reasonably have been obtained at such time from an
unaffiliated party.
Section 4.12 Liens.
The Company shall not, and shall not cause or permit any Guarantor to,
incur any Secured Debt that is not Senior Debt of such Person, unless
contemporaneously therewith such Person makes effective provision to secure the
Notes or the relevant Guarantee, as applicable, equally and ratably with such
Secured Debt for so long as such Secured Debt is secured by a Lien (the "Initial
Lien"). Any Lien created for the benefit of the Holders of the Notes pursuant to
the preceding sentence shall provide by its terms that such Lien shall be
automatically and unconditionally released and discharged upon the release and
discharge of the Lien securing the other Secured Debt.
Section 4.13 Conduct of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any businesses a majority of whose revenues are not
derived from businesses that are the same or reasonably similar, ancillary or
related to, or a reasonable extension, development or expansion of, the
businesses in which the Company and its Restricted Subsidiaries are engaged on
the Issue Date (which shall include, without limitation, business or operations
of the Company's suppliers and customers). Holdings shall not engage in any
business other than managing its investment in the Company and any business
incidental thereto (including issuing securities to finance such investment).
Section 4.14 Corporate Existence.
Subject to Article 5 and Section 11.06 hereof, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Restricted Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof would not have an
adverse effect on the ability of the Company to perform its obligations under
the Notes or this Indenture.
Section 4.15 Offer to Repurchase upon Change of Control.
(a) If a Change of Control occurs, each Holder shall have the right to
require the Company to purchase all or a portion of such Holder's Notes pursuant
to the offer described below (the "Change of Control Offer"), at a purchase
price equal to 101% of the principal amount thereof plus accrued interest to the
date of purchase. Within 30 days following the date
upon which the Change of Control occurred, the Company must send, by first class
mail, a notice to the Trustee and each Holder, which notice shall govern the
terms of the Change of Control Offer. Such notice shall state, among other
things, the purchase date, which must be no earlier than 30 days nor later than
60 days from the date such notice is mailed, other than as may be required by
law (the "Change of Control Payment Date"). Holders electing to have a Note
purchased pursuant to a Change of Control Offer shall be required to surrender
the Note with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note, completed, to the Paying Agent, at the address specified in
the notice prior to the close of business on the third Business Day prior to the
Change of Control Payment Date.
(b) On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
applicable Trustee the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the Trustee
shall promptly authenticate and mail or deliver (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
Prior to the mailing of the notice referred to in Section 4.15(a) above,
but in any event within 30 days following any Change of Control, the Company
shall: (i) repay in full all Indebtedness under the Credit Facility and all
other Senior Debt the terms of which require repayment upon a Change of Control;
or (ii) obtain the requisite consents under the Credit Facility and all such
other Senior Debt to permit the repurchase of the Notes as provided below. The
Company's failure to comply with the covenant described in the immediately
preceding sentence shall constitute an Event of Default described in clause (c)
and not in clause (b) under Section 6.01 hereof.
(c) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act to the extent such laws and regulations are applicable in
connection with the repurchase of Notes pursuant to a Change of Control Offer.
To the extent that the Company complies with the provisions of any such
securities laws or regulations, the Company shall not be deemed to have breached
its obligations under this Section 4.15.
(d) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 hereof and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
Section 4.16 No Senior Subordinated Debt.
The Company shall not, and shall not permit any Guarantor to, incur or
suffer to exist Indebtedness that is senior in right of payment to the Notes or
such Guarantor's Guarantee, as the case may be, and subordinate in right of
payment to any other Indebtedness of the Company or such Guarantor, as the case
may be; provided that the foregoing does not prohibit subordination of Liens
among holders of Senior Debt.
Section 4.17 Future Guarantees by Domestic Subsidiaries.
Each of the Company's Domestic Subsidiaries that is a guarantor under the
Credit Facilities or that has in the aggregate Indebtedness outstanding of $15.0
million or more owed to Persons other than the Company or any Restricted
Subsidiary, shall execute and deliver a supplemental indenture to the Indenture,
providing for a senior subordinated guarantee of payment of the Notes by such
Domestic Subsidiary; provided, however, that such Domestic Subsidiary need not
execute and deliver such a supplemental indenture if such Domestic Subsidiary
has Total Assets of $10,000 or less, total Indebtedness of $10,000 or less and
does not own any of the material Intellectual Property of the Company and its
Subsidiaries (as determined in good faith by the Company).
Section 4.18 Limitation on Preferred Stock of Restricted Subsidiaries.
The Company shall not permit any of its Restricted Subsidiaries to issue
any Preferred Stock (other than to the Company or to a Restricted Subsidiary of
the Company) or permit any Person (other than the Company or a Restricted
Subsidiary of the Company) to own any Preferred Stock of any Restricted
Subsidiary of the Company, other than Permitted Subsidiary Preferred Stock. The
provisions of this Section 4.18 will not apply to (w) any of the Guarantors for
so long as such Restricted Subsidiary remains a Guarantor, (x) any transaction
otherwise permitted under this Indenture as a result of which neither the
Company nor any of its Restricted Subsidiaries will own any Capital Stock of the
Restricted Subsidiary whose Preferred Stock is being issued or sold and (y)
Preferred Stock (including Disqualified Capital Stock) that is issued in
compliance with Section 4.09 hereof.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) to any Person unless (i) either: (a) the Company shall be the
surviving or continuing corporation; or (b) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or the
Person which acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the Company's
Restricted Subsidiaries substantially as an entirety (the
Surviving Entity"): (x) shall be a corporation organized and validly existing
under the laws of the United States of America or any State thereof or the
District of Columbia; and (y) shall expressly assume, by supplemental indenture
executed and delivered to the Trustee, the due and punctual payment of the
principal of, premium, if any, and interest on all of the Notes and the
performance of every covenant and all obligations of the Company under the
Notes, this Indenture and the Registration Rights Agreement to be performed or
observed on the part of the Company; (ii) except in the case of a merger of the
Company with or into a Wholly-Owned Restricted Subsidiary of the Company and
except in the case of a merger entered into solely for the purpose of
reincorporating the Company in another jurisdiction, immediately after giving
effect to such transaction and the assumption contemplated by clause (i)(b)(y)
above (including giving effect to any Indebtedness and Acquired Indebtedness
incurred in connection with or in respect of such transaction), the Company or
such Surviving Entity, as the case may be, shall be able to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.09 hereof, (iii) except in the case of a merger of the Company with or
into a Wholly-Owned Restricted Subsidiary of the Company and except in the case
of a merger entered into solely for the purpose of reincorporating the Company
in another jurisdiction, immediately after giving effect to such transaction and
the assumption contemplated by clause (i)(b)(y) above (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred
and any Lien granted in connection with or in respect of the transaction), no
Default or Event of Default shall have occurred or be continuing; and (iv) the
Company or the Surviving Entity shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company. However,
transfer of assets (i) between or among the Company and its Restricted
Subsidiaries, (ii) between and among Foreign Subsidiaries that are Restricted
Subsidiaries or (iii) from Foreign Subsidiaries to the Company or a Guarantor
will not be subject to this Section 5.01.
Notwithstanding anything in this Section 5.01 to the contrary, the merger
of HSI Merger Sub, Inc. with and into Spheris Inc. in connection with the
HealthScribe Acquisition on the Issue Date shall be permitted under this
Indenture without complying with the requirements of this Section 5.01.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation, combination or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01
hereof, in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of the Company
under this Indenture and the Notes with the same effect as if such surviving
entity had been named as such and that, in the event of a conveyance or transfer
(but not a lease), the conveyor or transferor (but not a lessor) shall be
released from the provisions of this Indenture.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
"Event of Defaults" are:
(a) the failure to pay interest or any Additional Interest (as required by
the Registration Rights Agreement) on any Notes when the same becomes due and
payable if the default continues for a period of 30 days (whether or not such
payment shall be prohibited by Article 10 or Article 12 hereof);
(b) the failure to pay the principal of or premium, if any, on any Notes
when such principal or premium, if any, becomes due and payable, at maturity,
upon redemption or otherwise (including the failure to make a payment to
purchase Notes tendered pursuant to a Change of Control Offer or a Net Proceeds
Offer on the date specified for such payment in the applicable offer to
purchase) (whether or not such payment shall be prohibited by Article 10 or
Article 12 hereof);
(c) a default in the observance or performance of any other covenant or
agreement contained in this Indenture which default continues for a period of 30
days after the Company receives written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Notes (except in the case
of a default with respect to Section 5.01 or Section 11.06 hereof, which will
constitute an Event of Default with such notice requirement but without such
passage of time requirement);
(d) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Significant Subsidiary of the Company (other
than a Securitization Entity), or the acceleration of the final stated maturity
of any such Indebtedness, if the aggregate principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness,
whether such Indebtedness now exists, or is created after the date of this
Indenture, in default for failure to pay principal at final maturity or which
has been accelerated, aggregates $5.0 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of $5.0 million
(which are not covered by insurance or indemnity as to which the insurer or a
creditworthy indemnitor has not disclaimed coverage) shall have been rendered
against the Company or any of its Significant Subsidiaries or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries),
would constitute a Significant Subsidiary and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable;
(f) the Company or any of its Significant Subsidiaries or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within
the meaning of Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property; or
(iv) makes a general assignment for the benefit of its creditors;
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or group of Restricted Subsidiaries that, taken together (as
of the latest audited consolidated financial statements for the Company and
its Restricted Subsidiaries), would constitute a Significant Subsidiary;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or for all or substantially all of the property of the Company
or any of its Significant Subsidiaries or group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Significant
Subsidiaries or group of Restricted Subsidiaries that, taken together (as
of the latest audited consolidated financial statements for the Company and
its Restricted Subsidiaries), would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
(h) any Guarantee of a Significant Subsidiary, or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary, ceases to be in full force and effect
(except as contemplated by the terms of this Indenture) or is declared null and
void in a judicial proceeding or any Guarantor that is a Significant Subsidiary
or group of Guarantors that taken together (as of the latest audited
consolidated financial statements of the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary denies or disaffirms its
obligations under this Indenture or its Guarantee.
Section 6.02 Acceleration.
If any Event of Default (other than an Event of Default specified in clause
(f) or (g) of Section 6.01 hereof with respect to the Company) shall occur and
be continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare the principal of and accrued interest on
all the Notes to be due and payable immediately by notice in writing to the
Company and the Trustee specifying the respective Event of Default and that it
is a "notice of acceleration" (the "Acceleration Notice"), and the same: (i)
shall become immediately due and payable or (ii) if there are any amounts
outstanding under the Credit Facility, shall become immediately due and payable
upon the first to occur of an acceleration under the Credit Facility and five
Business Days after receipt by the Company and the Representative under the
Credit Facility of such Acceleration Notice but only if such Event of Default is
then continuing. If an Event of Default specified in clause (f) or (g) of
Section 6.01 hereof with respect to the Company occurs and is continuing, then
all unpaid principal of, and premium, if any, and accrued and unpaid interest on
all the outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration with respect to the Notes
as described in the preceding paragraph, the Holders of a majority in principal
amount of the Notes may rescind and cancel such declaration and its
consequences: (i) if the rescission would not conflict with any judgment or
decree; (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal of, premium, if any, and interest on the Notes that has
become due solely because of the acceleration; (iii) to the extent the payment
of such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances; and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (f) or (g) of Section 6.01
hereof, the Trustee shall have received an Officers' Certificate and an Opinion
of Counsel that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
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, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and interest on the Notes (including in
connection with an offer to purchase). Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits.
Except to enforce the right to receive payment of principal, premium, if
any, or interest when due, a Holder of a Note may pursue a remedy with respect
to this Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice stating that
Event of Default is continuing;
(b) the Holders of at least 25% in principal amount of the then outstanding
Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), 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) or (b) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal amount of, premium and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
Any money collected by the Trustee pursuant to this Article and any other
money or property distributable in respect of the Company's or any Guarantors'
obligations under this Indenture after an Event of Default shall be applied in
the following order:
FIRST: to the Trustee (including a predecessor Trustee), its agents and
attorneys for amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee (including a predecessor Trustee) and the costs and expenses of
collection;
SECOND: to holders of Senior Debt of the Company to the extent required by
Article 10 hereof and to holders of Senior Debt of the Guarantors to the extent
required by Article 12 hereof;
THIRD: to Holders of Notes for amounts due and unpaid on the Notes for
principal amount, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal amount, premium, if any, and interest, respectively; and
FOURTH: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
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 of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith 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 which
are specifically required to be delivered to the Trustee by any provision
of this Indenture to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraphs (b) or (e)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c), (e) and (f) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnify satisfactory to it against any loss, liability or
expense.
(f) 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. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) Notwithstanding Section 6.05 hereof, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of Indebtedness or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation.
(h) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The permissive right of the Trustee to take or refrain from taking any
actions enumerated in this Indenture shall not be construed as a duty.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. The Registrar or any Paying Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for
any statement or recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this Indenture
other than its certificate of authentication.
Section 7.05 Notice of Defaults.
(a) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a Default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
(b) Within the earlier of 90 days after the occurrence of a Default or an
Event of Default or 30 days after it is actually known to a Responsible Officer,
the Trustee shall mail to Holders of Notes, as their names and addresses appear
in the security register for the Notes, a notice of the Default or Event of
Default known to the Trustee, unless such Default or Event of Default shall have
been cured or waived. Except in the case of a Default or Event of Default in
payment of principal of, premium, if any, or interest on any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
As promptly as practical but within 60 days after each June 15 and December
15 and beginning with June 15, 2005, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA Section 313(d). The Company
shall promptly notify the Trustee when the Notes are listed on any stock
exchange and any delisting thereof.
Section 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its services as the parties shall agree from time to time. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel. The Company and each Guarantor, jointly and
severally shall indemnify the Trustee against any and all loss, liability,
claim, damage or expense (including reasonable attorneys' fees and expenses)
incurred by or in connection with the acceptance or administration of this trust
and the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture or a Guarantee against the Company or a Guarantor
(including this Section 7.07) and defending itself against or investigating any
claim (whether asserted by the
Company, any Guarantor, any Holder or any other Person). The Trustee shall
notify the Company of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof; provided, however, that any failure so to
notify the Company shall not relieve the Company 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 and the Guarantors, as applicable shall pay the fees and expenses of
such counsel. 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 obligations of the Company and the Guarantors under this Section 7.07
shall survive the resignation or removal of the Trustee, the satisfaction and
discharge of this Indenture and the termination of this Indenture.
To secure the Company's and the Guarantors' payment obligations in this
Section, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, other than money or property held in
trust to pay principal and interest on particular Notes. Such Lien shall survive
the resignation or removal of the Trustee, the satisfaction and discharge and
the termination of this Indenture.
In addition, and without prejudice to the rights provided to the Trustee
under any of the provisions of this Indenture, when the Trustee incurs expenses
or renders services after an Event of Default specified in Section 6.01(f) or
(g) hereof occurs, the expenses and the compensation for the services (including
the fees and expenses of its agents and counsel) are intended to constitute
expenses of administration under any Bankruptcy Law.
"Trustee" for purposes of this Section shall include any predecessor
Trustee and the Trustee in each of its capacities hereunder and each agent,
custodian and other person employed to act hereunder; provided, however, that
the negligence, willful misconduct or bad faith of any Trustee hereunder shall
not affect the rights of any other Trustee hereunder.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing and may appoint a
successor trustee. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a bona fide holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another Person,
the resulting, surviving, transferee or successor Person without any further act
shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any State thereof, that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a). The Trustee is subject to TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311 (a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal amount of, premium, if any, and interest on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (d) the provisions of this Article 8 with respect to Legal
Defeasance. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section
8.04 hereof, be released from its obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(d) and 6.01(e) hereof shall not constitute
Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash or non-callable Government Obligations, or a
combination of cash and non-callable Government Obligations, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal amount at maturity of,
premium, if any, and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States of
America reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for Federal income tax
purposes as a result of such Legal Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States of
America reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes 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 to securing such borrowing) or insofar as Section 6.01 (f) or 6.01(g)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture (other than
a Default or an Event of Default resulting from the borrowing of funds to be
applied to such deposit and the grant of any Lien securing such borrowing) or
any other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that (A) the trust funds will not be subject to any rights of
holders of Senior Debt including, without limitation, those arising under this
Indenture, and (B) after the 91st day following the deposit, the trust funds
will not be subject to the effect of the preference provisions of Section 547 of
the United States Federal Bankruptcy Code;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(i) the Company shall have paid or duly provided for payment of all amounts
then due to the Trustee pursuant to Section 7.07 hereof.
Notwithstanding the foregoing, the Opinion of Counsel required by clause
(b) above with respect to a Legal Defeasance need not be delivered if all Notes
not therefor delivered to the Trustee for cancellation (A) have become due and
payable, or (B) will become due and payable on the maturity date within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
Section 8.05 Deposited Money and Government Obligations to Be Held in Trust;
Other
Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance
with the provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Notes of all sums
due and to become due thereon in respect of principal amount, premium, if any,
and interest, but such money need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Obligations deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 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 non-callable Government Obligations held by it as provided
in Section 8.04 hereof which, 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
8.04(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 8.06 Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of the
Notes, as expressly provided for in this Indenture) as to all outstanding Notes
when (i) either (a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust) have been delivered to the Trustee for
cancellation or (b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, pursuant to an optional redemption
notice or otherwise, and the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and discharge
the entire Indebtedness on the Notes not theretofore delivered to the Trustee
for cancellation, for principal of, premium, if any, and interest on the Notes
to the date of deposit together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be; (ii) the Company has paid all other sums payable
under this Indenture by the Company; and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel stating that all
conditions precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Section 8.07 Repayment to Company.
Each of the Trustee and each Paying Agent shall promptly turn over to the
Company upon request any money or Government Obligations held by it as provided
in this Article which, in the written opinion of nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall
only be required if Government Obligations have been so
deposited), are in excess of the amount thereof which would then be required to
be deposited to effect an equivalent discharge or defeasance in accordance with
this Article.
Subject to any applicable abandoned property law, the Trustee and each
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to the money must look to the Company
for payment as general creditors, and the Trustee and each Paying Agent shall
have no further liability with respect to such monies.
Section 8.08 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or noncallable Government Obligations in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
Section 8.09 Survival.
The Trustee's rights under this Article 8 shall survive termination of this
Indenture.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture, the Guarantees or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code)
or to alter the provisions of Article 2 or the Appendix hereof relating to the
form of the Notes (including the related definitions) in a manner that does not
adversely affect any Holder;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Company or a
Guarantor pursuant to Article 5 or Section 11.06 hereof,
(d) to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
hereunder of any Holder of the Notes;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Notes issued after the Issue Date in
accordance with the limitations set forth in this Indenture;
(g) to release any Guarantor from its Guarantee in accordance with this
Indenture;
(h) to allow any Guarantor to execute a supplemental indenture and/or a
Guarantee with respect to the Notes; or
(i) make any change in Article 10 and Article 12 of this Indenture that
would limit or terminate the benefits available to any holder of Senior Debt of
the Company or a holder of Guarantor Senior Debt (or any Representative thereof)
under such Article 10 and Article 12.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
(a) Except as provided below in this Section 9.02, this Indenture
(including Sections 3.09, 4.10 and 4.15 hereof), the Guarantees and the Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Guarantees or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes
are considered to be "outstanding" for purposes of this Section 9.02.
(b) Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
(c) It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
(d) After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the principal of or change or have the effect of changing the
fixed maturity of any Note, or change the date on which any Notes may be subject
to redemption or reduce the redemption price therefor;
(3) reduce the rate of or change or have the effect of changing the time
for payment of interest, including defaulted interest, but excluding Additional
Interest, on any Note;
(4) make any Note payable in money other than that stated in the Notes;
(5) make any change in the provisions of this Indenture protecting the
right of each Holder to receive payment of principal of or interest on any Note
on or after the due date thereof or to bring suit to enforce such payment, or
permitting Holders of a majority in principal amount of Notes to waive Defaults
or Events of Default;
(6) after the Company's obligation to purchase Notes arises thereunder,
amend, change or modify in any material respect the obligation of the Company to
make and consummate a Change of Control Offer in the event of a Change of
Control or modify any of the provisions or definitions with respect thereto
after a Change of Control has occurred;
(7) modify or change any provision of this Indenture, including the
Guarantees or the related definitions, affecting the subordination or ranking of
the Notes or the Guarantees in a manner which adversely affects the Holders; or
(8) make any change in the foregoing amendment and waiver provisions.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 or 12 hereof or any supplemental indenture
to this Indenture providing for a Guarantee of the Notes by a Restricted
Subsidiary of the Company of any holder of Senior Debt of the Company or of a
Guarantor then outstanding (including any such change of this paragraph of this
Section 9.02) unless the holders of such Senior Debt (or their Representative)
consent to such change.
Section 9.03 Compliance with Trust Indenture Act.
From the date on which this Indenture is qualified under the TIA, every
amendment or supplement to this Indenture or the Notes shall be set forth in a
amended or supplemental Indenture that complies with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article 9 if the amendment, supplement or waiver does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 13.04 hereof, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amendment, supplement or waiver is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver 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 hereof).
Section 9.07 Additional Voting Terms; Calculation of Principal Amount.
Except as provided in the proviso to the third sentence of Section 9.02(d),
all Notes issued under this Indenture shall vote and consent together on all
matters (as to which any of such Notes may vote) as one class and no series of
Notes will have the right to vote or consent as a separate class on any matter.
Determinations as to whether Holders of the requisite aggregate principal amount
of Notes have concurred in any direction, waiver or consent shall be made in
accordance with this Article 9.
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes and related Obligations are subordinated in
right of payment, to the extent and in the manner provided in this Article 10,
to the prior payment in cash 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 such Senior Debt. The Notes and related Obligations shall in all
respects rank pari passu with all other Senior Subordinated Debt of the Company
and only Senior Debt of the Company shall rank senior to the Notes in accordance
with the provisions set forth herein. All provisions of this Article 10 shall be
subject to Section 10.12.
Section 10.02 Liquidation, Dissolution, Bankruptcy.
Upon any payment or distribution of the assets or securities of the Company
to creditors upon (i) a total or partial liquidation or a total or partial
dissolution of the Company; (ii) in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property or
(iii) an assignment for the benefit of creditors or marshaling of the Company's
assets and liabilities:
(1) holders of Senior Debt of the Company shall be entitled to receive
payment in full in cash of such Senior Debt (including interest accruing after,
or which would accrue but for, the commencement of any proceeding at the rate
specified in the applicable Senior Debt, whether or not a claim for such
interest would be allowed) before Holders shall be entitled to receive any
payment or distribution; and
(2) until the Senior Debt of the Company is paid in full in cash, any
payment or distribution to which Holders would be entitled but for this Article
10 shall be made to holders of
such Senior Debt as their interests may appear, except that Holders of the Notes
may receive and retain Permitted Junior Securities.
Section 10.03 Default on Senior Debt of the Company.
The Company shall not pay the principal of, premium, if any, or interest on
the Notes or related Obligations or make any deposit pursuant to Section 8.04
and may not purchase, redeem or otherwise retire any Notes (collectively, "pay
the Notes") if either of the following (a "Payment Default") occurs: (1) any
Designated Senior Debt of the Company is not paid in full in cash when due; or
(2) any other default on Designated Senior Debt of the Company occurs and the
maturity of such Designated Senior Debt is accelerated in accordance with its
terms unless, in either case, the Payment Default has been cured or waived and
any such acceleration has been rescinded or such Designated Senior Debt has been
paid in full in cash; provided, however, that the Company shall be entitled to
pay the Notes without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of all
Designated Senior Debt with respect to which the Payment Default has occurred
and is continuing. During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Debt of the Company pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be necessary to effect such acceleration) or the
expiration of any applicable grace periods, the Company shall not pay the Notes
for a period (a "Payment Blockage Period") commencing upon the receipt by the
Trustee of (with a copy to the Company) written notice (a "Blockage Notice") of
such default from the Representative of such Designated Senior Debt specifying
an election to effect a Payment Blockage Period and ending 179 days thereafter.
The Payment Blockage Period shall end earlier if such Payment Blockage Period is
terminated (1) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice; (2) because the default giving rise to
such Blockage Notice is cured, waived or otherwise no longer continuing; or (3)
because such Designated Senior Debt has been repaid in full in cash.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section), unless the holders of such Designated Senior Debt or the
Representative of such Designated Senior Debt shall have accelerated the
maturity of such Designated Senior Debt, or any other Payment Default exists,
the Company shall be entitled to resume payments on the Notes after termination
of such Payment Blockage Period. The Notes shall not be subject to more than one
Payment Blockage Period in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Debt of the Company during
such period; provided, however, that if any Blockage Notice within such 360-day
period is given to the Trustee by or on behalf of any holders of Designated
Senior Debt of the Company (other than the Bank Indebtedness), the
Representative of the Bank Indebtedness shall be entitled to give another
Blockage Notice within such period; provided further, however, that in no event
shall the total number of days during which any Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during any 360-day
consecutive period, and there must be 181 days during any 360-day consecutive
period during which no Payment Blockage Period is in effect. For purposes of
this Section, no default or event of default which existed or was continuing on
the date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Debt of the Company initiating such Payment Blockage Period
shall be, or be made, the basis of the commencement of a subsequent Payment
Blockage Period by the Representative of such Designated Senior Debt, whether or
not within a period of
360 consecutive days, unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
Section 10.04 Acceleration of Payment of Notes.
If payment of the Notes is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Debt of the Company (or their Representatives) of the acceleration. If
any Designated Senior Debt of the Company is outstanding, the Company shall not
pay the Notes until five Business Days after the Representatives of all the
issues of Designated Senior Debt of the Company receive notice of such
acceleration and, thereafter, shall be entitled to pay the Notes only if this
Article 10 otherwise permits payment at that time.
Section 10.05 When Payment or Distribution Must Be Paid Over.
If a payment or distribution is made to the Trustee or Holders that because
of this Article 10 should not have been made to them, such payment or
distribution shall be received and applied by the Trustee or the Holders, as
applicable, for the benefit of the holders of Senior Debt, and shall be paid
over or delivered by the Trustee or the Holders, as applicable, to the holders
of the Senior Debt for application to the payment of all Senior Debt.
Section 10.06 Subrogation.
After all Senior Debt of the Company is paid in full in cash and until the
Notes are paid in full, Holders shall be subrogated to the rights of holders of
such Senior Debt to receive distributions applicable to such Senior Debt. A
payment or distribution made under this Article 10 to holders of such Senior
Debt which otherwise would have been made to Holders is not, as between the
Company and Holders, a payment by the Company on such Senior Debt.
Section 10.07 Relative Rights.
This Article 10 defines the relative rights of Holders and holders of
Senior Debt of the Company. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
on the Notes in accordance with their terms; or
(2) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of Senior Debt of the
Company to receive payments and distributions otherwise payable to Holders.
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 Indebtedness evidenced by the Notes 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 or any other provision of this Indenture or
the Notes, the Trustee or Paying Agent shall continue to make payments on the
Notes and shall not be charged with knowledge of the existence of facts that
under this Article 10 would prohibit the making of any such payments unless, not
less than one Business Day prior to the date of such payment, a Responsible
Officer of the Trustee receives written notice satisfactory to it that such
payments may not be made under this Article 10 and, prior to the receipt of any
such written notice, the Trustee, shall be entitled in all respects conclusively
to presume that no such fact exists. Unless a Responsible Officer of the Trustee
shall have received the notice provided for in the preceding sentence, the
Trustee shall have full power and authority to receive such payment and to apply
the same to the purpose for which it was received, and shall not be affected by
any notice to the contrary which may be received by it on or after such date.
The foregoing shall not apply to any Affiliate of the Company acting as Paying
Agent. The Company, a Representative or a holder of Senior Debt of the Company
shall be entitled to give such notice; provided, however, that, if an issue of
Senior Debt of the Company has a Representative, only the Representative shall
be entitled to give the notice.
The Trustee in its individual or any other capacity shall be entitled to
hold Senior Debt of the Company with the same rights it would have if it were
not Trustee. The Registrar and the Paying Agent shall be entitled to do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 10 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 such Senior Debt;
and nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Notwithstanding anything in this Article 10 to the contrary, all amounts
owed to the Trustee (including amounts owed pursuant to Sections 6.10 and 7.07
hereof) in each of its capacities hereunder shall not be subordinated to any
Senior Debt of the Company or otherwise and shall not be subject to this Article
10.
Each Paying Agent shall not be permitted to make payments or distributions
to the extent the Trustee is prohibited by this Article 10 from doing so and
shall be required to turn over payments and distributions to the same extent as
the Trustee is so required.
Section 10.10 Payment or Distribution or Notice to Representative.
Whenever any Person is to make a payment or distribution or give a notice
to holders of Senior Debt of the Company, such Person shall be entitled to make
such payment or distribution or give such notice to their Representative (if
any).
Section 10.11 Not To Prevent Events of Default or Limit Right To
Accelerate.
The failure to make a payment pursuant to the Notes by reason of any
provision in this Article 10 shall not be construed as preventing the occurrence
of a Default. Nothing in this Article 10 shall have any effect on the right of
the Holders or the Trustee to accelerate the maturity of the Notes.
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 8
hereof by the Trustee for the payment of principal of and interest on the Notes
shall not be subordinated to the prior payment of any Senior Debt of the Company
or subject to the restrictions set forth in this Article 10 if the provisions of
this Article 10 were not violated at the time funds were deposited in trust with
the Trustee pursuant to Article 8 hereof, and none of the Holders 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 10, the Trustee
and the Holders shall be entitled to rely (1) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 10.02 hereof are pending, (2) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (3) upon the Representatives of Senior Debt
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. 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 10, the Trustee shall be entitled to
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Debt 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 10, and,
if such evidence is not furnished, the Trustee shall be entitled to 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 hereof
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 10.
Section 10.14 Trustee To Effectuate Subordination.
Each Holder by accepting a Note 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 Holders and the holders of Senior Debt
of the Company as provided in this Article 10 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 of the
Company.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt of the Company and shall not be liable to any such holders in the
event that the Trustee, acting in good faith, shall mistakenly pay over or
distribute to holders, the Company or any other Person, money or assets to which
any holders of Senior Debt of the Company are entitled by virtue of this Article
10 or otherwise.
Section 10.16 Reliance by Holders of Senior Debt of the Company on
Subordination Provisions.
Each Holder by accepting a Note 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 Notes,
to acquire and continue to hold, or to continue to hold, such Senior Debt and
such holder of such 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 11
GUARANTEES
Section 11.01 Guarantees.
Each Guarantor hereby unconditionally and irrevocably guarantees, jointly
and severally, to each Holder and to the Trustee and its successors and assigns
(a) the full and punctual payment of principal of and premium, if any, and
interest, including Additional Interest, if any, on the Notes when due, whether
at maturity, by acceleration, by redemption or otherwise and (b) the full and
punctual payment and performance within applicable grace periods of all other
Obligations of the Company (including obligations to the Trustee) under this
Indenture and the Notes whether for fees, expenses, indemnification or otherwise
under this Indenture and the Notes (all 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 will remain bound under this Article 11 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
Notes 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 Notes or any other agreement or
otherwise; (b) any extension or renewal of this Indenture, the Notes or any
other agreement; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Notes or any other agreement; (d)
the release of any security held by any Holder or the Trustee for the Guaranteed
Obligations or any Guarantor; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) except as set forth in Section 11.07, any change in the ownership of such
Guarantor.
Each Guarantor hereby waives any right to which it may be entitled to have
its obligations hereunder divided among the Guarantors, such that such
Guarantor's obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Company first be used and depleted as payment of the Company's or such
Guarantor's obligations hereunder prior to any amounts being claimed from or
paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may
be entitled to require that the Company be sued prior to an action being
initiated against such Guarantor.
Each Guarantor further agrees that its 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.
Each Guarantee is, to the extent and in the manner set forth in Article 12
hereof, subordinated and subject in right of payment to the prior payment in
full of the principal of and premium, if any, and interest and other Senior Debt
of the Guarantor giving such Guarantee and each Guarantee is made subject to
such provisions of this Indenture.
Except as expressly set forth in Sections 11.02 and 11.07 hereof, 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
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 Notes 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 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 such
Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
Each Guarantor further agrees that its 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 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 (1) the unpaid principal amount of such Guaranteed Obligations, (2)
accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by applicable law) and (3) all other monetary 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 in cash of all Guaranteed Obligations
and all obligations to which the Guaranteed Obligations are subordinated as
provided in Article 12. 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 may be accelerated as provided in Article 6 for
the purposes of such Guarantor's 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 6, 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.
Upon request of the Trustee (which request the Trustee shall under no
circumstances be obligated to make), each Guarantor shall execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
Section 11.02 Limitation on Liability.
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 hereby guaranteed
without rendering this Indenture, as it relates to such Guarantor, void or
voidable under applicable law relating to solvency, fraudulent conveyance or
fraudulent transfer, prohibited distributions to shareholders or similar laws
affecting the rights of creditors generally.
Section 11.03 Successors and Assigns.
This Article 11 shall be binding upon each Guarantor and its successors and
assigns and shall inure 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 Notes 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 11 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 11 at law, in equity, by
statute or otherwise.
Section 11.05 Modification.
No modification, amendment or waiver of any provision of this Article 11,
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.
Section 11.06 Guarantors May Consolidate, etc., on Certain Terms.
Each Guarantor shall not, and the Company shall not permit any such
Guarantor to, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of, in a single transaction or series of
related transactions, all or substantially all of its assets to any Person
unless:
(1) (except in the case of such Guarantor that has been disposed of in its
entirety to another Person (other than to the Company or an Affiliate of the
Company), whether through a merger, consolidation or sale of Capital Stock or
through the sale of all or substantially all of its assets (such sale
constituting the disposition of such Guarantor in its entirety), if in
connection therewith the Company provides an Officers' Certificate to the
Trustee to the effect that the Company will comply with its obligations under
Section 4.10 hereof in respect of such disposition) the resulting, surviving or
transferee Person (if not such Guarantor) shall be a Person organized and
validly existing under the laws of the jurisdiction under which such Guarantor
was organized or under the laws of the United States of America, any State
thereof or the District of Columbia, and such Person shall expressly assume, by
a supplemental indenture (in form and substance satisfactory to the Trustee),
executed and delivered to the Trustee, all the obligations of such Guarantor, if
any, under its Guarantee;
(2) except in the case of a merger of such Guarantor with or into the
Company or another Restricted Subsidiary of the Company that is a Guarantor and
except in the case of a merger entered into solely for the purpose of
reincorporating such Guarantor in another jurisdiction, immediately after giving
effect to such transaction and the assumption contemplated by the immediately
preceding clause (a)(1) (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness incurred and any Lien granted in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred and be continuing; and
(3) the Company 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 the Indenture relating to such
transaction have been satisfied.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Guarantee of the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the
Guarantees of the Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the Guarantees so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Guarantees theretofore and thereafter issued in accordance with the terms
of this Indenture as though all of such Guarantees had been issued at the date
of the execution hereof.
Section 11.07 Release of Guarantor.
(a) Upon the sale (including any sale pursuant to any exercise of remedies
by a holder of Senior Debt of the Company or of such Guarantor) or other
disposition (including by way of consolidation or merger) of a Guarantor that is
a Restricted Subsidiary of the Company or the sale or disposition of all or
substantially all the assets of such Guarantor (in each case other than a sale
or disposition to the Company or an Affiliate of the Company and if in
connection therewith the Company provides an Officers' Certificate to the
Trustee to the effect that the Company will comply with its obligations under
Section 4.10 hereof in respect of such disposition),
(b) Upon designation of a Guarantor as an Unrestricted Subsidiary pursuant
to the terms of this Indenture, or
(c) If the Company exercises its Legal Defeasance option or its Covenant
Defeasance option in accordance with the provisions of Article 8 hereof or if
its obligations under this Indenture are discharged in accordance with Section
8.06 hereof,
then each Guarantor shall be released from all obligations under this Article 11
without any further action required on the part of the Trustee or any Holder.
At the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing the release of a Guarantor pursuant to this
Section 11.07.
Section 11.08 Contribution.
Each Guarantor that makes a payment under its Guarantee shall be entitled
upon payment in full in cash of all Guaranteed Obligations to a contribution
from each other Guarantor in an amount equal to such other Guarantor's pro rata
portion of such payment based on the respective net assets of all the Guarantors
at the time of such payment determined in accordance with GAAP.
Section 11.09 Execution of Supplemental Indenture for Future
Guarantors.
Each Subsidiary and other Person which is required to become a Guarantor
pursuant to Section 4.17 shall promptly execute and deliver to the Trustee a
supplemental indenture in the form of Exhibit D hereto pursuant to which such
Subsidiary or other Person shall become a Guarantor under this Article 11 and
shall guarantee the Guaranteed Obligations. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee an Opinion of Counsel and an Officers' Certificate to the effect that
such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary or
other Person and that, subject to the application of bankruptcy, insolvency,
moratorium, fraudulent conveyance or transfer and other similar laws relating to
creditors' rights generally and to the principles of equity, whether considered
in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms and/or to such other matters as the
Trustee may reasonably request.
ARTICLE 12
SUBORDINATION OF GUARANTEES
Section 12.01 Agreement To Subordinate.
Each Guarantor agrees, and each Holder by accepting a Note agrees, that the
Indebtedness in respect of the Notes and related Obligations evidenced by or
resulting from such Guarantor's Guarantee under this Indenture and all other
payment obligations of such Guarantor in respect of the Notes (the "Guarantor
Obligations") are subordinated in right of payment, to the extent and in the
manner provided in this Article 12, to the prior payment in cash 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 such Senior Debt. The Guarantor
Obligations of a Guarantor shall in all respects rank pari passu with all other
Senior Subordinated Debt of such Guarantor and only Senior Debt of such
Guarantor (including such Guarantor's Guarantee of Senior Debt of the Company)
shall rank senior to the Guarantor Obligations of such Guarantor in accordance
with the provisions set forth herein.
Section 12.02 Liquidation, Dissolution, Bankruptcy.
Upon any payment or distribution of the assets of any Guarantor to
creditors upon (i) a total or partial liquidation or a total or partial
dissolution of such Guarantor; (ii) in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Guarantor or its property;
or (iii) an assignment for the benefit of creditors or marshaling of such
Guarantor's assets and liabilities:
(1) holders of Senior Debt of such Guarantor shall be entitled to receive
payment in full in cash of such Senior Debt (including interest accruing after,
or which would accrue but for, the commencement of any proceeding at the rate
specified in the applicable Senior Debt, whether or not a claim for such
interest would be allowed) before Holders shall be entitled to receive any
payment or distribution in respect of the Guarantor Obligations of such
Guarantor; and
(2) until the Senior Debt of such Guarantor is paid in full in cash, any
payment or distribution to which Holders would be entitled but for this Article
12 shall be made to holders of such Senior Debt as their interests may appear,
except that Holders of the Notes may receive and retain Permitted Junior
Securities.
Section 12.03 Default on Senior Debt of Guarantor.
No Guarantor shall make any payment on its Guarantee or purchase, redeem or
otherwise retire or defease any Notes or other Guarantor Obligations
(collectively, "pay its Guarantee") if either of the following (a "Payment
Default") occurs: (1) any Designated Senior Debt of the Company or of such
Guarantor is not paid in full in cash when due; or (2) any other default on
Designated Senior Debt of such Guarantor occurs and the maturity of such
Designated Senior Debt is accelerated in accordance with its terms; unless, in
either case, the Payment Default has been cured or waived and any such
acceleration has been rescinded or such Designated Senior Debt has been paid in
full in cash; provided, however, that any Guarantor shall be entitled to pay its
Guarantee without regard to the foregoing if the Company and the Trustee receive
written notice approving such payment from the Representative of all Designated
Senior Debt with respect to which the Payment Default has occurred and is
continuing. During the continuance of any Payment Blockage Period (as defined in
Section 10.03), no Guarantor shall pay its Guarantee. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of such Designated Senior Debt or the Representative of such Designated Senior
Debt shall have accelerated the maturity of such Designated Senior Debt, or any
other Payment Default exists, any Guarantor shall be entitled to resume payments
pursuant to its Guarantee after termination of such Payment Blockage Period.
Section 12.04 Demand for Payment.
If a demand is made on a Guarantor pursuant to Article 11 hereof to pay its
Guarantee, the Trustee shall promptly notify the holders of the Designated
Senior Debt of such Guarantor (or their Representatives) of such demand. If any
Designated Senior Debt of a Guarantor is outstanding, such Guarantor shall not
pay its Guarantee until five Business Days after the Representatives of all the
issuers of Designated Senior Debt of such Guarantor receive notice of demand for
payment under its Guarantee and, thereafter, shall be entitled to pay its
Guarantee only if this Article 12 otherwise permits payment at that time.
Section 12.05 When Payment or Distribution Must Be Paid Over.
If a payment or distribution is made to the Trustee or Holders that because
of this Article 12 should not have been made to them, such payment or
distribution shall be received and applied by the Trustee or the Holders, as
applicable, for the benefit of the holders of Senior Debt, and shall be paid
over or delivered by the Trustee or the Holders, as applicable, to the holders
of the Senior Debt for application to the payment of all Senior Debt.
Section 12.06 Subrogation.
After all Senior Debt of a Guarantor is paid in full in cash and until the
Notes are paid in full, Holders shall be subrogated to the rights of holders of
such Senior Debt to receive distributions applicable to Senior Debt of such
Guarantor. A payment or distribution made under this Article 12 to holders of
such Senior Debt which otherwise would have been made to Holders is not, as
between the relevant Guarantor and Holders, a payment by such Guarantor on such
Senior Debt.
Section 12.07 Relative Rights.
This Article 12 defines the relative rights of Holders and holders of
Senior Debt of a Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Holders, the obligation of such
Guarantor, which is absolute and unconditional, to pay its Guarantee to the
extent set forth in Article 11; or
(2) prevent the Trustee or any Holder from exercising its available
remedies upon a default by such Guarantor under its Guarantee, subject to the
rights of holders of Senior Debt of such Guarantor to receive payments and
distributions otherwise payable to Holders.
Section 12.08 Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt of any Guarantor to enforce the
subordination of the 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 or any other provision of this Indenture, any
Guarantee or the Notes, the Trustee or Paying Agent shall continue to make
payments on any Guarantee 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 one Business Day prior to the date of such payment, a Responsible
Officer of the Trustee receives written notice satisfactory to it that such
payments may not be made under this Article 12 and, prior to the receipt of any
such written notice, the Trustee, shall be entitled in all respects conclusively
to presume that no such fact exists. Unless a Responsible Officer of the Trustee
shall have received the notice provided for in the preceding sentence, the
Trustee shall have full power and authority to receive such payment and to apply
the same to the purpose for which it was received, and shall not be affected by
any notice to the contrary which may be received by it on or after such date.
The foregoing shall not apply to any Affiliate of the Company acting as Paying
Agent. The Company, the relevant Guarantor, a Representative or a holder of
Senior Debt of such Guarantor shall be entitled to give such notice; provided,
however, that, if an issue of Senior Debt of any Guarantor has a Representative,
only the Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be entitled to
hold Senior Debt of any Guarantor with the same rights it would have if it were
not the Trustee. The 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 12 with respect to any Senior Debt of any Guarantor which may at any
time be held by it, to the same extent as any other holder of such Senior Debt;
and nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Notwithstanding anything in this Article 12 to the contrary, all amounts
owed to the Trustee (including amounts owed pursuant to Sections 6.10 and 7.07
hereof) in each of its capacities hereunder shall not be subordinated to any
Senior Debt of a Guarantor or otherwise and shall not be subject to this Article
12.
Each Paying Agent shall not be permitted to make payments or distribution
to the extent the Trustee is prohibited by Article 12 from doing so and shall be
required to turn over payments and distributions to the same extent as the
Trustee is so required.
Section 12.10 Payment or Distribution or Notice to Representative.
Whenever any Person is to make a payment or distribution or give a notice
to holders of Senior Debt of any Guarantor, such Person shall be entitled to
make such payment or distribution or give such notice to their Representative
(if any).
Section 12.11 Article 12 Not To Prevent Events of Default or Limit
Right To Demand Payment.
The failure to make a payment pursuant to a Guarantee by reason of any
provision in this Article 12 shall not be construed as preventing the occurrence
of a Default. Nothing in this Article 12 shall have any effect on the right of
the Holders or the Trustee to make a demand for payment on any Guarantor
pursuant to its Guarantee.
Section 12.12 Trustee Entitled To Rely.
Upon any payment or distribution pursuant to this Article 12, the Trustee
and the Holders shall be entitled to rely (1) 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, (2) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Holders or (3) upon the Representatives for the holders of
Senior Debt of any Guarantor for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Debt and other indebtedness of such 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 12. 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 any Guarantor to participate in any
payment or distribution pursuant to this Article 12, the Trustee shall be
entitled to 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 12, and, if such evidence is not furnished, the
Trustee shall be entitled to 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 12.
Section 12.13 Trustee To Effectuate Subordination.
Each Holder by accepting a Note 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 Holders and the holders of Senior Debt
of any Guarantor as provided in this Article 12 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
Guarantor.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt of any Guarantor and shall not be liable to any such holders in the
event that the Trustee, acting in good faith, shall mistakenly pay over or
distribute to holders, the Company or any other Person, money or assets to which
any holders such Senior Debt are entitled by virtue of this Article 12 or
otherwise.
Section 12.15 Reliance by Holders of Senior Debt of Guarantors on
Subordination Provisions.
Each Holder by accepting a Note 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 any Guarantor, whether such
Senior Debt was created or acquired before or after the issuance of the Notes,
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 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company and/or any Guarantor:
Spheris Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
With copies to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Division - Corporate Finance Unit
The Company, any Guarantor or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders or the
Trustee) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
All notices and communications sent to the Trustee shall be deemed to have been
duly given when actually received.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee, each Paying Agent and the Registrar at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of
Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form 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 and covenants, if
any, provided for in this Indenture relating to the proposed action have been
complied with; and
(b) an Opinion of Counsel in form 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 and
covenants have been complied with.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she has or they
have 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
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES.
Section 13.08 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.09 Successors.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their respective successors. All agreements of the Trustee in
this Indenture shall bind its successors.
Section 13.10 Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 13.11 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 13.12 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 13.13 Currency of Account; Conversion of Currency; Foreign
Exchange Restrictions.
(a) U.S. Dollars are the sole currency of account and payment for all sums
payable by the Company and the Guarantors under or in connection with the Notes,
the Guarantees of the Notes or this Indenture to the extent it relates to the
Notes, including damages related thereto. Any amount received or recovered in a
currency other than U.S. Dollars by a Holder of Notes (whether as a result of,
or of the enforcement of, a judgment or order of a court of any jurisdiction, in
the winding-up or dissolution of the Company or otherwise) in respect of any sum
expressed to be due to it from the Company shall only constitute a discharge to
the Company to the extent of the U.S. Dollar amount, as the case may be, which
the recipient is able to purchase with the amount so received or recovered in
that other currency on the date of that receipt or recovery (or, if it is not
practicable to make that purchase on that date, on the first date on which it is
practicable to do so). If that U.S. Dollar amount is less than the U.S. Dollar
amount expressed to be due to the recipient under the applicable Notes, the
Company shall indemnify it against any loss sustained by it as a result as set
forth in Section 13.13(b). In any event, the Company and the Guarantors shall
indemnify the recipient against the cost of making any such purchase. For the
purposes of this Section 13.13, it will be sufficient for the Holder of a Note
to certify in a satisfactory manner (indicating sources of information used)
that it would have suffered a loss had an actual purchase of U.S. Dollars been
made with the amount so received in that other currency on the date of receipt
or recovery (or, if a purchase of U.S. Dollars on such date had not been
practicable, on the first date on which it would have been practicable, it being
required that the need for a change of date be certified in the manner mentioned
above). The indemnities set forth in this Section 13.13 constitute separate and
independent obligations from other obligations of the Company and the
Guarantors, shall give rise to a separate and independent cause of action, shall
apply irrespective of any indulgence granted by any Holder of the Notes and
shall continue in full force and effect despite any other judgment, order, claim
or proof for a liquidated amount in respect of any sum due under the Notes.
(b) The Company and the Guarantors, jointly and severally, covenant and
agree that the following provisions shall apply to conversion of currency in the
case of the Notes, the Guarantees and this Indenture:
(1) (A) If for the purpose of obtaining judgment in, or enforcing the
judgment of, any court in any country, it becomes necessary to convert into a
currency (the "Judgment Currency") an amount due in any other currency (the
"Base Currency"), then the conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which the judgment is given or
the order of enforcement is made, as the case may be (unless a court shall
otherwise determine).
(B) If there is a change in the rate of exchange prevailing between
the Business Day before the day on which the judgment is given or an order
of enforcement is made, as the case may be (or such other date as a court
shall determine), and the date of receipt of the amount due, the Company
and the Guarantors will pay such additional (or, as the case may be, such
lesser) amount, if any, as may be necessary so that the amount paid in the
Judgment Currency when converted at the rate of exchange prevailing on the
date of receipt will produce the amount in the Base Currency originally
due.
(2) In the event of the winding-up of the Company or any Guarantor at any
time while any amount or damages owing under the Notes, the Guarantees and this
Indenture, or any judgment or order rendered in respect thereof, shall remain
outstanding, the Company and the Guarantors shall indemnify and hold the Holders
and the Trustee harmless against any deficiency arising or resulting from any
variation in rates of exchange between (i) the date as of which the Applicable
Currency Equivalent of the amount due or contingently due under the Notes, the
Guarantees and this Indenture (other than under this subsection (b)(2)) is
calculated for the purposes of such winding-up and (ii) the final date for the
filing of proofs of claim in such winding-up. For the purpose of this subsection
(b)(2), the final date for the filing of proofs of claim in the winding-up of
the Company or any Guarantor shall be the date fixed by the liquidator or
otherwise in accordance with the relevant provisions of applicable law as being
the latest practicable date as at which liabilities of the Company or such
Guarantor may be ascertained for such winding-up prior to payment by the
liquidator or otherwise in respect thereto.
(c) The obligations contained in subsections (a), (b)(1)(B) and (b)(2) of
this Section 13.13 shall constitute separate and independent obligations from
the other obligations of the Company and the Guarantors under this Indenture,
shall give rise to separate and independent causes of action against the Company
and the Guarantors, shall apply irrespective of any waiver or extension granted
by any Holder or the Trustee or either of them from time to time and shall
continue in full force and effect notwithstanding any judgment or order or the
filing of any proof of claim in the winding-up of the Company or any Guarantor
for a liquidated sum in respect of amounts due hereunder (other than under
subsection (b)(2) above) or under any such judgment or order. Any such
deficiency as aforesaid shall be deemed to constitute a loss suffered by the
Holders or the Trustee, as the case may be, and no proof or evidence of any
actual loss shall be required by the Company or any Guarantor or the liquidator
or otherwise or any of them. In the case of subsection (b)(2) above, the amount
of such deficiency shall not be deemed to be reduced by any variation in rates
of exchange occurring between the said final date and the date of any
liquidating distribution.
(d) The term "rate(s) of exchange" shall mean the rate of exchange quoted
by Reuters at 10:00 a.m. (New York time) for spot purchases of the Base Currency
with the Judgment
Currency other than the Base Currency referred to in subsections (b)(1) and
(b)(2) above and includes any premiums and costs of exchange payable.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
SPHERIS INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Chief Compliance Officer and
General Counsel
---------------------------------
HEALTHSCRIBE, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
HEALTHSCRIBE-SCRIBES ACQUISITION CORP
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
SPHERIS OPERATIONS INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Secretary
---------------------------------
SPHERIS CANADA INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Secretary
---------------------------------
SPHERIS LEASING LLC
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Secretary
---------------------------------
EDIX CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Secretary
---------------------------------
THE BANK OF NEW YORK,
as Trustee,
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL NOTES,
ADDITIONAL NOTES AND EXCHANGE NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Definitive Note" means a certificated Initial Note or Exchange Note
(bearing the Restricted Notes Legend if the transfer of such Note is restricted
by applicable law) that does not include the Global Notes Legend.
"Depository" means, respect to the Notes, The Depository Trust Company, its
nominees and their respective successors.
"Global Notes Legend" means the legend set forth under that caption in the
applicable Exhibit to this Indenture.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means (1) with respect to the Initial Notes issued on
the Issue Date, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and UBS Securities LLC (in the case
of the Initial Notes) and (2) with respect to each issuance of Additional Notes,
the Persons purchasing or underwriting such Additional Notes under the related
Purchase Agreement.
"Purchase Agreement" means with (1) respect to the Initial Notes issued on
the Issue Date, the Purchase Agreement dated December 17, 2004, among the
Company and the Initial Purchasers, and (2) with respect to each issuance of
Additional Notes, the purchase agreement or underwriting agreement among the
Company and the Persons purchasing or underwriting such Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant to a
Registration Rights Agreement, to certain Holders of Initial Notes, to issue and
deliver to such Holders, in exchange for the Initial Notes, a like aggregate
principal amount of Exchange Notes registered under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the Initial Notes
issued on the Issue Date, the Registration Rights Agreement dated December 22,
2004, among the Company, the Guarantors and the Initial Purchasers, and (2) with
respect to each issuance of Additional Notes issued in a transaction exempt from
the registration requirements of the Securities Act, the
registration rights agreement, if any, among the Company, the Guarantors and the
Persons purchasing such Additional Notes under the related Purchase Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Notes" means all Initial Notes offered and sold outside the
United States in reliance on Regulation S.
"Restricted Period", with respect to any Notes, means the period of 40
consecutive days beginning on and including the later of (a) the day on which
such Notes are first offered to persons other than distributors (as defined in
Regulation S under the Securities Act) in reliance on Regulation S, notice of
which day shall be promptly given by the Company to the Trustee, and (b) the
Issue Date, and with respect to any Additional Notes that are Transfer
Restricted Notes, it means the comparable period of 40 consecutive days.
"Restricted Notes Legend" means the legend set forth in Section 2.2(f)(i)
herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Notes" means all Initial Notes offered and sold to QIBs in
reliance on Rule 144A.
"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Notes" means the Initial Notes and the Exchange Notes treated as a single
class.
"Securities Custodian" means the custodian with respect to a Global Note
(as appointed by the Depository), or any successor Person thereto and shall
initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued by
the Company in connection with the offer and sale of Initial Notes pursuant to a
Registration Rights Agreement.
"Transfer Restricted Notes" means Definitive Notes and any other Notes that
bear or are required to bear or are subject to the Restricted Notes Legend.
"Unrestricted Definitive Note" means Definitive Notes and any other Notes
that are not required to bear, or are not subject to, the Restricted Notes
Legend.
1.2 Other Definitions
Term: Defined in Section:
----- -------------------
"Agent Members" 2.1(b)
"Global Notes" 2.1(b)
"Regulation S Global Notes" 2.1(b)
-2-
Term: Defined in Section:
----- -------------------
"Rule 144A Global Notes" 2.1(b)
2. The Notes.
2.1 Form and Dating; Global Notes. (a) The Initial Notes issued on the date
hereof will be (i) offered and sold by the Company pursuant to the Purchase
Agreement and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A
and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance
on Regulation S. Such Initial Notes may thereafter be transferred to, among
others, QIBs, purchasers in reliance on Regulation S and, except as set forth
below, IAIs in accordance with Rule 501. Additional Notes offered after the date
hereof may be offered and sold by the Company from time to time pursuant to one
or more Purchase Agreements in accordance with applicable law.
(b) Global Notes. (i) Rule 144A Notes initially shall be represented
by one or more Notes in definitive, fully registered, global form without
interest coupons (collectively, the "Rule 144A Global Notes"). Regulation S
Notes shall be represented by one or more Notes in fully registered, global form
without interest coupons (collectively, the "Regulation S Global Notes"). The
term "Global Notes" means the Rule 144A Global Notes and the Regulation S Global
Notes. The term "Global Notes" means, collectively, the Rule 144A Global Notes
and the Regulation S Global Notes. The Global Notes shall bear the Global Note
Legend. The Global Notes initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, in each case for credit to an
account of an Agent Member, (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear the Restricted Notes Legend.
Members of, or direct or indirect participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depository or the Common Depository, or the
Trustee as its custodian, or under the Global Notes. The Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of the Global Notes for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or the Common Depository, as the case may be, or impair, as between the
Depository and their respective Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Note.
(ii) Transfers of Global Notes shall be limited to transfer in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Definitive Notes only in accordance with the applicable rules and
procedures of the Depository, and the provisions of Section 2.2. In addition, a
Global Note shall be exchangeable for Definitive Notes if in the case of a
Global Note, (i) the Depository (x) notifies the Company that it is unwilling or
unable to continue as depository for such Global Note and the Company thereupon
fails to appoint a successor depository or (y) has ceased to be a clearing
agency registered under the Exchange Act, or (ii) there shall have occurred and
be continuing an Event of Default with respect to such Global Note. In all
cases, Definitive Notes delivered in exchange for any Global Note or beneficial
interests therein shall be registered in the names, and issued in any approved
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denominations, requested by or on behalf of the Depository or the Common
Depository, as applicable, in accordance with its customary procedures.
(iii) In connection with the transfer of a Global Note as an entirety
to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such
Global Note shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and make
available for delivery, to each beneficial owner identified by the Depository in
writing in exchange for its beneficial interest in such Global Note, an equal
aggregate principal amount of Definitive Notes of authorized denominations.
(iv) Any Transfer Restricted Note delivered in exchange for an
interest in a Global Note pursuant to Section 2.2 shall, except as otherwise
provided in Section 2.2, bear the Restricted Notes Legend.
(v) Notwithstanding the foregoing, through the Restricted Period, a
beneficial interest in such Regulation S Global Note may be held only through
Euroclear or Clearstream unless delivery is made in accordance with the
applicable provisions of Section 2.2.
(vi) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
2.2 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except as set forth in Section 2.1(b). Global Notes will
not be exchanged by the Company for Definitive Notes except under the
circumstances described in Section in Section 2.1(b)(ii). Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 of this Indenture. Beneficial interests in a Global Note may be transferred
and exchanged as provided in Section 2.2(b) or 2.2(g).
(b) Transfer and Exchange of Beneficial Interests in Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depository, in accordance with the provisions of this
Indenture and the applicable rules and procedures of the Depository. Beneficial
interests in Restricted Global Notes shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Beneficial interests in Global Notes shall be transferred or
exchanged only for beneficial interests in Global Notes. Transfers and exchanges
of beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Restricted Notes Legend; provided, however, that prior to the expiration of
the Restricted Period, transfers of beneficial interests in a Regulation S
Global Note may not be made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). A beneficial interest in an
Unrestricted Global Note may be transferred to
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Persons who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be required to
be delivered to the Registrar to effect the transfers described in this Section
2.2(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests in any Global Note that is not subject to Section 2.2(b)(i), the
transferor of such beneficial interest must deliver to the Registrar (1) a
written order from an Agent Member given to the Depository in accordance with
the applicable rules and procedures of the Depository directing the Depository
to credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given in accordance with the applicable rules and procedures of
the Depository containing information regarding the Agent Member account to be
credited with such increase. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Note pursuant
to Section 2.2(g).
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in a Transfer Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Transfer Restricted Global Note, if the transfer complies
with the requirements of Section 2.2(b)(ii) above and the Registrar receives the
following:
(A) if the transferee will take delivery in the form of a
beneficial interest in a Rule 144A Global Note, then the transferor
must deliver a certificate in the form attached to the applicable
Note; and
(B) if the transferee will take delivery in the form of a
beneficial interest in a Regulation S Global Note, then the transferor
must deliver a certificate in the form attached to the applicable
Note.
(iv) Transfer and Exchange of Beneficial Interests in a Transfer
Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.
A beneficial interest in a Transfer Restricted Global Note may be exchanged by
any holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note, if the exchange or transfer complies
with the requirements of Section 2.2(b)(ii) above and the Registrar receives the
following:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form attached to the applicable Note; or
(B) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the
form attached to the applicable Note,
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and, in each such case, if the Registrar so requests or if the applicable
rules and procedures of the Depository, so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Restricted Notes
Legend are no longer required in order to maintain compliance with the
Securities Act. If any such transfer or exchange is effected pursuant to
this subparagraph (iv) at a time when an Unrestricted Global Note has not
yet been issued, the Company shall issue and, upon receipt of an written
order of the Company in the form of an Officers' Certificate in accordance
with Section 2.02, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate
principal amount of beneficial interests transferred or exchanged pursuant
to this subparagraph (iv).
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted
Global Note for Beneficial Interests in a Restricted Global Note. Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or transferred
to Persons who take delivery thereof in the form of, a beneficial interest in a
Restricted Global Note.
(c) Transfer and Exchange of Beneficial Interests in Global Notes for
Definitive Notes. A beneficial interest in a Global Note may not be exchanged
for a Definitive Note except under the circumstances described in Section
2.1(b)(ii). A beneficial interest in a Global Note may not be transferred to a
Person who takes delivery thereof in the form of a Definitive Note except under
the circumstances described in Section 2.1(b)(ii). In any case, beneficial
interests in Global Notes shall be transferred or exchanged only for Definitive
Notes.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests
in Global Notes. Definitive Notes shall be transferred or exchanged only for
beneficial interests in Global Notes. Transfers and exchanges of beneficial
interests in the Global Notes also shall require compliance with either
subparagraph (i), (ii) or (ii) below, as applicable:
(i) Transfer Restricted Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Transfer Restricted Note proposes to exchange
such Transfer Restricted Note for a beneficial interest in a Restricted Global
Note or to transfer such Transfer Restricted Note to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Transfer Restricted Note proposes to
exchange such Transfer Restricted Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form
attached to the applicable Note;
(B) if such Transfer Restricted Note is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certificate from such Holder in the form attached to
the applicable Note;
(C) if such Transfer Restricted Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under
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the Securities Act, a certificate from such Holder in the form
attached to the applicable Note;
(D) if such Transfer Restricted Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate from such Holder in the form attached to the applicable
Note;
(E) if such Transfer Restricted Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate from such
Holder in the form attached to the applicable Note, including the
certifications, certificates and Opinion of Counsel, if applicable; or
(F) if such Transfer Restricted Note is being transferred to the
Company or a Subsidiary thereof, a certificate from such Holder in the
form attached to the applicable Note;
the Trustee shall cancel the Transfer Restricted Note, and increase or
cause to be increased the aggregate principal amount of the appropriate
Restricted Global Note.
(ii) Transfer Restricted Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Transfer Restricted Note may exchange such Transfer
Restricted Definitive Note for a beneficial interest in an Unrestricted Global
Note or transfer such Transfer Restricted Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note only
if the Registrar receives the following:
(A) if the Holder of such Transfer Restricted Note proposes to
exchange such Transfer Restricted Note for a beneficial interest in an
Unrestricted Global Note, a certificate from such Holder in the form
attached to the applicable Note; or
(B) if the Holder of such Transfer Restricted Notes proposes to
transfer such Transfer Restricted Note to a Person who shall take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such Holder in the form
attached to the applicable Note,
and, in each such case, if the Registrar so requests or if the applicable
rules and procedures of the Depository so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Restricted Notes
Legend are no longer required in order to maintain compliance with the
Securities Act. Upon satisfaction of the conditions of this subparagraph
(ii), the Trustee shall cancel the Transfer Restricted Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note. If any such transfer or exchange is effected pursuant to this
subparagraph (ii) at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
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written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the aggregate principal amount of
Transfer Restricted Notes transferred or exchanged pursuant to this
subparagraph (ii).
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Unrestricted Definitive Note for a beneficial interest in an
Unrestricted Global Note or transfer such Unrestricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate principal
amount of one of the Unrestricted Global Notes. If any such transfer or exchange
is effected pursuant to this subparagraph (iii) at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and, upon receipt
of an written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of Unrestricted
Definitive Notes transferred or exchanged pursuant to this subparagraph (iii).
(iv) Unrestricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. An Unrestricted Definitive Note cannot be exchanged
for, or transferred to a Person who takes delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.2(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Definitive Notes shall be transferred or
exchanged only for Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.2(e).
(i) Transfer Restricted Notes to Transfer Restricted Notes. A Transfer
Restricted Note may be transferred to and registered in the name of a Person who
takes delivery thereof in the form of a Transfer Restricted Note if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form attached to the applicable Note;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904
under the Securities Act, then the transferor must deliver a
certificate in the form attached to the applicable Note;
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(C) if the transfer will be made pursuant to an exemption from
the registration requirements of the Securities Act in accordance with
Rule 144 under the Securities Act, a certificate in the form attached
to the applicable Note;
(D) if the transfer will be made to an IAI in reliance on an
exemption from the registration requirements of the Securities Act
other than those listed in subparagraphs (A) through (D) above, a
certificate in the form attached to the applicable Note; and
(E) if such transfer will be made to the Company or a Subsidiary
thereof, a certificate in the form attached to the applicable Note.
(ii) Transfer Restricted Notes to Unrestricted Definitive Notes. Any
Transfer Restricted Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note if the Registrar receives
the following:
(1) if the Holder of such Transfer Restricted Note proposes to
exchange such Transfer Restricted Note for an Unrestricted Definitive
Note, a certificate from such Holder in the form attached to the
applicable Note; or
(2) if the Holder of such Transfer Restricted Note proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such
Holder in the form attached to the applicable Note,
and, in each such case, if the Registrar so requests, an Opinion of Counsel
in form reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Restricted Notes
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of an Unrestricted Definitive Note may transfer such Unrestricted
Definitive Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note at any time. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof.
(iv) Unrestricted Definitive Notes to Transfer Restricted Notes. An
Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person
who takes delivery thereof in the form of, a Transfer Restricted Note.
At such time as all beneficial interests in a particular Global Note have
been exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Note shall be returned to or retained and canceled by the Trustee in accordance
with Section 2.11. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Note or for Definitive Notes, the
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principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depository or the Common Depository, as applicable, at the direction
of the Trustee to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depository or the Common Depository, as
applicable, at the direction of the Trustee to reflect such increase.
(f) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Note certificate evidencing the Global Notes and the Definitive Notes
(and all Notes issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form (each defined term in the
legend being defined as such for purposes of the legend only):
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE
HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND
ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS [IN THE CASE OF RULE 144A NOTES: TWO
YEARS] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF
SUCH NOTE), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS
-10-
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE."
Each Definitive Note shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Note that is a
Definitive Note, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Note for a Definitive Note that does not bear the legends
set forth above and rescind any restriction on the transfer of such Transfer
Restricted Note if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Note).
(iii) After a transfer of any Initial Notes during the period of the
effectiveness of a Shelf Registration Statement with respect to such Initial
Notes, all requirements pertaining to the Restricted Notes Legend on such
Initial Notes shall cease to apply and the requirements that any such Initial
Notes be issued in global form shall continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Notes pursuant to which Holders of such Initial Notes are offered
Exchange Notes in exchange for their Initial Notes, all requirements pertaining
to Initial Notes that Initial Notes be issued in global form shall continue to
apply, and Exchange Notes in global form without the Restricted Notes Legend
shall be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.
(v) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Note acquired pursuant to Regulation S, all requirements
that such Initial Note bear the
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Restricted Notes Legend shall cease to apply and the requirements requiring any
such Initial Note be issued in global form shall continue to apply.
(vi) Any Additional Notes sold in a registered offering shall not be
required to bear the Restricted Notes Legend.
(g) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 of this
Indenture. At any time prior to such cancellation, if any beneficial interest in
a Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly; and if the beneficial interest is being exchanged
for or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly.
(h) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Notes and Global
Notes at the Registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchanges pursuant to Sections 3.03, 4.10, 4.15
and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Note, the Company, the Trustee, a Paying Agent or the Registrar may deem and
treat the person in whose name a Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and interest on
such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and none of the Company, the Trustee, a Paying Agent or the Registrar
shall be affected by notice to the contrary.
(iv) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Notes surrendered upon such
transfer or exchange.
(i) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Note, a member of, or a participant in the
Depository or any other Person with respect to the accuracy of the records of
the Depository or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Notes or with respect to the delivery
to any participant, member, beneficial owner or other Person (other than the
Depository)
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of any notice (including any notice of redemption or repurchase) or the payment
of any amount, under or with respect to such Notes. All notices and
communications to be given to the Holders and all payments to be made to the
Holders under the Notes shall be given or made only to the registered Holders
(which shall be the Depository or its nominee in the case of a Global Note). The
rights of beneficial owners in any Global Note shall be exercised only through
the Depository subject to the applicable rules and procedures of the Depository.
The Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Note (including any transfers between or among Depository
participants, members or beneficial owners in any Global Note) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
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EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS NOTE, BY
ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") THAT IS [IN THE CASE OF RULE 144A NOTES: TWO YEARS] [IN THE CASE OF
REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE
OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF
$250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Note shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
A-2
[FORM OF INITIAL NOTE]
No. ________________ $__________
11% Senior Subordinated Note due 2012
CUSIP No. [144A: ________]/[REG S: _______]/[IAI: _______]
ISIN No. [144A: ________]/[REG S: _______]/[IAI: _______]
SPHERIS INC., a Delaware corporation, promises to pay to CEDE & CO.,
or registered assigns, the principal sum [of __________ Dollars] on December 15,
2012.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
SPHERIS INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated: ________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is
one of the Notes
referred to in the Indenture.
By:
---------------------------------
Authorized Signatory
*/ If the Note is to be issued in global form, add the Global Notes Legend.
A-3
[FORM OF REVERSE SIDE OF INITIAL NOTE]
11% Senior Subordinated Note due 2012
1. Interest
(a) SPHERIS INC., a Delaware corporation (the "Company"), promises to
pay interest on the principal amount of this Note at the rate per annum shown
above. The Company shall pay interest semiannually on June 15 and December 15 of
each year, commencing June 15, 2005. Interest on the Notes shall accrue from the
most recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from December 22, 2004 until the
principal hereof is due. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Registration Rights Agreement. The Holder of this Note is entitled
to the benefits of a Registration Rights Agreement, dated as of December 22,
2004, among the Company, the Guarantors and the Initial Purchasers.
2. Method of Payment
The Company shall pay interest on the Notes (except defaulted
interest) and Additional Interest, if any, to the Persons who are registered
Holders at the close of business on June 1 and December 1 next preceding the
interest payment date even if Notes are canceled after the record date and on or
before the interest payment date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal, premium, if any,
and interest in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts. Payments in
respect of the Notes represented by a Global Note (including principal, premium,
if any, interest and Additional Interest, if any) shall be made by wire transfer
of immediately available funds to the accounts specified by The Depository Trust
Company or any successor depositary. The Company will make all payments in
respect of a certificated Note (including principal, premium, if any, interest
and Additional Interest, if any), at the office of each Paying Agent, except
that, at the option of the Company, payment of interest and Additional Interest,
if any, may be made by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Notes may also be made, in the
case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by
wire transfer to an account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or a Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation (as
Trustee under the Indenture, the "Trustee"), will act as Paying Agent and
Registrar. The Company may
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appoint and change any Paying Agent or Registrar without notice. The Company or
any of its domestically incorporated Wholly-Owned Subsidiaries may act as Paying
Agent or Registrar.
4. Indenture
The Company issued the Notes under an Indenture dated as of December
22, 2004 (the "Indenture"), among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all terms and provisions of
the Indenture, and the Holders (as defined in the Indenture) are referred to the
Indenture and the TIA for a statement of such terms and provisions.
The Notes are senior subordinated unsecured obligations of the
Company. This Note is one of the Initial Notes referred to in the Indenture. The
Notes include the Initial Notes and any Exchange Notes issued in exchange for
Initial Notes pursuant to the Indenture. The Initial Notes and any Exchange
Notes are treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on the ability of the Company and its
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, sell or otherwise dispose of assets including capital stock, enter
into or permit certain transactions with Affiliates, create or incur Liens and
engage in other business activities. The Indenture also imposes limitations on
the ability of the Company and each Guarantor to consolidate or merge with or
into any other Person or convey, transfer or lease all or substantially all of
its property.
To guarantee the due and punctual payment of the principal of, if any,
or interest on in respect of the Notes and all other amounts payable by the
Company under the Indenture and the Notes when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, each of the Guarantors have, jointly and
severally, unconditionally and irrevocably guaranteed the Guaranteed Obligations
on a senior subordinated basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the following paragraphs, the Notes shall not
be redeemable at the Company's option prior to December 15, 2008. Thereafter,
the Notes shall 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 principal amount
thereof) set forth below plus accrued and unpaid interest to the applicable
redemption date, if redeemed during the twelve month period commencing on
December 15 of the year set forth below:
A-5
YEAR REDEMPTION PRICE
---- ----------------
2008 105.500%
2009 102.750%
2010 and thereafter 100.000%
In addition, prior to December 15, 2008, the Company may redeem the
Notes at its option, in whole at any time or in part from time to time, upon not
less than 30 nor more than 60 days' prior notice mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
principal amount of the Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest to, the applicable redemption date (subject to the
right of the Holders of record on the relevant record date to receive interest
due on the relevant interest payment date).
Notwithstanding the foregoing, prior to December 15, 2007, the Company
may at its option on one or more occasions redeem the Notes (which includes
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of the Notes (which includes Additional Notes, if
any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 111% plus accrued and unpaid interest to the redemption
date, with the net cash proceeds from one or more Equity Offerings; provided,
however, that (i) at least 65% of such aggregate principal amount of Notes
(which includes Additional Notes, if any) remains outstanding immediately after
the occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (ii) each such redemption
occurs within 60 days after the date of the related Equity Offering.
6. Sinking Fund
The Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at his, her or its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on
the redemption date is deposited with a Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date,
interest ceases to accrue on such Notes (or such portions thereof) called for
redemption.
8. Repurchase of Notes at the Option of the Holders upon Change of Control and
Asset Sales
If a Change of Control occurs, each Holder shall have the right,
subject to certain conditions specified in the Indenture, to require the Company
to repurchase all or a portion of such Holder's Notes at a purchase price equal
to 101% of the principal amount thereof plus accrued interest to the date of
repurchase (subject to the right of the Holders of record on the
A-6
relevant record date to receive interest due on the relevant interest payment
date), as provided in, and subject to the terms of, the Indenture.
In accordance with Section 4.10 of the Indenture, the Company will be
required to offer to purchase Notes upon the occurrence of certain events.
9. Subordination
The Notes and Guarantees are subordinated to Senior Debt, as defined
in the Indenture. To the extent provided in the Indenture, Senior Debt must be
paid before the Notes and Guarantees may be paid. The Company and each Guarantor
agree, and each Holder by accepting a Note agrees, to the subordination
provisions contained in the Indenture and authorize the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder shall register the transfer of
or exchange of Notes in accordance with the Indenture. Upon any registration of
transfer or exchange, the Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange any Notes selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part. The Company shall not be required (i) to issue, to register the transfer
of or to exchange any Notes during a period beginning at the opening of business
15 days before the day of the mailing of notice of redemption and ending at the
close of business on such day, (ii) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (iii) to register the transfer of
or to exchange a Note between a record date and the next succeeding Interest
Payment Date.
11. Persons Deemed Owners
The registered Holder of this Note shall be treated as the owner of it
for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and a Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, the Holders entitled to the money must
look to the Company for payment as general creditors and the Trustee and a
Paying Agent shall have no further liability with respect to such monies.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Notes and the Indenture if the Company
deposits with the Trustee cash or non-callable Government Obligations, or a
combination of cash and non-callable
A-7
Government Obligations, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of public accountant, to pay the principal amount
at maturity of, premium, if any, and interest on the Notes on the stated date
for payment thereof or on the applicable redemption date, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Guarantees or the Notes may be amended with the written consent
of the Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class and (ii) any past default or compliance
with any provisions of the Indenture, the Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes voting as a single class; provided, however, that if any
amendment, waiver or other modification will only affect the Notes, only the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes (and not the consent of the majority of all Notes) shall be
required. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company, the Guarantors and the Trustee may amend the
Indenture, the Guarantees or the Notes (i) to cure any ambiguity, omission,
defect or inconsistency; (ii) to provide for uncertificated Notes in addition to
or in place of certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code) or to alter the provisions of Article 2 of the Indenture or the
Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not adversely affect any Holder; (iii) to
provide for the assumption of the Company's or a Guarantor's obligations to
Holders of the Notes by a successor to the Company or a Guarantor in case of a
merger or consolidation; (iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder; (v) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; (vi) to provide
for the issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in the Indenture; (vii) to release any Guarantor from its
Guarantee in accordance with the Indenture; (viii) or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes; or (ix) make any change in Article 10 and Article 12 of
the Indenture that would limit or terminate the benefits available to any holder
of Senior Debt of the Company or a holder of Guarantor Senior Debt (or any
Representative thereof) under such Article 10 and Article 12.
15. Defaults and Remedies
Events of Default include: (i) the failure to pay interest or
Additional Interest, if any, on any Notes when the same becomes due and payable
if the default continues for a period of 30 days (whether or not such payment
shall be prohibited by Article 10 or Article 12 of the Indenture); (ii) the
failure to pay the principal of or premium, if any, on any Notes when such
principal or premium, if any, becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to purchase
Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer on
the date specified for such payment in the applicable offer to purchase)
(whether or not such payment shall be prohibited by Article 10 or
A-8
Article 12 of the Indenture); (iii) a default in the observance or performance
of any other covenant or agreement contained in the Indenture if the default
continues for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes (except in the case of a default with respect to Section 5.01 or
Section 11.06 of the Indenture, which will constitute an Event of Default with
such notice requirement but without such passage of time requirement); (iv) the
failure to pay at final stated maturity (giving effect to any applicable grace
periods and any extensions thereof) the principal amount of any Indebtedness of
the Company or any Significant Subsidiary of the Company (other than a
Securitization Entity) or the acceleration of the maturity of any such
Indebtedness, if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness, whether such
Indebtedness now exists, or is created after the date of the Indenture, in
default for failure to pay principal at final maturity or which has been
accelerated, aggregates $5.0 million or more at any time; (v) one or more
judgments in an aggregate amount in excess of $5.0 million (which are not
covered by insurance or indemnity as to which the insurer or a creditworthy
indemnitor has not disclaimed coverage) shall have been rendered against the
Company or any of its Significant Subsidiaries or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary, and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; (vi) certain events of bankruptcy, insolvency
or reorganization affecting the Company or any of its Significant Subsidiaries
or group of Restricted Subsidiaries that taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary; and (vii) any
Guarantee of a Significant Subsidiary, or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary, ceases to be in full force and effect (except as contemplated by the
terms of the Indenture) or is declared null and void in a judicial proceeding or
any Guarantor that is a Significant Subsidiary or group of Guarantors that taken
together (as of the latest audited consolidated financial statements of the
Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary denies or disaffirms its obligations under the Indenture or its
Guarantee. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable or if there are any amounts
outstanding under the Credit Facility, the Notes shall become immediately due
and payable upon the first to occur of an acceleration under the Credit Facility
and five Business Days after receipt by the Company and the Representative under
the Credit Facility of such Acceleration Notice but only if such Event of
Default is then continuing. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy with respect to the
Company, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest or Additional
Interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of
A-9
the Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest (including Additional Interest, if any) on, or the
principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal the Company or its Affiliates with the
same rights it would have if it were not Trustee.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
18. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
20. CUSIP Numbers and ISINs
The Company has caused CUSIP numbers and ISINs to be printed on the
Notes and has directed the Trustee to use CUSIP numbers and ISINs in notices of
redemption as a convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE.
A-10
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ____________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date: Your Signature:
--------------------- ------------------------
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
Date: -------------------- ----------------------------------------
Signature must be guaranteed by a Signature of Signature Guarantee
participant in a recognized signature
guaranty medallion program or other
signature guarantor program
reasonably acceptable to the Trustee
A-11
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $_________ principal amount of Notes held in (check
applicable space) ____ book-entry or _____ definitive form by the undersigned.
The undersigned (check one box below):
[ ] has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Note or
Notes in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above);
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Notes Act, the undersigned confirms that such Notes are being
transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] to the Registrar for registration in the name of the Holder,
without transfer; or
(3) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(4) [ ] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(5) [ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933 and such Note
shall be held immediately after the transfer through Euroclear or
Clearstream until the expiration of the Restricted Period (as
defined in the Indenture); or
(6) [ ] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements; or
A-12
(7) [ ] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any Person other
than the registered Holder thereof; provided, however, that if box (5), (6)
or (7) is checked, the Trustee may require, prior to registering any such
transfer of the Notes, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of
1933.
Date:
------------------------------- ----------------------------------------
Your Signature
Signature Guarantee:
Date:
------------------------------- ----------------------------------------
Signature must be guaranteed by a Signature of Signature Guarantee
participant in a recognized signature
guaranty medallion program or other
signature guarantor program
reasonably acceptable to the Trustee
A-13
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
------------------------------- ----------------------------------------
NOTICE: To be executed by an executive
officer
A-14
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY THE COMPANY
PURSUANT TO SECTION 4.10 (ASSET SALE) OR 4.15 (CHANGE OF CONTROL) OF THE
INDENTURE, CHECK THE BOX:
ASSET SALE [ ] CHANGE OF CONTROL [ ]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS NOTE PURCHASED BY THE
COMPANY PURSUANT TO SECTION 4.10 (ASSET SALE) OR 4.15 (CHANGE OF CONTROL) OF THE
INDENTURE, STATE THE AMOUNT ($1,000 OR AN INTEGRAL MULTIPLE THEREOF):
$_____________
DATE: YOUR SIGNATURE:
------------------------------- ------------------------
(SIGN EXACTLY AS YOUR
NAME APPEARS ON THE
OTHER SIDE OF THIS NOTE)
SIGNATURE GUARANTEE:
-----------------------------------------------------------
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A RECOGNIZED
SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER SIGNATURE GUARANTOR
PROGRAM REASONABLY ACCEPTABLE TO THE TRUSTEE
A-15
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
No. ________ $__________
11% Senior Subordinated Note due 2012
CUSIP No. [144A: ________]/[REG S: _______]/[IAI: _______]
ISIN No. [144A: ________]/[REG S: _______]/[IAI: _______]
SPHERIS INC., a Delaware corporation, promises to pay to CEDE & CO.,
or registered assigns, the principal sum [of ______________ Dollars] on December
15, 2012.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
SPHERIS INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated: __________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is
one of the Notes
referred to in the Indenture.
By:
---------------------------------
Authorized Signatory
*/ If the Note is to be issued in global form, add the Global Notes Legend.
B-2
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
11% Senior Subordinated Note due 2012
1. Interest
SPHERIS INC., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company), promises to pay interest on the principal amount of this
Note at the rate per annum shown above. The Company shall pay interest
semiannually on June 15 and December 15 of each year, commencing [________].
Interest on the Notes shall accrue from the most recent date to which interest
has been paid or duly provided for or, if no interest has been paid or duly
provided for, from December 22, 2004 until the principal hereof is due. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by the Notes,
and it shall pay interest on overdue installments of interest at the same rate
to the extent lawful.
2. Method of Payment
The Company shall pay interest on the Notes (except defaulted
interest) and Additional Interest, if any, to the Persons who are registered
Holders at the close of business on June 1 and December 1 next preceding the
interest payment date even if Notes are canceled after the record date and on or
before the interest payment date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal, premium, if any,
and interest in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts. Payments in
respect of the Notes represented by a Global Note (including principal, premium,
if any, interest and Additional Interest, if any) shall be made by wire transfer
of immediately available funds to the accounts specified by The Depository Trust
Company or any successor depositary. The Company will make all payments in
respect of a certificated Note (including principal, premium, if any, interest
and Additional Interest, if any), at the office of each Paying Agent, except
that, at the option of the Company, payment of interest and Additional Interest,
if any, may be made by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Notes may also be made, in the
case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or a Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation (as
Trustee under the Indenture, the "Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent or Registrar
without notice. The Company or any of its domestically incorporated Wholly-Owned
Subsidiaries may act as Paying Agent or Registrar.
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4. Indenture
The Company issued the Notes under an Indenture dated as of December
22, 2004 (the "Indenture"), among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all terms and provisions of
the Indenture, and the Holders (as defined in the Indenture) are referred to the
Indenture and the TIA for a statement of such terms and provisions.
The Notes are senior subordinated unsecured obligations of the
Company. This Note is one of the Exchange Notes referred to in the Indenture.
The Notes include the Initial Notes and any Exchange Notes issued in exchange
for Initial Notes pursuant to the Indenture. The Initial Notes and any Exchange
Notes are treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on the ability of the Company and its
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, sell or otherwise dispose of assets including capital stock, enter
into or permit certain transactions with Affiliates, create or incur Liens and
engage in other business activities. The Indenture also imposes limitations on
the ability of the Company and each Guarantor to consolidate or merge with or
into any other Person or convey, transfer or lease all or substantially all of
its property.
To guarantee the due and punctual payment of the principal of, if any,
or interest on in respect of the Notes and all other amounts payable by the
Company under the Indenture and the Notes when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, each of the Guarantors have, jointly and
severally, unconditionally and irrevocably guaranteed the Guaranteed Obligations
on a senior subordinated basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the following paragraphs, the Notes shall not
be redeemable at the Company's option prior to December 15, 2008. Thereafter,
the Notes shall 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 principal amount
thereof) set forth below plus accrued and unpaid interest to the applicable
redemption date, if redeemed during the twelve month period commencing on
December 15 of the year set forth below:
YEAR REDEMPTION PRICE
---- ----------------
2008 105.500%
2009 102.750%
2010 and thereafter 100.000%
B-4
In addition, prior to December 15, 2008, the Company may redeem the
Notes at its option, in whole at any time or in part from time to time, upon not
less than 30 nor more than 60 days' prior notice mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
principal amount of the Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest to, the applicable redemption date (subject to the
right of the Holders of record on the relevant record date to receive interest
due on the relevant interest payment date).
Notwithstanding the foregoing, prior to December 15, 2007, the Company
may at its option on one or more occasions redeem the Notes (which includes
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of the Notes (which includes Additional Notes, if
any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 111% plus accrued and unpaid interest to the redemption
date, with the net cash proceeds from one or more Equity Offerings; provided,
however, that (i) at least 65% of such aggregate principal amount of Notes
(which includes Additional Notes, if any) remains outstanding immediately after
the occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (ii) each such redemption
occurs within 60 days after the date of the related Equity Offering.
6. Sinking Fund
The Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at his, her or its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on
the redemption date is deposited with a Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date,
interest ceases to accrue on such Notes (or such portions thereof) called for
redemption.
8. Repurchase of Notes at the Option of the Holders upon Change of Control and
Asset Sales
If a Change of Control occurs, each Holder shall have the right,
subject to certain conditions specified in the Indenture, to require the Company
to repurchase all or a portion of such Holder's Notes at a purchase price equal
to 101% of the principal amount thereof plus accrued interest to the date of
repurchase (subject to the right of the Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), as provided
in, and subject to the terms of, the Indenture.
In accordance with Section 4.10 of the Indenture, the Company will be
required to offer to purchase Notes upon the occurrence of certain events.
B-5
9. Subordination
The Notes and Guarantees are subordinated to Senior Debt, as defined
in the Indenture. To the extent provided in the Indenture, Senior Debt must be
paid in cash before the Notes and Guarantees may be paid. The Company and each
Guarantor agree, and each Holder by accepting a Note agrees, to the
subordination provisions contained in the Indenture and authorize the Trustee to
give it effect and appoints the Trustee as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder shall register the transfer of
or exchange of Notes in accordance with the Indenture. Upon any registration of
transfer or exchange, the Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange any Notes selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part. The Company shall not be required (i) to issue, to register the transfer
of or to exchange any Notes during a period beginning at the opening of business
15 days before the day of the mailing of notice of redemption and ending at the
close of business on such day, (ii) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (iii) to register the transfer of
or to exchange a Note between a record date and the next succeeding Interest
Payment Date.
11. Persons Deemed Owners
The registered Holder of this Note shall be treated as the owner of it
for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and a Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, the Holders entitled to the money must
look to the Company for payment as general creditors and the Trustee and a
Paying Agent shall have no further liability with respect to such monies.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Notes and the Indenture if the Company
deposits with the Trustee cash or non-callable Government Obligations, or a
combination of cash and non-callable Government Obligations, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of public
accountant, to pay the principal amount at maturity of, premium, if any, and
interest on the Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be.
B-6
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Guarantees or the Notes may be amended with the written consent
of the Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class and (ii) any past default or compliance
with any provisions of the Indenture, the Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes voting as a single class; provided, however, that if any
amendment, waiver or other modification will only affect the Notes, only the
consent of the Holders of at least a majority in principal amount of the then
outstanding r Notes (and not the consent of the majority of all Notes) shall be
required. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company, the Guarantors and the Trustee may amend the
Indenture, the Guarantees or the Notes (i) to cure any ambiguity, omission,
defect or inconsistency; (ii) to provide for uncertificated Notes in addition to
or in place of certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code) or to alter the provisions of Article 2 of the Indenture or the
Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not adversely affect any Holder; (iii) to
provide for the assumption of the Company's or a Guarantor's obligations to
Holders of the Notes by a successor to the Company or a Guarantor in case of a
merger or consolidation; (iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder; (v) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; (vi) to provide
for the issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in the Indenture; (vii) to release any Guarantor from its
Guarantee in accordance with the Indenture; (viii) or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes; or (ix) make any change in Article 10 and Article 12 of
the Indenture that would limit or terminate the benefits available to any holder
of Senior Debt of the Company or a holder of Guarantor Senior Debt (or any
Representative thereof) under such Article 10 and Article 12.
15. Defaults and Remedies
Events of Default include: (i) the failure to pay interest or
Additional Interest, if any, on any Notes when the same becomes due and payable
if the default continues for a period of 30 days (whether or not such payment
shall be prohibited by Article 10 or Article 12 of the Indenture); (ii) the
failure to pay the principal of or premium, if any, on any Notes when such
principal or premium, if any, becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to purchase
Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer on
the date specified for such payment in the applicable offer to purchase)
(whether or not such payment shall be prohibited by Article 10 or Article 12 of
the Indenture); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture if the default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes (except
in the case of a default with respect to Section 5.01 or Section 11.06
B-7
of the Indenture, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement); (iv) the failure to
pay at final stated maturity (giving effect to any applicable grace periods and
any extensions thereof) the principal amount of any Indebtedness of the Company
or any Significant Subsidiary of the Company (other than a Securitization
Entity) or the acceleration of the maturity of any such Indebtedness, if the
aggregate principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness, whether such Indebtedness now exists, or
is created after the date of the Indenture, in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $5.0
million or more at any time; (v) one or more judgments in an aggregate amount in
excess of $5.0 million (which are not covered by insurance or indemnity as to
which the insurer or a creditworthy indemnitor has not disclaimed coverage)
shall have been rendered against the Company or any of its Significant
Subsidiaries or group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary, and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days after
such judgment or judgments become final and non-appealable; (vi) certain events
of bankruptcy, insolvency or reorganization affecting the Company or any of its
Significant Subsidiaries or group of Restricted Subsidiaries that taken together
(as of the latest audited consolidated financial statements for the Company and
its Restricted Subsidiaries), would constitute a Significant Subsidiary; and
(vii) any Guarantee of a Significant Subsidiary, or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary, ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or is declared null and
void in a judicial proceeding or any Guarantor that is a Significant Subsidiary
or group of Guarantors that taken together (as of the latest audited
consolidated financial statements of the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary denies or disaffirms its
obligations under the Indenture or its Guarantee. If any Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be due and
payable or if there are any amounts outstanding under the Credit Facility, the
Notes shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Facility and five Business Days after receipt by
the Company and the Representative under the Credit Facility of such
Acceleration Notice but only if such Event of Default is then continuing.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy with respect to the Company, all outstanding Notes
will become due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest or Additional Interest) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest (including
Additional Interest, if any) on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is
B-8
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal the Company or its Affiliates with the
same rights it would have if it were not Trustee.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
18. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
20. CUSIP Numbers and ISINs
The Company has caused CUSIP numbers and ISINs to be printed on the
Notes and has directed the Trustee to use CUSIP numbers and ISINs in notices of
redemption as a convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE.
B-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ______________ agent to transfer this Note on the books
of the Company. The agent may substitute another to act for him.
Date: Your Signature:
----------------------------- ------------------------
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
Date:
------------------------------- ----------------------------------------
Signature must be guaranteed by Signature of Signature Guarantee
a participant in a recognized
signature guaranty medallion
program or other signature
guarantor program reasonably
acceptable to the Trustee
B-10
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY THE COMPANY
PURSUANT TO SECTION 4.10 (ASSET SALE) OR 4.15 (CHANGE OF CONTROL) OF THE
INDENTURE, CHECK THE BOX:
ASSET SALE [ ] CHANGE OF CONTROL [ ]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS NOTE PURCHASED BY THE
COMPANY PURSUANT TO SECTION 4.10 (ASSET SALE) OR 4.15 (CHANGE OF CONTROL) OF THE
INDENTURE, STATE THE AMOUNT ($1,000 OR AN INTEGRAL MULTIPLE THEREOF):
$_______________________________
DATE: YOUR SIGNATURE:
----------------------------- ------------------------
(SIGN EXACTLY AS YOUR
NAME APPEARS ON THE
OTHER SIDE OF THIS NOTE)
SIGNATURE GUARANTEE:
-------------------
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A RECOGNIZED
SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER SIGNATURE GUARANTOR
PROGRAM REASONABLY ACCEPTABLE TO THE TRUSTEE
B-11
EXHIBIT C
Form of
Transferee Letter of Representation
Spheris Inc.
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 21W
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the 11% Senior Subordinated Notes due 2012 (the "Notes") of SPHERIS
INC. (the "Company").
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name: _______________________________
Address: ____________________________
Taxpayer ID Number: _________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We, and any accounts for which we are acting, are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date that is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement that has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act ("Rule 144A"), to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that is purchasing for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000, or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases to
any requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and in compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Notes is proposed to be
made pursuant to clause (e) above prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially in
the form of this letter to the Company and the Trustee, which shall provide,
among other things, that the transferee is an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act and that it is acquiring such Notes for investment purposes and
not for distribution in violation of the Securities Act. Each purchaser
acknowledges that the Company and the Trustee reserve the right prior to the
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the Notes pursuant to clause (d), (e) or (f) above to require the delivery of
an opinion of counsel, certifications or other information satisfactory to the
Company and the Trustee.
Dated:
------------------------------
TRANSFEREE:
----------------------------
By:
------------------------------------
C-2
EXHIBIT D
[FORM OF SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of
[__], among [GUARANTOR] (the "New Guarantor"), a subsidiary of SPHERIS INC., a
Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as trustee under the indenture referred to below (the
"Trustee").
WITNESSETH:
WHEREAS the Company and the existing Guarantors has heretofore
executed and delivered to the Trustee an Indenture (as amended, supplemented or
otherwise modified, the "Indenture") dated as of December 22, 2004, providing
for the issuance of the Company's 11% Senior Subordinated Notes due 2012 (the
"Notes"), initially in the aggregate principal amount of $125,000,000;
WHEREAS Section 11.09 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all the Company's obligations under
the Notes pursuant to a Senior Subordinated Guarantee on the terms and
conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Company and the existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, and the Trustee mutually covenant and agree for the
equal and ratable benefit of the holders of the Notes as follows:
1. Defined Terms. As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recital hereto are used herein as
therein defined, except that the term "Holders" in this Guarantee shall refer to
the term "Holders" as defined in the Indenture and the Trustee acting on behalf
of and for the benefit of such Holders. The words "herein," "hereof" and hereby
and other words of similar import used in this Supplemental Indenture refer to
this Supplemental Indenture as a whole and not to any particular section hereof.
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
and severally with all existing Guarantors (if any), to unconditionally
guarantee the Company's obligations under the Notes on the terms and subject to
the conditions set forth in Articles 11 and 12 of the Indenture and to be bound
by all other applicable provisions of the Indenture and the Notes and to perform
all of the obligations and agreements of a Guarantor under the Indenture.
3. Notices. All notices or other communications to the New Guarantor
shall be given as provided in Section 13.02 of the Indenture.
4. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
7. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR]
By:
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Name:
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Title:
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SPHERIS INC.
By:
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Name:
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Title:
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THE BANK OF NEW YORK, AS TRUSTEE
By:
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Name:
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Title:
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