EXHIBIT 4.1
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TRUST INDENTURE
Dated as of March 31, 1990
Between
RAMSAY HEALTH CARE, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CUMBERLAND MENTAL HEALTH, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
HAVENWYCK HOSPITAL, INC.
and
PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC.
and
THE CITIZENS AND SOUTHERN NATIONAL BANK
and
▇▇▇▇▇ ▇. ▇▇▇▇▇
as Trustees
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TABLE OF CONTENTS
SECTION PAGE
Parties...................................................................... 1
1. INTERPRETATION OF AGREEMENT; DEFINITIONS................................ 4
1.1. Definitions............................................. 19
1.2. Directly or Indirectly.................................. 19
1.3. Accounting Principles................................... 19
2. THE NOTES.......................................................... 19
2.1. The Notes............................................... 20
2.2. Denominations; Execution of Notes:
Certificate of Authentication........................... 21
2.3. Authentication and Delivery............................. 21
2.4. Payment of the Notes.................................... 21
2.5. The Register............................................ 22
2.6. Transfer and Exchanges.................................. 22
2.7. New Notes............................................... 23
2.8. Cancellation of Notes................................... 24
2.9. Trustee as Agent........................................ 24
2.10. Ownership............................................... 25
2.11. Ranking of Notes of Each Class.......................... 25
3. PARTICULAR COVENANTS OF THE OBLIGORS............................... 25
3.1. Warranty of Title....................................... 25
3.2. Payment of Principal, Premium and Interest.............. 25
3.3. Office for Notices...................................... 25
3.4. Note Agreement, Pledge Agreement and Mortgage
Covenants............................................... 26
3.5. Maintenance of Corporate Existence, Rights.............. 26
3.6. Maintenance of Lien; Recording.......................... 26
3.7. Further Assurances; After - Acquired
Property................................................ 27
3.8. Maintenance of Property................................. 28
3.9. Right of Trustee to Perform Covenants, Etc.............. 28
3.10. Obligors to Give Notice of Default...................... 29
3.11. Money for Note Payments to be Held in Trust;
Repayment of Unclaimed Money............................ 29
3.12. Maintenance of Insurance and Licenses................... 30
3.13. Taxes, Claims for Labor and Materials, Compliance
with Laws............................................... 31
3.14. Maintenance, etc........................................ 31
3.15. Nature of Business...................................... 32
3.16. Consolidated Tangible Net Worth......................... 32
3.17. Fixed Charge Coverage................................... 32
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SECTION PAGE
3.18. Limitations on Indebtedness.............................. 32
3.19. Limitation on Liens...................................... 36
3.20. Dividends, Stock Purchases, Consolidated
Investments.............................................. 39
3.21. Mergers, Consolidations and Sales of Assets.............. 41
3.22. Guaranties............................................... 43
3.23. Repurchase of Notes...................................... 44
3.24. Transactions with Affiliates............................. 44
3.25. Investments.............................................. 44
3.26. Termination of Pension Plans............................. 46
3.27. Reports and Rights of Inspection......................... 46
3.28. Amendment and Modification of Credit Agreement
and Other Documents...................................... 49
3.29. Prepayment of Certain Subordinated Funded
Indebtedness............................................. 49
3.30. Environmental Evaluation and Remediation................. 50
3.31. Interest Rate Protection Agreements...................... 50
4. POSSESSION, USE AND RELEASE OF PROPERTY.................................. 50
4.1 Obligors' Right of Possession.............................50
4.2. Release of Mortgaged Property............................ 50
5. PREPAYMENT OF LOANS...................................................... 51
5.1. Prepayments and Manner Thereof........................... 51
5.2. Mandatory Prepayment..................................... 51
5.3. Optional Prepayment in the Event of Casualty or
Condemnation............................................. 52
5.4. Optional Prepayment With Premium......................... 52
5.5. Prepayment on Change in Control.......................... 54
5.6. Notice of Prepayments.................................... 55
5.7. Allocation of Prepayments................................ 56
6. REMEDIES OF THE TRUSTEES AND THE NOTEHOLDERS
6.1. Definition of Event of Default; Acceleration of
Maturity................................................. 56
6.2. Acceleration of Note Obligations......................... 59
6.3. Annulment of Acceleration of Note Obligations............ 61
6.4. Suits for Enforcement; Power of Sale..................... 61
6.5. Remedies Under Mortgages; Foreclosure and Sale of
Mortgaged Property....................................... 62
6.6. Adjournment of Sale...................................... 63
6.7. Trustees May Execute Conveyances and Deliver
Possession; Sale a Bar................................... 63
6.8. Receipt Sufficient Discharge for Purchaser............... 64
6.9. Sale to Accelerate Notes................................. 64
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SECTION PAGE
6.10. Application of Proceeds of Sale.......................... 64
6.11. Purchase of Trust Estate................................. 65
6.12. Trustees Entitled to Appointment of Receiver............. 66
6.13. Trustees May Enforce Rights Without Notes................ 66
6.14. Notice of Event of Default; Waiver....................... 66
6.15. Limitation on Noteholders' Right to ▇▇▇.................. 67
6.16. Remedies Cumulative...................................... 68
6.17. Delay or Omission Not a Waiver........................... 68
6.18. Waiver of Extension, Appraisement, Stay Laws............. 68
6.19. Control of Remedies by Noteholders....................... 69
6.20. Trustees May File Proofs of Claims....................... 69
6.21. Remedies Subject to Provisions of Law.................... 70
7. CONCERNING THE TRUSTEES................................................ 70
7.1. Duties of Trustees...................................... 70
7.2. Trustees' Liability..................................... 71
7.3. No Responsibility of Trustees for Recitals.............. 73
7.4. Compensation and Expenses of Trustees;
Indemnification; Lien Therefor.......................... 73
7.5. Moneys Received by Trustees; Trust Funds -
Segregation............................................. 74
7.6. Trustee May Hold Notes.................................. 74
7.7. Action by Individual Trustee............................ 74
7.8. Resignation of Trustee.................................. 75
7.9. Removal of Trustee...................................... 75
7.10. Appointment of Successor Trustee........................ 75
7.11. Succession of Successor Trustee......................... 76
7.12. Eligibility of Trustee.................................. 76
7.13. Successor Trustee by Merger............................. 76
7.14. Resignation of Individual Trustee....................... 77
7.15. Removal of Individual Trustee........................... 77
7.16. Appointment of Successor to Individual Trustee.......... 77
7.17. Succession of Successor to Individual Trustee........... 78
8. SUPPLEMENTAL INDENTURE; WAIVERS........................................ 78
8.1. Supplemental Indentures Without Noteholders,
Consent................................................. 78
8.2. Waivers and Consent by Noteholders; Supplemental
Indentures With Noteholders' Consent.................... 79
8.3. Solicitation of Noteholders............................. 80
8.4. Opinion of Counsel Conclusive as to Supplemental
Indenture............................................... 81
9. ACTION BY NOTEHOLDER................................................... 81
9.1. Evidence of Action by Noteholders....................... 81
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SECTION PAGE
9.2. Noteholders' Execution of Instruments; Proof of
Holdings........................................... 81
10. SUBORDINATION OF THE SUBORDINATED SECURED NOTES....................... 82
11. TERMINATION OF INDENTURE.............................................. 85
11.1. Termination of Indenture................................ 85
11.2. Trustee's Retention of Moneys Deposited for
Payment of Notes................................... 86
12. MISCELLANEOUS PROVISIONS.............................................. 86
12.1. Indenture for Benefit of Parties Hereto................. 86
12.2. Severability............................................ 86
12.3. Basis of Opinions of Counsel and Certificates........... 87
12.4. Addresses for Notices................................... 87
12.5. Successors and Assigns.................................. 88
12.6. Counterparts; Descriptive Headings...................... 88
12.7. Governing Law........................................... 89
Signatures...................................................................89
ATTACHMENTS TO TRUST INDENTURE:
Exhibit A - Form of Senior Secured Note
Exhibit B - Form of Subordinated Secured Note
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TRUST INDENTURE
TRUST INDENTURE dated as of March 31, 1990 (herein, as the same may be
amended and supplemented from time to time, called the "Indenture") between
RAMSAY HEALTH CARE, INC., a Delaware corporation (the "Company"), BOUNTIFUL
PSYCHIATRIC HOSPITAL, INC., a Utah corporation ("Bountiful Psychiatric"),
CUMBERLAND MENTAL HEALTH, INC., a North Carolina corporation ("Cumberland"),
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION, a North Carolina corporation
("East Carolina Psychiatric"), HAVENWYCK HOSPITAL, INC., a Michigan corporation
("Havenwyck"), MESA PSYCHIATRIC HOSPITAL, INC., an Arizona corporation ("Mesa
Psychiatric"), and PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC., a Virginia
corporation ("Psychiatric Institute"; together with the Company, Bountiful
Psychiatric, Cumberland, East Carolina Psychiatric, Havenwyck and Mesa
Psychiatric collectively being hereinafter referred to as the Obligors"), whose
post office addresses are One Poydras Plaza, 639 Loyola Avenue, Suite 1400, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and The Citizens and Southern National Bank, a
national banking association (the "Trustee"), whose post office address is ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Department and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Individual Trustee"), whose post
office address is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as
Trustees (the "Trustees").
WHEREAS, the Obligors are authorized by law, and deem in necessary
from time to time, to borrow money for their corporate purposes and to secure
such borrowings, and the Obligors have the power and propose to issue their
11.6% Senior Secured Notes due March 31, 2000 in the aggregate principal amount
of $56,500,000 (the "Senior Secured Notes") and their 15.6% Subordinated Secured
Notes due March 31, 2000 in the aggregate principal amount of $3,000,000 (the
"Subordinated Secured Notes") constituting the joint and several obligation of
the Obligors which Senior Secured Notes and Subordinated Secured Notes
(collectively, the "Notes") are to be issued under and secured by this
Indenture; and
WHEREAS, the Obligors require funds to prepay certain indebtedness for
borrowed money of the Obligor (which indebtedness was issued by or guaranteed by
each of the Obligors) and to finance capital expenditures, renovations and
construction of facilities owned by certain of the Obligors; and
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WHEREAS, all things necessary to make this Indenture the valid
obligation of the Obligors according to its tenor and effect have been done or
authorized;
NOW, THEREFORE, in consideration of the premises and of the sum of Ten
Dollars and of other good and valuable consideration, receipt whereof upon the
delivery of this Indenture the Obligors hereby acknowledge, and in order to
strengthen the financial and operating condition of each and every Obligor,
directly and indirectly, as a result of the enhanced ability of the Company to
provide financial, accounting, consulting and administrative assistance and
services to each other Obligor, and in order to secure the payment, subject to
section 10 hereof, of both the principal of and interest and premium, if any,
upon the Notes at any time outstanding hereunder according to their tenor and
the provisions hereof, and, further subject to section 10 hereof, to secure the
faithful performance and observance of all the covenants and provisions in the
Notes, the Note Agreements (hereinafter referred to), the Pledge Agreements
(hereinafter referred to), the Mortgages (hereinafter referred to) and in this
Indenture contained, and to declare the terms and conditions upon which the
Notes will be secured, authenticated, issued, transferred and exchanged, and
upon which the trusts hereof are to be administered by the Trustees, and do
hereby GRANT, CONVEY, PLEDGE, TRANSFER, ASSIGN AND DELIVER to the Trustees and
unto their successors and assigns forever, in trust for the benefit of the
holders of the Notes, subject to section 10 hereof, and do hereby grant to the
Trustees and their successors and assigns a security interest in and to all of
the hereinafter defined Trust Estate, to wit:
(a) all the right, title and interest in and to all mortgages, deeds
of trust, deeds to secure debt, acts of mortgage, security agreements or similar
security instruments granted to them by the Obligors, including without
limitation, (i) that certain Pledge and Security Agreement of the Company dated
as of March 31, 1990; (ii) that certain Deed of Trust and Security Agreement of
Bountiful Psychiatric dated as of March 31, 1990 relating to certain Property
commonly known as Benchmark Regional Hospital, ▇▇▇▇▇ Cross, Utah; (iii) that
certain Deed of Trust and Security Agreement of Cumberland dated as of March 31,
1990 relating to certain Property commonly known as Cumberland Hospital,
Fayetteville, North Carolina; (iv) that certain Deed of Trust and Security
Agreement of East Carolina Psychiatric as of March 31, 1990 relating to certain
Property commonly known as ▇▇▇▇▇ ▇▇▇▇ Hospital, Jacksonville, North Carolina;
(v) that certain Mortgage and Security Agreement of Havenwyck dated as of March
31, 1990 relating to certain Property commonly known as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇; (vi) that certain Leasehold Deed of Trust, Assignment of
Rents and Security Agreement with Financing Statement (Fixture Filing) of Mesa
Psychiatric dated as of March 31, 1990 relating to certain Property commonly
known as Desert Vista Hospital, Mesa, Arizona; (vii) that certain Leasehold Deed
of Trust and Security Agreement of Psychiatric Institute dated as of March 31,
1990 relating to certain Property commonly known as Chestnut Ridge Hospital,
Morgantown, West Virginia (the Mortgage and Security Agreements described in the
foregoing clauses (ii) through (vii), inclusive, are herein collectively called
"Mortgages"); (viii) that certain Pledge and Security Agreement of Michigan
Psychiatric Services, Inc. dated as of March 31, 1990; (ix) that certain Pledge
and Security Agreement of Bountiful Psychiatric dated as of March 31, 1990; and
(x) that certain Pledge and Security Agreement of Americare of Galax, Inc. dated
as of March 31, 1990 (the Pledge and Security Agreements described in the
foregoing clauses (i), (viii), (ix) and (x) are herein collectively called the
"Pledge Agreements"), together with all right, title and interest now or
hereafter granted, conveyed, mortgaged or assigned and all proceeds and avails
thereof (all such Properties so held by the Trustees being sometimes herein
referred to as the "Mortgage Property and (b) all moneys and Securities from
time to time held by the Trustees under the terms of this Indenture (the
Mortgaged Property together with such moneys and Securities being sometimes
herein collectively referred to as the Trust Estate");
TO HAVE AND TO HOLD all and singular the Trust Estate whether now
owned or held or hereafter acquired, unto the Trustees, their successors in
trust and assigns forever;
IN TRUST, NEVERTHELESS, WITH POWER OF SALE, for the equal and ratable
benefit and security of the Notes, subject to section 10 hereof, from time to
time outstanding hereunder, without preference, priority or distinction of any
thereof over any other by reason of deference in time of issuance, sale,
authentication, delivery or otherwise, and for the enforcement of the payment of
the principal of, premium, if any, and Interest on the Notes in accordance with
their terms, and all other sums payable under this Indenture or on the Notes,
and the observance and performance of the provisions of, the Note Agreements,
the Pledge Agreements, the Mortgages and this Indenture, all as herein provided.
IT IS HEREBY COVENANTED, DECLARED AND AGREED, that the Notes are to be
issued, authenticated, delivered and secured, and that the Mortgaged Property is
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to be held, dealt with and disposed of by the Trustees, upon and subject to the
provisions of this Indenture.
SECTION 1. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 1.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Consolidated
Subsidiary) (i) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company,
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Company or (iii) 5% or more of the Voting Stock (or in the case of
a Person which is not a corporation, 5% or more of the equity interest) of which
is beneficially owned or held by the Company or a Subsidiary. 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 Stock, by contract or otherwise.
"Appraised Value" with respect to a Hospital shall mean the fair
market value on the date of an appraisal of such Hospital, including the Land
Parcels and Equipment subjected or to be subjected to the Mortgage related
thereto, as shown by (i) the appraisal thereof furnished to the Initial
Purchasers in accordance with the provisions of section 7(a)(vi) of the Note
Agreements or (ii) the appraisal thereof furnished to the Trustees in accordance
with the provisions of section 4.2 hereof.
"Appraiser" shall mean Valuation Counselors, Inc., or another firm of
appraisers satisfactory to the Required Holders.
"Bank Debt" shall mean (i) indebtedness for borrowed money outstanding
under the working capital facility provided under the Credit Agreement in an
aggregate principal amount not to exceed $5,000,000, (ii) indebtedness
outstanding under the term loan facility provided under the Credit Agreement in
an aggregate principal amount not to exceed $34,000,000 and (iii) indebtedness
outstanding under the letter of credit facility provided under the Credit
Agreement in an aggregate principal amount not to exceed $31,000,000.
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"Benchmark Regional Hospital" shall mean the Land Parcels, building,
improvements and Equipment comprising Benchmark Regional Hospital, ▇▇▇▇▇ Cross,
Utah.
"▇▇▇▇▇ ▇▇▇▇ Hospital" shall mean the Land Parcels, buildings,
improvements and Equipment comprising ▇▇▇▇▇ ▇▇▇▇ Hospital and Life Center of
Jacksonville, Jacksonville, North Carolina.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or New Orleans,
Louisiana are required or authorized to be closed.
"Capitalized Lease" shall mean (i) any lease the obligation for
Rentals with respect to which is required to be capitalized on a balance sheet
of the lessee in accordance with generally accepted accounting principles and
(ii) any lease entered into in connection with a sale and leaseback transaction.
"Capitalized Rentals" shall mean as of the date of any determination
the amount at which the aggregate Rentals due and to become due under all
Capitalized Leases under which the Company or any Consolidated Subsidiary is a
lessee.
"CHAMPUS" shall mean the Civilian Health and Medical Program of the
Uniformed Services which provides health benefits to active and retired military
personnel and their families.
"Chest Ridge Hospital" shall mean the Land Parcels, buildings,
improvements and Equipment comprising Chestnut Ridge Hospital, Morgantown, West
Virginia.
"Closing Date" shall have the meaning set forth in section 4(b) of the
Note Agreements.
"Consolidated Cash Flow" shall mean the sum of (a) Consolidated
Pre-Tax Net Income plus, to the extent deducted from the calculation of
Consolidated Pre-Tax Net Income, (b) deprecation plus (c) amortization plus (d)
Interest Expense less actual cash payments of Federal, state and local taxes of
the Company and its Consolidated Subsidiaries, all for the most recent tour
fiscal quarters, determined on a consolidated basis in accordance with generally
accepted accounting principles.
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"Consolidated Current Assets" and "Consolidated Current Liabilities"
shall mean such assets and liabilities of the Company and its Consolidated
Subsidiaries on a consolidated basis as shall be determined in accordance with
generally accepted accounting principles to constitute current assets and
current liabilities, respectively.
"Consolidated Debt Service" shall mean the sum of (i) Fixed Charges
plus (ii) scheduled mandatory principal payments of (A) Consolidated Funded
Indebtedness and (B) Subordinated Funded Indebtedness, required to be made
within twelve months following the date of any determination of Consolidated
Debt Service.
"Consolidated Net Income" for any period shall mean the gross revenues
of the Company and its Consolidated Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied and after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any taxes on such excluded gains and
any tax deductions or credits on account of any such excluded losses;
(b) the proceeds of any insurance policy;
(c) net earning and losses of any Consolidated Subsidiary accrued
prior to the date it became a Consolidated Subsidiary;
(d) net earnings and losses of any corporation (other than a
Consolidated Subsidiary), substantially all the assets of which have been
acquired in any manner, realized by such other corporation prior to the date of
such acquisition;
(e) net earnings and losses of any corporation (other than a
Consolidated Subsidiary) with which the Company or a Consolidated Subsidiary
shall have consolidated or which shall have merged into or with the Company or a
Consolidated Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a Consolidated
Subsidiary) in which the Company or any Consolidated Subsidiary has an ownership
interest unless such net earnings shall have actually been received by the
Company or such Subsidiary in the form of cash distributions;
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(g) any portion of the net earnings of any Consolidated Subsidiary
which for any reason is unavailable for payment of dividends to the Company or
any other Consolidated Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(i) any deferred or other credit representing any excess of the equity
in any Subsidiary at the date of acquisition thereof over the amount invested in
such Subsidiary;
(j) any gain arising from the acquisition of any Securities of the
Company or any Consolidated Subsidiary; and
(k) any reversal of any contingency reserve, except to the extent that
provision for such contingency reserve shall have been made from income arising
during such period, other than contractual adjustments under reimbursement
programs for Medicare, Medicaid, Champus and Blue Cross, all in accordance with
generally accepted accounting principles.
"Consolidated Net Tangible Assets" shall mean, as of the time of any
determination thereof, the total assets of the Company and its Consolidated
Subsidiaries appearing on a consolidated balance sheet of the Company and its
Consolidated Subsidiaries prepped in accordance with generally accepted
accounting principles as of the date of determination, after eliminating all
intercompany transactions and all amounts properly attributable to minority
interests, if any, in the stock and surplus of Consolidated Subsidiaries of the
Company and after deducting therefrom (without duplication of deductions); (a)
all Consolidated Current Liabilities; (b) the net book amount of all assets,
after deducting any reserves applicable thereto, which would be treated as
intangible under generally accepted accounting principles, including, without
limitation, such items as good will, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with respect to the
foregoing, unamortized debt discount and expense, organization expenses and the
excess of cost of purchased Subsidiaries of the Company over equity in the net
assets thereof at the date of acquisition; (c) any write-up in the book value of
any asset on the books of the Company or any of its Consolidated Subsidiaries
8
resulting from a revaluation thereof subsequent to the date of this Indenture
(other than the write-up of the book value of an asset made in accordance with
generally accepted accounting principles in connection with the purchase of such
asset); (d) the amounts, if any, at which shares of stock of the Company or any
of its Consolidated Subsidiaries appear on the asset side of such balance sheet;
(e) all deterred charges (other than prepaid expenses); (f) all reserves,
including, without limitation, reserves for deferred income taxes, liabilities
(fixed or contingent), depreciation, obsolescence, insurance and inventory
valuation, which appear or under generally accepted accounting principles are
required to appear on such balance sheet; and (g) the amounts at which any
investment in any Person (other than investments permitted by section 3.25)
appears on the asset side of such balance sheet.
"Consolidated Pre-Tax Net Income" for any period shall mean the gross
revenues of the Company and its Consolidated Subsidiaries for such period less
all expenses and other proper charges (other than taxes on income), determined
on a consolidated basis in accordance with generally accepted accounting
principles consistently applied and after eliminating earnings or losses
attributable to outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any taxes on such excluded gains and
any tax deductions or credits on account of any such excluded losses;
(b) the proceeds of any insurance policy;
(c) net earnings and losses of any Consolidated Subsidiary accrued
prior to the date it became a Consolidated Subsidiary;
(d) net earnings and losses of any corporation (other than a
Consolidated Subsidiary), substantially all the assets of which have been
acquired in any manner, realized by such other corporation prior to the date of
such acquisition;
(e) net earnings and losses of any corporation (other than a
Consolidated Subsidiary) with which the Company or a Consolidated Subsidiary
shall have consolidated or which shall have merged into or with the Company or a
Consolidated Subsidiary prior to the date of such consolidation or merger;
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(f) net earnings of any business entity (other than a Consolidated
Subsidiary) in which the Company or any Consolidated Subsidiary has an ownership
interest unless such net earnings shall have actually been received by the
Company or such Subsidiary in the form of cash distributions;
(g) any portion of the net earning of any Consolidated Subsidiary
which for any reason is unavailable for payment of dividends to the Company or
any other Consolidated Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(i) any deferred or other credit representing any excess of the equity
in any Subsidiary at the date of acquisition thereof over the amount invested in
such Subsidiary;
(j) any gain arising from the acquisition of any Securities of the
Company or any Consolidated Subsidiary; and
(k) any reversal of any contingency reserve, except to the extent that
provision for such contingency reserve shall have been made from income arising
during such period, other than contractual adjustments under reimbursement
programs for Medicare, Medicaid, Champus and Blue Cross, all in accordance with
generally accepted accounting principles.
"Consolidated Subsidiary" shall mean each of the Principal
Subsidiaries and any other Subsidiary (i) which is organized under the laws of
the United States or any State thereof; (ii) which conducts all of its business
and has all of its assets within the United States; (iii) of which more than 80%
(by number of votes) of the Voting Stock is owned by the Company and/or one or
more Consolidated Subsidiaries (iv) which is engaged in the business, directly
or through a Subsidiary, of operating psychiatric hospitals in the United
States; and (v) Which is consolidated with the Company for financial reporting
purposes in accordance with generally accepted accounting principles.
"Consolidated Tangible Net Worth" shall mean, as of the date of any
determination thereof, the aggregate amount of the capital stock (less treasury
stock), surplus and retained earnings of the Company and its Consolidated
Subsidiaries after deducting Minority Interests to the extent included in the
capital stock accounts of the Company plus the aggregate principal amount of the
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Subordinated Funded Indebtedness then outstanding up to an amount not to exceed
$7,500,000 less all Intangible Assets, all as determined on a consolidated basis
by the Company and its Consolidated Subsidiaries.
"Consumer Price Index" shall mean the percentage rise in the so-called
"Consumer Price Index for All Urban Consumers" as released by the U. S.
Government's Bureau of Labor Statistics determined for the most recent
twelve-month period.
"Credit Agreement" shall mean the Credit Agreement dated as of April
20, 1990 among the Company and certain Subsidiaries, as the Borrowers, Hibernia
National Bank, as a Lender, the other Lenders named therein, First Union
National Bank of North Carolina, as Issuing Bank and Administrative Agent, and
HomeFed Bank, Federal Savings Bank, as Agent.
"Cumberland Hospital" shall mean the Land Parcels, buildings,
improvements and Equipment comprising Cumberland Hospital and Lite Center of
Fayetteville, Fayetteville, North Carolina.
"Current Indebtedness shall mean any obligation for borrowed money
(and any notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money) payable on demand or
within a period of one year from the date of the creation thereof.
"Default" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Desert Vista Hospital" shall mean the Land Parcels, buildings,
improvements and Equipment comprising Desert Vista Hospital, Mesa, Arizona.
"Equipment" shall mean, collectively, the personal property described
in Granting Clause II of the Mortgages.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, amended from time to time.
"Event of Default" shall mean any of the Events of Default referred to
in section 6.1 hereof.
11
"Facility" shall mean a psychiatric hospital or healthcare facility
owned by the Company or a Consolidated Subsidiary.
"Fixed Charges" for any period shall mean on a consolidated basis the
sum of (i) all Rentals (excluding all Rentals on Capitalized Leases) payable
during such period by the Company and its Consolidated Subsidiaries, and (ii)
all Interest Expense on all Indebtedness (including interest payable under
Capitalized Leases) payable during such period by Company and its Consolidated
Subsidiaries.
"Funded Indebtedness" of any Person shall mean and include without
duplication,
(i) any obligation payable more than one year from the date of
creation thereof, which under generally accepted accounting principles is shown
on the balance sheet as a liability (including Capitalized Lease obligations but
excluding reserves for deferred income taxes and other reserves to the extent
that such reserves do not constitute an obligation),
(ii) indebtedness payable more than one year from the date of creation
thereof which is secured by any Lien on, or payable out of the proceeds of
production from, property owned by the Company or any Subsidiary, whether or not
the indebtedness secured thereby shall have been assumed by the Company or such
Subsidiary,
(iii) contingent obligations in respect of letters of credit issued
and not yet drawn upon,
(iv) Guaranties, endorsements (other than endorsements of negotiable
instruments for collection in the ordinary course of business) and other
contingent liabilities (whether direct or indirect) in connection with the
obligations, stocks or dividends of any other Person (other than Guaranties or
endorsements by the Company or a Subsidiary of, or other contingent obligations
in respect of, any obligation of a Subsidiary),
(v) obligations under any contract providing for the making of loans,
advances or capital contributions to any other Person, or for the purchase of
any property from any Person, in each case in order to enable such Person
primarily to maintain working capital, net worth or any other balance sheet
condition or to pay debts, dividends or expenses,
12
(vi) obligations under any contract for the purchase of materials,
supplies or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other property
or services shall be made regardless of whether or not delivery of such
materials, supplies or other property or services is ever made or tendered,
(vii) obligations under any Capitalized Lease or contract to rent or
lease (as lessee) any real or personal property if such contract (or any related
document) provides that the obligation to make payments thereunder is absolute
and unconditional under conditions not customarily found in commercial leases or
requires that the lessee purchase or otherwise acquire securities or obligations
of the lessor,
(viii) obligations under any contract for the sale or use of
materials, supplies or other property or services if such contract (or any
related document) requires that payment for such materials supplies or other
property or services, or the use thereof, shall be subordinated to any
indebtedness (of the purchaser or user of such materials, supplies or other
property or the Person entitled to the benefit of such services) owed or to be
owed to any Person,
(ix) obligations under any other contract which, in economic effect,
is substantially equivalent to a guarantee, and
(x) all capital stock of Subsidiaries of such Person which has a
preference as to dividends or upon liquidation and which is not owned by such
Person, either directly or through Subsidiaries of such Person,
all as determined in accordance with generally accepted accounting principles.
Notwithstanding anything herein to the contrary, "Funded Indebtedness" shall not
include (i) Subordinated Funded Indebtedness, (ii) Indebtedness outstanding
under the working capital facility of the Credit Agreement in an amount not to
exceed $5,000,000 or (iii) Practice Guaranties. "Consolidated" when used as a
prefix to any Funded Indebtedness shall mean the aggregate amount of all such
Funded Indebtedness of the Company and its Consolidated Subsidiaries on a
consolidated basis eliminating intercompany items.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deport or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend for other obligation, of any other Person (the "primary
13
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreements, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation or (y)
to maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, or (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
Notwithstanding anything herein to the contrary, "Guaranties" shall not include
Practice Guaranties.
"Havenwyck Hospital" shall mean the Land Parcels, buildings,
improvements and Equipment comprising Havenwyck Hospital, Auburn Hills,
Michigan.
"Hospital" shall mean (i) Benchmark Regional Hospital; or (ii) ▇▇▇▇▇
▇▇▇▇ Hospital; or (iii) Chestnut Ridge Hospital; or (iv) Cumberland Hospital; or
(v) Desert Vista Hospital; or (vi) Havenwyck Hospital. The term "Hospitals"
means the facilities described in (i), (ii), (iii), (iv), (v) end (vi) of the
preceding sentence, collectively.
"Indebtedness" of any Person shall mean all Current Indebtedness and
all Funded Indebtedness of such Person.
"Initial Purchasers" shall mean the institutions listed in Schedule I
to the Note Agreements, as Purchasers under the Note Agreements, end any Person
affiliated therewith, so long as such Initial Purchaser or any such Person or
the respective nominee thereof is holder of any of the Notes.
14
"Intangible Assets" shall mean as of the date of any determination
thereof, the total amount of all of the following assets of the Company and its
Consolidated Subsidiaries: good will, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred assets other than prepaid insurance and
prepaid taxes, the excess of cost of shares acquired over book value of related
assets and such other assets as are properly classified as "intangible assets"
in accordance with generally accepted accounting principles.
"Intercreditor Agreement" shall mean the Intercreditor Agreement dated
as of April 27, 1990 among (i) HomeFed Bank (as "Agents") and those certain
banks and other financial institutions which are or after the date of this
Indenture become parties to the Credit Agreement and (ii) the Trustees, trustees
for the benefit of the holders of the Notes.
"Interest Expense" for any period shall mean on a consolidated basis
the sum of all Interest and all amortization of debt discount and expense on all
Indebtedness of the Company and its Consolidated Subsidiaries. Computations of
Interest Expense on a pro forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the date of any
determination.
"Land Parcels" shall mean, collectively, the real property described
in Granting Clause I of the Mortgages.
"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property. For the
purposes of this Indenture, an Obligor shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.
15
"Minority Interests" shall mean any shares of stock of any class of a
Consolidated Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one or more of its Consolidated
Subsidiaries. Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating value
of such preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto.
"Mortgaged Facility" shall mean a Hospital on which a first lien has
been created pursuant to one of the Mortgages.
"Note or Notes; Outstanding" "Note" shall mean any of, and "Notes"
shall mean all of, the then outstanding Notes. "Outstanding" when used with
reference to Notes shall mean, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes for the payment or prepayment of which moneys in the
necessary amount shall have been deposited in trust with the Trustee; provided,
that if such Notes are to be prepaid prior to the maturity thereof, notice of
such repayment shall have been given as provided in section 5.6, or provision
satisfactory to the Trustee shall have been made for giving such notice;
(c) Notes purchased or held by any Affiliate of any Obligor; and
(d) Notes in lieu of or in substitution for which other Notes shall
have been authenticated and delivered pursuant to the terms of section 2.5
hereof.
"Note Agreements" shall mean the separate and several Note Purchase
Agreements, each dated as of March 31, 1990 between the Company, Bountiful
Psychiatric, Cumberland, East Carolina Psychiatric, Havenwyck, Mesa Psychiatric,
Psychiatric Institute and the Initial Purchasers.
"Officers' Certificate" shall mean certificate signed by the President
and any one of the following officers of the Company any Vice President or the
Secretary.
16
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel who shall be satisfactory to the Trustee, and who may be counsel to the
Company.
"Overdue Rate" shall mean with respect to (i) the Senior Secured
Notes, the greater of (A) 13.6% per annum and (B) the sum of the rate of
interest publicly announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York from
time to time in New York City as its prime rate plus 1% and (ii) the
Subordinated Secured Notes, the greater of (A) 17.6% per annum and (B) the sum
of the rate of interest publicly announced by ▇▇▇▇▇▇ Guaranty Trust Company of
New York from time to time in New York City as its prime rate plus 1%.
"Person" shall mean an individual, partnership, corporation, trust,
unincorporated association or other organization, or a government or any
department or agency thereof.
"Practice Guaranties" is defined in section 3.18(a)(11).
"Principal Subsidiary" shall mean Bountiful Psychiatric Hospital,
Inc., a Utah corporation, Cumberland Mental Health, Inc., a North Carolina
corporation, East Carolina Psychiatric Services Corporation, a North Carolina
corporation, Havenwyck Hospital, Inc., a Michigan corporation, Mesa Psychiatric
Hospital, Inc., an Arizona corporation, and Psychiatric Institute of West
Virginia, Inc., a Virginia corporation.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Purchaser" shall have the meaning set forth in section 1 of the Note
Agreements.
"Qualified Holder" shall mean any holder of Senior Secured Notes then
outstanding or, if no Senior Secured Notes shall be outstanding, Subordinated
Secured Notes then outstanding, which (together with the Affiliates of which),
and in either ease, owns and holds not less than $20,000,000 in aggregate
principal amount of such Senior Secured Notes or Subordinated Secured Notes, as
the case may be, and which (or an Affiliate of which) was the purchaser of such
Notes upon the original issuance thereof pursuant to this Indenture.
"Register" shall have the meaning specified in section 2.4 hereof.
17
"Rentals" shall mean and include all payments (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the property but excluding all payments under
Capitalized Leases) payable by the Company or a Consolidated Subsidiary, as
lessee or sublessee under a lease of real or personal property.
"Required Holders" at any time shall mean the holder or holders of not
less than 66-2/3% in aggregate principal amount of the Senior Secured Notes then
outstanding or, if no Senior Secured Notes are then outstanding, the holder or
holder of not less than 66-2/3% in aggregate principal amount of the
Subordinated Secured Notes then outstanding; provided, however, that in any
event the term "Required Holders" shall also include each Qualified Holder of
outstanding Senior Secured Notes so long as any Senior Secured Notes shall be
outstanding or, if no Senior Secured Notes are then outstanding, each Qualified
Holder of outstanding Subordinated Secured Notes.
"Restricted Investments" shall mean any investment in any Person other
than investments permitted by section 3.25(a) through section 3.25(g) hereof,
inclusive.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Secured Notes" shall have the meaning set forth in the
recitals of this Indenture.
"Subordinated Convertible Promissory Note" shall have the meaning set
forth in section 7(a)(xii) of the Note Agreements.
"Subordinated Funded Indebtedness" shall mean the Subordinated Secured
Notes, the Subordinated Convertible Promissory Note, the Subordinated Promissory
Note and any other unsecured Funded Indebtedness which (i) is expressly
subordinate or junior in right of payment to the Senior Secured Notes pursuant
to subordination provisions no more favorable to the holder thereof than the
subordination provisions contained in section 10 hereof and (ii) is expressed to
mature on or after April 1, 2000.
"Subordinated Promissory Note" shall have the meaning set forth in
section 7(a)(xiii) of the Note Agreements.
"Subordinated Secured Notes" shall have the meaning set forth in the
recitals of this Indenture.
18
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation. The
term "Subsidiary" shall mean a subsidiary of the Company.
"Superior Indebtedness" shall mean (i) all obligations, liabilities
and indebtedness of the Obligors to the holders of the Senior Secured Notes in
an aggregate principal amount not to exceed $56,500,000 arising under the Senior
Secured Notes, the Note Purchase Agreements and this Indenture, (ii) all
obligations, liabilities and indebtedness in an aggregate principal amount not
to exceed $31,000,000 created or arising under certain industrial development
bonds of the Company or its Subsidiaries and associated letters of credit and
reimbursement obligations in connection therewith under the Credit Agreement
(including extensions, renewals and refundings thereof without increase in the
outstanding principal amount under such facility at such time, (iii) all
obligations, liabilities and indebtedness outstanding under the Credit Agreement
in an aggregate principal amount not to exceed $5,000,000 arising under the
working capital facility provided in such Credit Agreement (including
extensions, renewals and refundings thereof without increase in the outstanding
principal amount under such facility at such time), (iv) all obligations,
liabilities and indebtedness outstanding under the Credit Agreement arising
under the term loan facility provided in such Credit Agreement in an aggregate
principal amount not to exceed $34,000,000 (including extensions, renewals and
refunds thereof without increase in the outstanding principal amount under such
facility at such time), and (v) additional indebtedness incurred after the date
of this Indenture in an aggregate principal amount not to exceed $25,000,000,
provided that all proceeds of such indebtedness are used exclusively to finance
the acquisition, construction or renovation of facilities owned or acquired by
the Company or any Subsidiary. Interest accrued on the indebtedness described in
the foregoing clauses (i), (ii), (iii), (iv) and (v) shall constitute "Superior
Indebtedness" regardless of whether such interest accrues before or after the
commencement of any bankruptcy, insolvency or receivership proceeding.
"Total Capitalization" shall mean, at any date as of which the amount
thereof is to be determined, the total of (i) the aggregate principal amount of
all Consolidated Funded Indebtedness then outstanding, plus (ii) Consolidated
Tangible Net Worth as of such date.
19
"Unconsolidated Subsidiary" shall mean any Subsidiary which is not a
Consolidated Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Indebtedness for
borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
"Yield-Maintenance Premium" is defined in section 5.4.
Section 1.2. Directly or Indirectly. Where any provision in this
Indenture refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
Section 1.3. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Indenture, the same shall be done in accordance with
generally accepted accounting principles, to the extent applicable, except where
such principles are inconsistent with the requirements of this Indenture.
SECTION 2. THE NOTES
Section 2.1. The Notes. (a) The Notes constitute the joint and several
obligation of the Obligors and shall be issuable as fully registered Notes. The
Notes will be dated the date of authentication and bear interest payable
quarterly on March 31, June 30, September 30 and December 31 in each year
(commencing June 30, 1990) and will mature on March 31, 2000. Interest on the
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
(b) The Senior Secured Notes shall be designated the Obligors' 11.6%
Senior Secured Notes due March 31, 2000 and shall be limited to $56,500,000 in
20
aggregate principal amount. The Senior Secured Notes will bear interest from the
date of issue until maturity at the rate of 11.6% per annum and will bear
interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate after
maturity, whether by acceleration or otherwise, until paid, and will be in
substantially the form attached hereto as Exhibit A.
(c) The Subordinated Secured Notes shall be designated the Obligors'
15.6% Subordinated Secured Notes due March 31, 2000 and shall be limited to
$3,000,000 in aggregate principal amount. The Subordinated Secured Notes will
bear interest from the date of issue until maturity at the rate of 15.6% per
annum and will bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest at the
Overdue Rate after maturity, whether by acceleration or otherwise, until paid,
and will be in substantially the form attached hereto as Exhibit B.
(d) The Trustee's certificate of authentication to be borne by such
Notes shall be substantially of the tenor and purport as set forth in Exhibit A
and Exhibit B hereto, and the Notes may have such letters, numbers or other
marks of identification or designation and such legends or endorsements thereon
as the Obligors may deem appropriate and as are not inconsistent with the
provisions of this indenture, or as may be required to comply with any law or
any rule or regulation made pursuant thereto.
Section 2.2. Denominations; Execution of Notes: Certificate of
Authentication. Each Note issued on the Closing Date shall be in the
denomination of $100,000 or any multiple of $1,000 in excess of $100,000. The
Notes shall be signed on behalf of each Obligor by its President or any Vice
President and attested by its Secretary or an Assistant Secretary. In case any
officer who shall have signed any Note shall cease to be such officer before
such Note shall have been authenticated by the Trustee or delivered by the
Obligors, such Note may nevertheless be executed and delivered with the same
force and effect as though the Person or Persons who signed such Note had not
ceased to be such officer of an Obligor; and any Note may be signed on behalf of
an Obligor by a Person who, at the actual date of execution of such Note, shall
be a proper officer of such Obligor, although at the date of such Note, such
Person was not then such officer of such Obligor. Only such Notes as shall bear
21
thereon a certificate of authentication substantially in the form set forth in
Exhibit A and Exhibit B hereto shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Note executed by the Obligors shall be conclusive evidence that
the Note so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture. The
authentication by the Trustee of any Note issued hereunder shall not be
construed as a representation or warranty by the Trustees as to the validity or
security of this Indenture or of such Note, and the Trustees shall in no respect
be liable or answerable for the use made of such Note or the proceeds thereof.
Section 2.3. Authentication and Delivery. Forthwith upon the execution
and delivery of this Indenture and pursuant to the Note Agreements, the Obligors
may deliver Notes executed by the Obligors to the Trustee, together with a
request for the authentication and delivery of such Notes; and the Trustee in
accordance with such request shall authenticate and deliver Senior Secured Notes
in the aggregate principal amount of $56,500,000 and Subordinated Secured Notes
in the aggregate principal amount of $3,000,000, as in this Indenture provided
and not otherwise.
Section 2.4. Payment of the Notes. (a) The principal of, premium, if
any, and interest on the Notes shall be payable at the principal corporate trust
office of the Trustee, in lawful money of the United States of America.
(b) Notwithstanding the provisions of the preceding paragraph (a) or
the Notes, if any Note is held by an Initial Purchaser or is registered in the
name of any holder named in a written notice to the Company and the Trustee
stating that the provisions of this paragraph shall apply (without any
presentment of any such Note), the Company or the Trustee, as applicable
pursuant to section 3.11 hereof, from and after the receipt of such notice shall
make payment of interest on such Notes and shall make payments or prepayments of
the principal thereof, and any premium, by wire transfer in immediately
available Federal Reserve funds to such Bank in the continental United States as
shall be specified in Schedule I attached to the Note Agreements or otherwise in
writing to the Trustee by such holder and such holder (or the transferee of any
such holder) will, before or after selling, transferring or otherwise disposing
of such Note, present such Note to the Trustee for transfer and notation as
provided in section section 2.6 and 2.7. All payments so made shall be valid and
22
satisfy and discharge the liability upon such Note to the extent of the sums
soeffectual to paid. Any payment or prepayment of amounts due on any Note in
accordance with the terms thereof and hereof which is due on a date which is not
a Business Day shall be payable on the next succeeding Business Day. The Trustee
is authorized to act in accordance with the foregoing provisions and shall not
be liable or responsible to any such holder or to any Obligor or to any other
Person for any act or omission on the part of the Obligor or such holder in
connection therewith except for negligence or willful misconduct on the part of
the Trustee.
Section 2.5. The Register. The Obligors shall cause the Trustee to
keep at its principal corporate trust office a register for the registration and
transfer of Notes (herein called the "Register"). The Trustee hereby accepts the
office of registrar. The names and addresses of the holders of the Notes, the
transfers of the Notes and the names and addresses of the transferees of all
Notes shall be registered in the Register.
Section 2.6. Transfers and Exchanges. (a) The holder of any Note may
transfer such Note on the books of the Trustee upon the surrender thereof by
such holder prior to such transfer or by the transferee of such Note promptly
after sued transfer at the principal corporate trust office of the Trustee.
Thereupon, the Obligor shall execute in the name of the transfer a new Note or
Notes of the same class in aggregate principal amount equal to the aggregate
unpaid principal amount of the Note so surrendered, in denominations of $100,000
or any amount in excess thereof such transferee shall specify, and the Trustee
shall authenticate end deliver such new Note or Notes to such transferee.
(b) The holder of any Note may at any time surrender such Note at the
principal corporate trust office of the Trustee in exchange for an equal
aggregate principal amount of Notes of the same class, in the denomination of
$100,000 or any amount in excess thereof as such holder shall specify.
(c) All Notes presented or surrendered for exchange or transfer shall
be accompanied by a written instrument or instruments of assignment or transfer,
in form and with appropriate signature guarantees satisfactory to the Trustee,
duly executed by the registered holder or by his attorney duly authorized in
writing.
23
(d) In case any Note shall become mutilated or be destroyed, lost or
stolen, the Obligors, upon the written request of the holder thereof, shall
execute and the Trustee shall authenticate and deliver, a new Note in exchange
and substitution for the mutilated Note, or in lieu of and substitution for the
Note so destroyed, lost or stolen, which new Note shall be a Note of the same
class in an aggregate principal amount equal to the aggregate unpaid principal
amount of such destroyed, lost or stolen Note. In every case the applicant for a
substituted Note shall furnish to the Obligors and to the Trustee such security
or indemnity as may be required by them to save each of them harmless from all
risks, and the applicant shall also furnish to the Obligors and to the Trustee
evidence to their satisfaction of the mutilation, destruction, loss or theft of
the applicant's Note and of the ownership thereof. In case any Note which has
matured or will mature within 30 days shall become mutilated or be destroyed,
lost or stolen, the Obligors may, instead of issuing a substituted Note, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Note), if the applicant for such payment shall furnish to the
Obligors and to the Trustees such security or indemnity as they may require to
save them harmless, and evidence to the satisfaction of the Obligors and the
Trustee of the mutilation, destruction, loss or theft of such Note and of the
ownership thereof. If the Initial Purchaser is the owner of any mutilated,
destroyed, lost or stolen Note, then the affidavit of its President, Vice
President, Assistant Vice President or Treasurer setting forth the fact of
destruction, loss or theft and such Person's ownership of the Note at the time
of such mutilation, destruction, loss or theft shall be accepted as satisfactory
evidence thereof and no indemnity shall be required as a condition to payment of
such Note or execution and delivery of a new Note other than the written
agreement of such Person to indemnify the Obligors and the Trustees.
(e) No notarial act shall be necessary for the transfer or exchange of
any Note pursuant to this section 2.6, and the holder of any Note issued as
provided in this section 2.6 shall be entitled to any and all rights and
privileges granted under this Indenture to a holder of a Note.
Section 2.7. New Notes. (a) Each new Note (herein in this section 2.7
called a "New Note") issued pursuant to section 2.6(a), (b) or (d) in exchange
for or in substitution or in lieu of an outstanding Note (herein in this section
2.7 called an "Old Note") shall be dated the date of such Old Note. The Trustee
shall ▇▇▇▇, to the extent of any payments made by the Trustee as paying agent
and any payments made by the Obligors as their own paying agent of which the
24
Trustee has received notice pursuant to section 3.11 hereof, on each New Note
(i) the date to which principal and interest have been paid on such Old Note,
and (ii) all payments and prepayments of principal previously made on such Old
Note which are allocable to such New Note. Interest shall be deemed to have been
paid on such New Note to the date on which interest shall have been paid on such
Old Note, and all payments and prepayments of principal marked on such New Note,
as provided in clause (ii) above, shall be deemed to have been made thereon.
(b) The issuance of a New Note pursuant to section 2.6(a), (b) or (d)
shall be without expense to the holder, except that the Obligors may require the
payment of a sum to reimburse them for, or to provide them with funds for, the
payment of any tax or other governmental charge which are paid or payable by the
Obligors in connection with the transfer or exchange.
(c) All New Notes issued pursuant to section 2.6(a), (b) or (d) in
exchange for in substitution or in lieu of Old Notes shall be valid obligations
of the Obligors evidencing the same outstanding debt as the Old Notes and shall
be entitled to the benefits and security of this Indenture to the same extent as
the Old Notes.
Section 2.8. Cancellation of Notes. All Notes surrendered for the
purpose of payment, redemption, transfer or exchange shall be delivered to the
Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled
by it, and no Notes shall be issued in lieu thereof except as expressly required
or permitted by any of the provisions of this Indenture. The Trustee shall hold
all such cancelled Notes until this Indenture shall have been discharged, at
which time the Trustee shall either deliver such cancelled Notes in a manner
necessary to effect the discharge and release of this Indenture of record or, if
no such delivery is necessary, shall destroy such cancelled Notes and deliver a
certificate to the Company certifying such destruction. If any Obligor shall
acquire any of the Notes, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Notes unless
and until the same are surrendered to the trustee for cancellation.
Section 2.9. Trustee as Agent. The Trustee is hereby appointed the
agent of the Obligors for the payment, registration, transfer end exchange of
Notes. Subject to the provisions of section 2.4 and 12.5, Notes may be presented
for payment at, and notices with respect to the Notes or this Indenture may be
25
served or made at, the principal corporate trust office of the Trustee, provided
that copies of all such notices shall be delivered to the Company.
Section 2.10. Ownership. The Person in whose name any Note shall be
registered shall be deemed and treated as the owner thereof for all purposes of
this Indenture and neither the Obligors nor the Trustee shall be affected by any
notice to the contrary. Payment of or on account of the principal of, premium,
if any, and interest on such Note shall be made only to or upon the order in
writing of such registered owner. For the purpose of any request, direction or
consent hereunder, the Obligors and the Trustee may deem and treat the
registered owner of any Note as the owner thereof without production of such
Note.
Section 2.11. Ranking of Notes of Each Class. As provided in section
10 hereof, Subordinated Secured Notes shall rank junior and subordinate to the
Senior Secured Notes in right of payment and in respect of certain other rights
and powers of the holders of Notes issued hereunder.
SECTION 3. PARTICULAR COVENANTS OF THE OBLIGORS
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note, the Obligors covenant with the Trustees for the
benefit of the Trustees and the holders of the Notes as follows:
Section 3.1. Warranty of Title. Subject only to the Lien of the Pledge
Agreements, the Mortgages and Liens permitted thereby, the Obligors,
respectively, have good and marketable title to and are lawfully possessed of
all of the Mortgaged Property, and have full right, power and authority to
mortgage and pledge the same for the purposes hereof; and the Obligors will
warrant and defend title thereto to the Trustees against claims of all Persons
whomsoever.
Section 3.2. Payment of Principal, Premium and Interest. Subject to
section 10 hereof, the Obligors, jointly and severally, will duly and punctually
pay the principal of, premium, if any, and interest on, each and every Note, at
the dates and the places and in the manner mentioned in the Notes and in this
Indenture, according to the true latent and meaning thereof and hereof.
Section 3.3. Office for Notices. The Obligors will keep an office
while any of the Notes issued hereunder are outstanding where notices,
presentations and/or demands to or upon the Obligors in respect of the Notes,
the Pledge Agreements, the Mortgages or this Indenture may be given or made, at
One Poydras Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
26
until such time the Obligors shall notify the Trustee and the holders of the
Notes of any change of location of such office.
Section 3.4. Note Agreement, Pledge Agreement and Mortgage Covenants.
Each and all of the terms, provisions, restrictions, covenants and agreements
set forth in the Note Agreements, the Pledge Agreements and the Mortgages, and
in each and every supplement thereto or amendment thereof which may at any time
or from time to time be executed and delivered by the parties thereto or their
successors and assigns, are incorporated herein by reference to the same extent
as though each and all of said terms, provisions, restrictions, covenants and
agreements were fully set out herein and as though any amendment or supplement
to the Note Agreements, each Pledge Agreement and each Mortgage were fully set
out in an amendment or supplement to this indenture; and the Obligors do hereby
covenant and agree well and truly to abide by, perform and be governed and
restricted by each and all of the matters provided for by the Note Agreements,
the Pledge Agreements and the Mortgages to the same extent and with the same
force and effect as if each and all of said terms, provisions, restrictions,
covenants and agreements so incorporated herein by reference were set out and
repeated herein at length.
Section 3.5. Maintenance of Corporate Existence, Rights. Each Obligor
will at all times preserve its corporate existence (except as otherwise
permitted by section 3.21 hereon and will obtain and maintain in full force and
effect all franchises, privileges, rights, licenses and permits and all other
consents, approvals and authorizations of any governmental authority necessary
for the ownership and efficient operation and maintenance of the Mortgaged
Property.
Section 3.6. Maintenance of Lien; Recording. (a) The Obligors will, at
their expense, take all necessary action to maintain and preserve the Lien of
this Indenture and of the Pledge Agreements and the Mortgages so long as any
Notes are outstanding.
(b) The Obligors will, forthwith after the execution and delivery of
this Indenture, each Pledge Agreement and each and every Mortgage and thereafter
from time to time, cause this Indenture, each Pledge Agreement, each Mortgage
and financing statements to be filed, registered and recorded in such manner and
in such places as may be required by law in order to publish notice of and fully
27
to protect the Lien hereof and of each Pledge Agreement and each Mortgage in
respect of, upon, and the title of the Trustees to, the Trust Estate; and from
time to time will perform or cause to be performed any other act as provided by
law and will execute or cause to be executed any and all further instruments,
continuation statements and similar statements that may be requested by the
Trustees or either of them for such publication and protection the Obligors
will, within 10 days after any such filing, registering, recording or other act
and in any event not less than 10 days prior to the lapse of the perfection of
any security interest granted under this Indenture, any Pledge Agreement or any
Mortgage, furnish the Trustees with an Opinion of Counsel as to the adequacy and
recitals the details of such filing, reentering, recording or other act and as
to the perfection of any security interest effected by such filing, registering,
recording or other act and specifying any rerecording or refiling required to be
effected in the future with respect to this Indenture, the Pledge Agreements,
such Mortgage or financing statement. To the extent permitted by applicable
lair, the Obligors will pay or cause to be paid all filing, registration and
recording taxes and fees incident to such filing registration and recording, and
all expenses incident to the preparation, execution and acknowledgment of this
Indenture, each Pledge Agreement, each Mortgage and each financing statement,
and of any instrument of further assurance, and all Federal or state stamp taxes
and other taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Indenture, each Pledge
Agreement, each Mortgage and each financing statement and such instrument of
further assurance.
Section 3.7. Further Assurances; After - Acquired Property. (a) The
Obligors will at their expense do, execute, acknowledge and deliver, or cause to
be done, executed, acknowledged and delivered, all such further acts, deeds,
conveyances, mortgages, assignments, transfers and assurances as may be required
for the perfection of the Lien being herein provided for in the Trust Estate.
(b) All right, title and interest of any Obligor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, a Hospital or any part thereof,
hereafter constructed or acquired by such Obligor, immediately upon such
construction or acquisition, and without any further mortgaging, conveyance or
assignment, shall become and be part of such Hospital and the Mortgaged Property
and shall be subject to the Lien of this Indenture and the Mortgages as fully
28
and completely and with the same effect as though now owned by such Obligor, but
at any and all times the Obligors will execute and deliver to the Trustees any
and all such further insurances, mortgages, conveyances or assignments thereof
and other instruments with respect thereto as may reasonably be required for the
purpose of expressly and specifically subjecting the same to the Lien of this
Indenture and the Mortgages.
Section 3.8. Maintenance of Property. The Obligors will at all times
maintain, preserve and keep, the Hospitals and Equipment in good condition and
make all necessary renewals, replacements, additions, betterments and
improvements thereto.
Section 3.9. Right of Trustee to Perform Covenants, Etc. If the
Obligors shall fail to perform any of their covenants under this Indenture, the
Note Agreements, the Pledge Agreements or the Mortgages, the Trustee, after five
days' prior written notice to the Company and without waiving or releasing any
obligation or Default, shall, if directed by the Required Holders in writing so
to do, make advances (subject to the provisions of section 7.2(h) hereof) to
effect performance of such covenant for the account and at the expense of the
Obligors, and shall enter upon the Mortgaged Property or any part thereof for
such purpose and take all such action thereon as may be necessary or appropriate
therefor. All sums so paid by the Trustee and all costs and expenses (including
without limitation, reasonable attorneys' fees and expenses) so incurred,
together with interest thereon at a rate equal to the greater of (i) 13.6% per
annum and (ii) the sum of the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York from time to time in New York City as its
prime rate plus 1% from the date of payment or incurrence, shall be secured
hereby in priority to the indebtedness evidenced by the Notes and shall be paid
by the Obligors to the Trustee on demand. The Trustee in making any payment
authorized under this Section relating to taxes or assessments may do so
according to any ▇▇▇▇, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of such ▇▇▇▇, statement or
estimate or into the validity of any tax assessment, sale, forfeiture, tax Lien
or title or claim thereof, unless otherwise aware of any inaccuracy or
invalidity. As between the Obligors and the Trustee, the Trustee, in performing
any covenant under this Section, shall be the sole judge of whether the Obligors
are required to perform the same under the terms of this Indenture.
29
Section 3.10. Obligors to Give Notice of Default. When any Event of
Default described in 6.1 has occurred, or if the holder of any Note or of any
other evidence of indebtedness in excess of $50,000 of any Obligor gives any
notice or takes any other action with respect to a claimed default, the Obligors
agree to give notice to the Trustee and each holder of any Note within three
business days after the earlier of (i) the date of discovery by any Obligors of
the occurrence of such event or (ii) the date upon which any Obligor, in the
exercise of reasonable diligence should have discovered the occurrence of such
event, such notice to be in writing and sent by registered or certified mail or
by telegram.
Section 3.11. Money for Note Payments to be Held in Trust, Repayment
of Unclaimed Money. If the Obligors shall at any time set as their own paying
agent, they will, on or before each date upon which a payment of interest or a
payment or prepayment of principal is due (a "Note Payment Date"), segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay the principal (and premium, if any) or interest becoming due on such date
until such sums shall be paid to such holders or otherwise disposed of as herein
provided, and the Obligors will promptly notify the Trustee of their action or
failure to act.
Whenever the Trustee shall act as a paying agent, the Obligors will,
prior to each Note Payment Date, deposit with the paying agent sum sufficient to
pay the principal (and premium, if any) or interest becoming due on such date,
such sum to be held in trust for the benefit of the holders of the Notes. The
Obligors will not appoint a Person, other than the Trustee, to act as paying
agent.
Moneys so segregated or deposited and held in trust shall not be part
of the Trust Estate but shall constitute a separate trust fund for the benefit
of the Persons entitled to such principal, premium or interest. Moneys held in
trust by the Trustee for the payment of the principal (or premium, if any) or
interest on the Notes need not be segregated from other funds, except to the
extent required by law.
Any money deposited with the Trustee in trust for the payment of the
principal (and premium, if any) or interest on any Notes and remaining unclaimed
for 6 years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company; and the holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee with respect to such trust
money, shall thereupon cease.
30
Section 3.12. Maintenance of Insurance and Licenses.
The Company and each Consolidated Subsidiary will:
(a) Insurance - maintain, with financially sound and reputable
insurers acceptable to the Required Holders, insurance with respect to its
properties and business against such casualties and contingencies, of such types
(including public liability, business interruption, medical malpractice,
larceny, embezzlement or other criminal misappropriation insurance) and in such
amounts as is (i) customary in the case of corporations of established
reputations engaged in the same or a similar business and similarly situated and
(ii) acceptable to the Required Holders. The Company will furnish, or cause to
be furnished, to each holder of any Note, within 30 days after the end of each
fiscal year of the Company, a report signed by an independent firm of insurance
brokers acceptable to the Required Holders describing in reasonable detail the
insurance then carried and maintained by the Obligors and stating the opinion of
such firm that such insurance complies with the terms of this section 3.12 and
of section 2.6 of each Mortgage and that such insurance together with any
self-insurance permitted hereby is adequate for the protection of the interests
of the holders of the Notes. In lieu of or supplemental to such insurance, but
subject to Section 2.6 of the Mortgages, the Company may adopt such other plan
or method of protection, whether by the establishment of an insurance fund or
reserve to be held and applied to make good losses from casualties, or
otherwise, and conforming to the practices of similar corporations maintaining
systems of self-insurance, as may be determined by the Board of Directors of the
Company and as shall be consistent with existing policies as to self-insurance
and with generally accepted accounting principles. If the Company adopts any
such other plan or method of protection, whether by the establishment of an
insurance fund or reserve, or otherwise, the Company shall, at the time of
establishment thereof, furnish to each holder of outstanding Notes a certificate
of an actuary that such plan or method of protection is adequate; and
(b) Licensed Facilities - keep and maintain all material licensing
requirements and accreditations to serve as a psychiatric facility for each
Mortgaged Facility owned or operated by any Principal Subsidiary of all local,
state and federal regulatory agencies having jurisdiction over such Mortgaged
31
Facility (except to the extent such a requirement has been waived in writing by
the appropriate regulatory agency) and shall participate in, be eligible for
reimbursement under, end be in compliance with all requirements of each public
or private reimbursement program applicable to any Facility, and shall have
timely filed or caused to be timely filed completed and accurate cost and other
report required by law or otherwise to be made with respect to the purchase of
services by third party purchasers, include, but not limited to, Medicare,
Medicaid and CHAMPUS programs and other insurance carriers where applicable to
such Mortgaged Facility as set forth on Annex D to Exhibit D attached to the
Note Agreements.
Section 3.13. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Consolidated Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or such
Consolidated Subsidiary, respectively, or upon or in respect of all or any part
of the property or business of the Company or such Consolidated Subsidiary, all
trade accounts payable in accordance with usual and customary business terms,
and all claims for work, labor or materials, which if unpaid might become a lien
or charge upon any property of the Company or such Consolidated Subsidiary;
provided the Company or such Consolidated Subsidiary shall not be required to
pay any such tax, assessment, charge levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
any property of the Company or such Consolidated Subsidiary or any material
interference with the use thereof by the Company or such Consolidated
Subsidiary, and (ii) the Company or such Consolidated Subsidiary shall set aside
on its books, reserves deemed by it to be adequate with respect thereto. The
Company will promptly comply and will cause each Subsidiary to comply with all
laws, ordinances or governmental rules and regulations to which it is subject
including, without limitation, the Occupation Safety and Health Act of 1970,
ERISA and all laws, ordinances, and rules and regulations relating to
environmental protection in all applicable jurisdictions, the violation of which
would materially and adversely affect the properties, business, prospects,
profits or condition of the Company and its Subsidiaries or would result in any
lien or charge upon any property of the Company or any Subsidiary.
Section 3.14. Maintenance, etc. The Company will maintain, preserve
and keep, and will cause each Consolidated Subsidiary to maintain, preserve and
32
keep, its properties which are used or useful in the conduct of its bylines
(whether owned in fee or a leasehold interest) in good repair and working order
and from time to time will make all necessary repair replacements, renewals and
additions so that at all times the utility thereof shall not be impaired.
Section 3.15. Nature of Business. Neither the Company nor any
Consolidated Subsidiary will engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Consolidated Subsidiaries would be
substantially excluded from the business of operating psychiatric hospitals in
the United Stated
Section 3.16. Consolidated Tangible Net Worth. The Company will at all
times keep and maintain Consolidated Tangible Net Worth at an amount not less
than the sum of (i) 50% of Consolidated Net Income for the period from and after
July 1, 1990 to and including the date of determination hereunder, computed on a
cumulative basis for said entire period (if Consolidated Net Income for any
fiscal year is a deficit figure then Consolidated Net Income for such fiscal
year shall equal zero for the purposes of this section 3.16), plus (ii) either
(A) during the fiscal year ending June 30, 1990, $20,000,000 or (B) during the
fiscal year beginning July 1, 1990 and any subsequent fiscal year during which
any Notes outstanding, $25,000,000.
Section 3.17. Fixed Charge Coverage. The Company will, as of the end
of each fiscal quarter, keep and maintain the ratio of (i) sum of (A)
Consolidated Cash Flow plus (B) Rentals to (ii) Fixed Charges for the most
recent four fiscal quarters, at not less than (x) 1.5 to 1, in the case of any
determination being made hereunder on or prior to June 30, 1991, and (y) 2.0 to
1, in the case of any determination being made hereunder at any time thereafter.
Section 3.18. Limitations on Indebtedness.
(a) The Company will not, and will not permit any Consolidated
Subsidiary to, create, assume, incur or guarantee or in any manner be or become
liable in respect of any Current Indebtedness or Funded Indebtedness, except:
(1) the Note;
(2) the Bank Debt, provided that during the twelve-month period
immediately preceding the date of any determination hereunder (commencing on the
date occurring twelve months after the Closing Date), there shall have been a
33
period of 45 consecutive days during which the Company and each of its
Consolidated Subsidiary shall have been free of all Indebtedness outstanding
under the working capital facility of the Credit Agreement and all other Current
Indebtedness;
(3) Funded Indebtedness of the Company and its Consolidated
Subsidiaries outstanding as of the date of this Indenture and described in Annex
B to Exhibit E attached to the Note Agreements;
(4) Funded Indebtedness issued or incurred for the purpose of
extending, renewing or refunding Funded Indebtedness (including the Bank Debt)
outstanding as of the date of this Indenture, prodded that the principal amount
of Funded Indebtedness extended, renewed or refinanced does not exceed the
outstanding principal amount of such Funded Indebtedness at such time;
(5) Guaranties entered late by the Company in the ordinary course of
business, provided that the aggregate principal amount of Indebtedness which the
Company may become obligated to pay thereunder shall not exceed $250,000 at any
one time outstanding;
(6) other Funded Indebtedness issued or incurred after July 1, 1990
provided that, at the time of the issuance or incurrence thereof and after
giving effect thereto and to the application of the proceeds thereof:
(i) Consolidated Funded Indebtedness shall not exceed the
following percentages of Total Capitalization:
Percentage of
Total
Period Capitalization
July 1, 1990 thru June 30, 1991 78%
July 1, 1991 thru June 30, 1992 74%
July 1, 1992 thru June 30, 1993 69%
July 1, 1993 and thereafter 65%
(ii) the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow for the most recent four fiscal quarters shall not exceed
(A) 4.5 to 1, in the case of any determination being made hereunder on or prior
34
to June 30, 1991, and (B) 4.0 to 1, in the case of any determination being made
hereunder at any time thereafter;
(iii) the sum of Consolidated Cash Floor plus Rentals for the
most recent four focal quarters shall be not less then 1.5 times proforma
Consolidated Debt Service for the immediately succeeding four fiscal quarters;
and
(iv) No Default or Event of Default shall have occurred and be
continuing;
(7) unsecured Current Indebtedness of the Company and its Consolidated
Subsidiaries, prodded that during the twelve-month period immediately preceding
the date of any determination hereunder (commencing on the date occurring twelve
months after the Closing Date), there shall have been a period of 45 consecutive
days during which the Company and each of its Consolidated Subsidiaries shall
have been free of all Indebtedness outstanding under the working capital
facility of the Credit Agreement and all other Current Indebtedness;
(8) Current Indebtedness or Funded Indebtedness (i) of a Principal
Subsidiary to the Company or to another principal Subsidiary and (ii) of the
Company to a Principal Subsidiary;
(9) Current Indebtedness or Funded Indebtedness (i) of a Consolidated
Subsidiary other than a Principal Subsidiary to the Company or to another
Consolidated Subsidiary other than a Principal Subsidiary and (ii) of the
Company to a Consolidated Subsidiary other than a Principal Subsidiary;
(10) Funded indebtedness representing purchase money obligations and
secured by purchase money liens permitted by section 3.19(i), provided that (i)
such Funded Indebtedness is incurred in compliance with the limitations on
Indebtedness set forth in this section 3.18 and (ii) at the time of issuance
thereof and after giving effect thereto and to the application of the proceeds
thereof, no Default or Event of Default shall have occurred and be continuing;
(11) unsecured Indebtedness of the Company or any of its Consolidated
Subsidiaries incurred in the ordinary course of business resulting from
physician or mental health practice guaranties pursuant to which the Company or
any such Consolidated Subsidiary guarantees to pay a physician or mental health
professional on the medical staff of a Hospital owned of operated by it a
minimum annual income or guaranties by the Company for such Consolidated
Subsidiary of obligations or any such physician or mental health professional
35
(Practice Gustier), in an aggregate amount at any one time outstanding in
respect of Practice Guaranties for the benefit of any one physician or mental
health professional not to exceed $250,000 and in an aggregate amount at any one
time outstanding in respect of all such Practice Guaranties not to exceed
$5,000,000.
(12) Funded Indebtedness issued or incurred by the Company or any
Consolidated Subsidiary in connection with the acquisition of telephone systems
to be used at facilities owned by the Company or such Consolidated Subsidiary,
provided that the aggregate principal amount of all such Funded Indebtedness at
any one time outstanding shall not exceed $600,000;
(13) additional unsecured Subordinated Funded Indebtedness in an
aggregate principal amount not to exceed $2,000,000; provided that (i) all
proceeds of such Subordinated Funded Indebtedness shall be used exclusively to
retire the Subordinated Promissory Note, (ii) the terms of such Subordinated
Funded Indebtedness (including interest rate, covenants, defaults, subordination
provisions and related warrants if any) shall be no more favorable to the
holders thereof than the terms of the Subordinated Secured Note and all such
Subordinated Funded Indebtedness shall mature on or after April 1, 2000;
(14) Guaranties of any Consolidated Subsidiary entered into pursuant
to the Credit Agreement; provided that with respect to any such Guaranty entered
into by any Principal Subsidiary (i) the obligations guaranteed by such Guaranty
shall be limited to the amount of accounts receivable of the Principal
Subsidiaries allocated to the lenders under the Credit Agreement under the
receivable Print formula provided under the Intercreditor Agreement and (ii)
recourse under such Guaranty shall be limited solely to the accounts receivable
of such Principal Subsidiary, all subject to the accounts receivable sharing
provided under the Intercreditor Agreement; and
(15) additional Current Indebtedness incurred under the working
capital facility of the Credit Agreement in an aggregate principal amount not to
exceed $3,000,000, provided that, at the time of the issuance or incurrence
thereof and after giving effect thereto and to the application of the proceeds
thereof:
(i) Consolidated Funded Indebtedness shall not exceed the
following percentages of Total Capitalization:
36
Percentage of
Total
Period Capitalization
July 1, 1990 thru June 30, 1991 78%
July 1, 1991 thru June 30, 1992 74%
July 1, 1992 thru June 30, 1993 69%
July 1, 1993 and thereafter 65%
(ii) the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow for the most recent four fiscal quarters shall not exceed
(A) 4.5 to 1, in the case of any determination being made hereunder on or prior
to June 30, 1991, and (B) 4.0 to 1, in the case of any determination being made
hereunder at any time thereafter;
(iii) the sum of Consolidated Cash Flow plus Rentals for the most
recent four fiscal quarters shall be not less then 1.5 times pro-forma
Consolidated Debt Service for the immediately succeeding four fiscal quarters;
and
(iv) No Default or Event of Default shall have occurred and be
continuing;
and provided further that during the twelve-month period immediately preceding
the date of any determination hereunder (commencing on the date occurring twelve
months after the Closing Date there shall have been a period of 45 consecutive
days during which the Company and each of its Consolidated Subsidiaries shall
have been free of all Indebtedness outstanding under the working capital
facility of the Credit Agreement and all other Current Indebtedness.
(b) Any corporation which becomes a Consolidated Subsidiary after the
date hereof shall for all purposes of this section 3.18 be deemed to have
created, assumed or incurred at the time it becomes a Consolidated Subsidiary
all Current Indebtedness and Funded Indebtedness of such corporation existing
immediately after it becomes a Consolidated Subsidiary.
Section 3.19. Limitation on Liens. The Company will not, and will not
permit any Consolidated Subsidiary to, create or incur, or suffer to be incurred
or to exist, any mortgage, pledge, security interest, encumbrance, lien or choke
of any kind on its or their property or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom, or transfer any property for
the purpose of subjecting the same to the payment of obligations in priority to
37
the payment of its or their general creditors, or acquire or agree to acquire,
or permit any Consolidated Subsidiary to acquire, any property or wets upon
conditional sales agreements or other title retention devices, except:
(a) liens granted pursuant to or permitted by the Mortgages, the
Indenture and the Pledge Agreements securing the Notes;
(b) liens granted pursuant to the Credit Agreement in connection with
the incurrence of any Bank Debt and described in Annex B to Exhibit E attached
to the Note Agreements;
(c) liens for property taxes and assessments or governments shares or
levies and liens securing claims or demands of mechanics and materialmen,
provided that payment thereof is not at the time required by section 3.13;
(d) liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which the Company or a Consolidated Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review shall
have been secured.
(e) liens, charges, encumbrances and priority claims incidental to the
conduct of business or the ownership of properties and assets (including
warehousemens and attorneys' liens and statutory landlords' liens) and deposits,
pledges or liens to secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds or other liens of
like general nature incurred in the ordinary course of business and not in
connection trite the borrowing of money, provided, in each ease, that (i) the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate actions or proceedings and (ii) the obligations secured by
such liens are not material in the aggregate;
(f) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of other for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties,
which are nicest for the conduct of the activities of the Company and its
Consolidated Subsidiaries or which customarily exist on properties of
38
corporations enacted in similar activities and similarly situated and which do
not in any event materially impair their use in the operation of the business of
the Company and its Consolidated Subsidiaries;
(g) mortgages, liens or security interests (i) securing Indebtedness
of a Consolidated Subsidiary (other than a Principal Subsidiary) to the Company
or to another Consolidated Subsidiary (other than a Principal Subsidiary) or
(ii) securing Indebtedness of a Principal Subsidiary to the Company or to
another Principal Subsidiary;
(h) mortgages, conditional sale contracts, security interests or other
arrangements for the retention of title (Including Capitalized Leases) existing
of the date of this Indenture and described in Annex B to Exhibit E attached to
the Note Agreements securing Funded Indebtedness of the Company or any
Consolidated Subsidiary outstanding on such date;
(i) mortgages, conditional sale contracts, security interests or other
arrangements for the retention of title (including Capitalized Leases) incurred
after the date hereof given to secure the payment of the purchase price incurred
in connection with the acquisition of fixed assets useful and intended to be
used in carrying on the business of the Company or a Consolidated Subsidiary,
including liens existing on such fixed assets at the time of acquisition thereof
or at the time of acquisition by the Company or a Consolidated Subsidiary of any
business entity then owning such fixed assets, whether or not such existing
liens were given to secure the payment of the purchase price of the titled
assets to which they attach so long as they were not incurred, extended or
renewed in contemplation of such acquisition, provided that (i) the lien or
charge shall attach (A) solely to the property acquired or purchased and (B)
within 120 days of the incurrence of the Indebtedness secured thereby, (ii) at
the time of acquisition of such fixed assets the aggregate amount remaining
unpaid on all Indebtedness secured by liens on such fixed assets whether or not
assumed by the Company or a Consolidated Subsidiary shall not exceed an amount
equal to 100% of the lesser of the total purchase price or fair market value at
the time of acquisition of such fixed assets (as determined in good faith by the
Board of Directors of the Company), and (iii) all such indebtedness shall have
been incurred within the applicable limitations provided in section 3.18;
(j) liens on accounts receivable of Consolidated Subsidiaries other
than Principal Subsidiaries securing Current Indebtedness to banks incurred for
39
working capital purposes, provided no such lien shall be granted or imposed
(with or without the Consent of the Consolidated Subsidiary concerned) if after
giving effect thereto any Default or Event of Default shall hare occurred and be
continuing;
(k) mortgages (but not by Principal Subsidiaries) associated with
construction loans or permanent financing on new developments or facilities
acquired after the date of this Indenture; prodded that (i) all Indebtedness
secured by such mortgages is incurred in compliance with the applicable
limitations contained in section 3.18, (ii) the lien of such mortgages shall
attach within 120 days of the incurrence of the Indebtedness secured thereby and
(iii) the aggregate amount of all indebtedness secured by such mortgage shall
not exceed an amount equal to (A) in the case of the acquisition of any such
facilities, 75% of the lesser of the total purchase price or fair market value
at the time of acquisition of such facilities (as determined in good faith by
the Board of Directors of the Company) or (B) in the case of the construction of
any such facilities, 100% of the lesser of the total construction cost or fair
market value at the time of construction of such facilities (as determined in
good faith by the Board of Directors of the Company);
(l) liens in addition to the liens permitted by the preceding clauses
(a) through (k), inclusive, securing Funded Indebtedness of the Company or any
Consolidated Subsidiary, provided that (i) all Funded Indebtedness secured by
such liens shall be incurred in compliance with the applicable limitations
contained in section 3.18 and (ii) the aggregate amount of all Funded
Indebtedness secured by such liens at any one time outstanding shall not exceed
15% of Consolidated Tangible Net Worth; and
(m) any extension, renewal or replacement of any lien permitted by the
preceding section 3.19(b) and (h) through (1), inclusive, in respect of the same
property theretofore subject to such lien, incurred in connection with the
extension, renewal or refunding of the Indebtedness secured thereby which is
permitted by the limitations contained in section 3.18, provided that the
principal amount of Indebtedness extended, renewed or refinanced does not exceed
the outstanding principal amount of such Indebtedness at such time.
Section 3.20. Dividends, Stock Purchases, Consolidated Investments.
The Company will not, and shall not permit any Subsidiary to, except as
hereinafter provided:
40
(a) declare or pay any dividends, either in cash or property, on any
shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of capital stock of the Company); or
(b) directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any warrants,
rights or options to purchase or acquire any shares of its capital stock (other
than in exchange for or out of the net cash proceeds to the Company from the
substantially concurrent issue or sale of other shares of capital stock of the
Company or warrants, rights or options to purchase or acquire any shares of its
capital stock); or
(c) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock; or
(d) make any Restricted Investment;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, Restricted
Investments, and all such other distributions being herein collectively called
"Restricted Payments" unless at the time of such Restricted Payment and after
giving effect thereto (i) no Default or Event of Default shall have occurred and
be continuing, (ii) Consolidated Funded Indebtedness shall not exceed 70% of
Total Capitalization, (iii) the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow shall not exceed 4.0 to 1, (iv) the Company would be
permitted to incur at least $1.00 of additional Funded Indebtedness under the
provisions of section 3.18(a)(6) and (v) the aggregate amount of Restricted
Payments made during the fiscal year in question would not exceed an amount
equal to 50% of Consolidated Net Income for the immediately preceding fiscal
year (or if such Consolidated Net Income is a deficit figure, then no Restricted
Payments shall be made during the fiscal year in question).
Notwithstanding the limitations of this section 3.20, the Company may
(A) pay or declare the regular fixed dividends on shares of its Preferred Stock
outstanding as of December 31, 1989 and remaining outstanding thereafter;
provided that (i) at the time of such payment or declaration and after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing and (ii) all such payments or declarations shall be included in all
computations of Restricted Payments for all other purposes and (B) redeem
capital stock of Gulf Coast Treatment Center, Inc. owned as of the date of this
41
Indenture by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇; provided that (i) at the time of redemption and
after giving effect thereto no Default or Event of Default with respect to the
payment of any principal, interest or premium on or in respect of the Notes
shall have occurred and be continuing and (ii) all such redemptions shall be
included in all computations of Restricted Payments for all other purposes.
The Company will not declare any dividend which constitutes a
Restricted Payment payable more then 60 days after the date of declaration
thereof.
For the purposes of this section 3.20 the amount of any Restricted
Payment declared, paid or distributed in property of the Company shall be deemed
to be the greater of the book value or fair market value (as determined in good
faith by the Board of Directors of the Company) of such property at the time of
the making of the Restricted Payment in question.
Section 3.21. Mergers, Consolidations and Sales of Assets.
(a) Subject to section 3.21(e) hereof, the Company will not, and will
not permit any Consolidated Subsidiary to, (i) consolidate with or be a party to
a merger with any other corporation or (ii) sell, lease or otherwise dispose of
all or any substantial part (as defined in paragraph (d) of this section 3.21)
of the assets of the Company and its Consolidated Subsidiaries, provided,
however, that:
(1) any Consolidated Subsidiary may merge or consolidate with or into
the Company or any Consolidated Subsidiary so long as (i) in any merger or
consolidation involving the Company, the Company shall be the surviving or
continuing corporation, (ii) at the time of such consolidation or merger and
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing and (iii) after giving effect to such consolidation or merger
the Company would be permitted to incur at least $1.00 of additional Funded
Indebtedness under the provisions of section 3.18(a)(6); and
(2) the Company may consolidate or merge with any other corporation if
(i) such surviving or acquiring entity is a U.S. corporation, (ii) such
surviving or acquiring entity expressly assumes all obligations of the Company
under the Notes and under this Agreement by written instrument reasonably
satisfactory in form and substance to the Required Holders, (iii) at the time of
such consolidation or merger and after giving effect thereto no Default or Event
42
of Default shall have occurred and be continuing, and (iv) after giving effect
to such consolidation or merger the Company would be permitted to incur at least
$1.00 of additional Funded Indebtedness under the provisions of section
3.18(a)(6).
(b) Subject to section 3.21(e) hereof, the Company will not permit any
Consolidated Subsidiary to issue or sell any shares of stock of any class
(including as "stocks" for the purpose of this section 3.22, any warrants,
rights or options to purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of such Consolidated Subsidiary to
any Person other than the Company or a Wholly-owned Consolidated Subsidiary,
except for the purpose of qualifying directors, or except in satisfaction of the
validly pre-existing preemptive rights of minority shareholders in connection
with the simultaneous issuance of stock to the Company and/or a Consolidated
Subsidiary whereby the Company and/or such Consolidated Subsidiary maintain
their same proportionate interest in such Consolidated Subsidiary.
(c) Subject to section 3.21(e) hereof, the Company will not sell,
transfer or otherwise dispose of any shares of stock in any Consolidated
Subsidiary (except to qualify directors) or any Indebtedness of any Consolidated
Subsidiary, and will not permit any Consolidated Subsidiary to sell, transfer or
otherwise dispose of (except to the Company or a Wholly-owned Consolidated
Subsidiary) any shares of stock or any Indebtedness of any other Consolidated
Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition, all
shares of stock and all Indebtedness of such Consolidated Subsidiary at the time
owned by the Company and by every other Subsidiary shall be sold, transferred or
disposed of as an entirety;
(2) the Board of Directors of the Company shall have determined, as
evidenced by a resolution thereof, that the retention of such stock and
Indebtedness is no longer in the best interests of the Company;
(3) such stock and Indebtedness Is sold, transferred or otherwise
disposed of to a Person, for a cash consideration and on terms reasonably deemed
by the Board of Directors to be adequate and satisfactory;
(4) the Consolidated Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Subsidiary not being
simultaneously disposed of; and
43
(5) such sale or other disposition does not involve a substantial part
(as hereinafter defined) of the assets of the Company and its Consolidated
Subsidiaries.
(d) As used in this section 3.21, a sale, lease or other disposition
of assets shall be deemed to be a "substantial part" of the assets of the
Company and its Consolidated Subsidiaries only if (i) the book value of such
assets, when added to the book value of all other assets sold, leased or
otherwise disposed of by the Company and its Consolidated Subsidiaries (other
then in the ordinary course of business) during the immediately preceding
twelve-month period exceeds 10% of the Consolidated Net Tangible Nets of the
Company of its Consolidated Subsidiaries determined as of the end of the
immediately preceding fiscal year or (ii) the assets referred to in the
foregoing clause (i) contributed more than 10% of the Consolidated Net Income of
the Company and its Consolidated Subsidiaries for the Immediately preceding
twelve-month period; provided, however, that the sale or other disposition of
any one hospital facility in any twelve-month period which (A) has a book value
in excess of 10% of the Consolidated Net Tangible Assets of the Company and its
Consolidated Subsidiaries determined as of the end of the immediately preceding
fiscal year or contributed more than 10% of the Consolidated Net Income of the
Company and its Consolidated Subsidiaries for the immediately preceding
twelve-month period and (B) constitutes security for the obligations outstanding
under the Credit Agreement shall not be included in any computation of sales or
other dispositions hereunder.
(e) The Company will not, and will not permit any Consolidated
Subsidiary to, (1) sell, lease or otherwise dispose of any asset mortgaged or
pledged pursuant to the Mortgages or the Pledge Agreements or otherwise
constituting security for the Notes or (ii) sell or otherwise dispose of any
receivables for consideration less than the stated value thereof.
Section 3.22. Guaranties. The Company will not, and will not permit
any Consolidated Subsidiary to, become or be liable in respect of any Guaranty
except Guaranties of the Company which are limited in amount to a stated maximum
dollar exposure and included in Current Indebtedness or Consolidated Funded
Indebtedness
Section 3.23. Repurchase of Notes. Neither the Company nor any
Consolidated Subsidiary or Affiliate, directly or indirectly, may repurchase or
44
make any offer to repurchase Notes of either class (Senior Secured Notes or
Subordinated Secured Notes) unless the offer has been made to repurchase Notes
of such class, pro rata, from all holders of the Notes of such class at the same
time and upon the same terms. In case the Company repurchases any Notes, such
Notes shall thereafter be cancelled and no Notes shall be issued in substitution
therefor.
Section 3.24. Transactions with Affiliates. (a)The Company will not,
and will not permit any Consolidated Subsidiary to, enter into or be a party to
any transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except (i) transactions in
the ordinary course of and pursuant to the reasonable requirements of the
Company's or such Consolidated Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Consolidated
Subsidiary than would obtain in a comparable arm's-length tradition with a
Person other than an Affiliate and (ii) the Personnel end Facility Sharing
Agreement, dated of March 31, 1988, between the Company and Ramsay Corporation
pursuant to which the Company receives fees in exchange for management services
provided to River West Medical Center. The Company shall provide prior mitten
notice to each holder of any Note of any transaction or arrangement with any
Affiliate having a value in excess of $100,000.
(b) The Company will not, and will not permit any Consolidated
Subsidiary to, pay any management fees to any Affiliate during any fiscal year
unless the aggregate amount of all management fees paid by the Company and its
Consolidated Subsidiaries during such fiscal year shall not exceed the sum of
(i) $600,000 plus (ii) the Inflation Factor. For purposes of this section 3.24,
the "Inflation Factor" shall mean $O for the fiscal years ending June 30, 1990
and June 30, 1991 and for any fiscal year thereafter shall mean an amount equal
to the product of (A) the lesser of the Consumer Price Index and 10% multiplied
by (B) the aggregate amount of management fees paid by the Company and its
Consolidated Subsidiaries during the immediately preceding fiscal year.
Section 3.25. Investments. The Company will not, and will not permit
any Consolidated Subsidiary to, make any investments in or loans, advances or
extension of credit to, any Person, except:
45
(a) investments, loans and advances by the Company and its
Consolidated Subsidiaries in and to Consolidated Subsidiaries, including any
investment in a corporation engaged in the brained of operating psychiatric
hospitals in the United States which, after giving effect to such investment,
will become a Consolidated Subsidiary; provided that, at the time of such
investment and after giving effect thereto and to the application of the
proceeds thereof, no Default or Event of Default shall have occurred and be
continuing, and provided further, that no Principal Subsidiary shall make any
investment in any entity other than the Company or another Principal Subsidiary.
(b) investments in commercial paper maturing in 270 days or less from
the date of issuance which, at the time of acquisition by the Company or any
Consolidated Subsidiary, is rated A-1 or higher by Standard & Poor's
Corporation, P-1 or higher by ▇▇▇▇▇'▇ Investors Service, Inc. or an equivalent
rating by any other nationally recognized credit rating agency of similar
standing;
(c) investments in direct obligations of the United States of America,
or any agency thereof, maturing in twelve months or less from the date of
acquisition thereof;
(d) investments in certificates of deposit maturing within one year
from the date of origin, issued by (i) a Bank or trust company organized under
the laws of the United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $300,000,000 or (ii)so long as it has
capital, surplus and undivided profits aggregating at least $300,000,000 and is
rated A-3 or higher by Standard & Poor's Corporation, A- or higher by ▇▇▇▇▇'▇
Investors Service, Inc. or an equivalent rating by any other nationally
recognized credit rating agency of similar standing, Hibernia National Bank;
(e) loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of the Company or
any Consolidated Subsidiary;
(f) receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Consolidated Subsidiaries;
(g) Investments in The ▇▇▇▇▇▇▇ Pavilion, a joint venture between the
Company and ▇▇▇▇▇▇▇ General Hospital, in an aggregate amount not to exceed
$2,635,000; and
46
(h) Restricted Investments permitted by section 3.20 hereof.
In valuing any investments, loans and advances for the purpose of
applying the limitations set forth in this section 3.25, such investments, loans
and advances shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation therein, but less any
amount repaid or recovered on account of capital or principal
For purposes of this section 3.25, at any time when a corporation
becomes a Consolidated Subsidiary, all investments of such corporation at such
time shall be deemed to have been made by such corporation, as a Consolidated
Subsidiary, at such time.
Section 3.26. Termination of Pension Plans. The Company will not, and
will not permit any Subsidiary to, permit any employee benefit plan maintained
by it to be terminated in a manner which could result in the imposition of a
lien on any property of the Company or any Subsidiary pursuant to Section 4068
of ERISA.
Section 3.27. Reports and Rights of Inspection. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with generally accepted principles of accounting consistently
maintained (except for changes disclosed in the financial statements furnished
to you pursuant to this section 3.27 and concurred in by the independent public
accountants referred to in section 3.27(b) hereof) and will furnish to each
holder of any Note each other institutional holder of the then outstanding Notes
and the Trustee (in duplicate if so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any event within
50 days after the end of each quarterly fiscal period (except the last) of each
fiscal year, duplicate copies of:
(1) consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of the close of such quarter setting forth in
comparative form the consolidated figures for the end of the preceding fiscal
year,
47
(2) consolidated statements of income and retained earning of the
Company and its Consolidated Subsidiaries for such quarterly period, setting
forth in comparative form the consolidated figures for the corresponding period
of the preceding fiscal year, and
(3) consolidated statements of cash flows of the Company and its
Consolidated Subsidiaries for the portion of the fiscal year ending with such
quarter setting forth in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
certified as complete and correct by an authorized financial officer of the
Company;
(b) Annual Statements. As soon as available and in any event within
105 days after the close of each fiscal year of the Company duplicate copies of:
(1) consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of the close of such fiscal year,
(2) consolidated statements of income and retained earnings and
cash flows of the Company and its Consolidated Subsidiaries for such fiscal
year,
(3) consolidated statements of income of the Company and in
Principal Subsidiaries for such fiscal year, and
(4) a budget for the Company and its Consolidated Subsidiaries
for the immediately succeeding fiscal year together with an analysis of (i)
changes in such budget from the budget prepared for the current fiscal year and
(ii) the variance of the projections made in the budget for the current fiscal
year from the actual budget for such fiscal year, in each case with respect to
items delivered pursuant to section 3.27(b)(1), (2) and (3) setting in
comparative form the consolidated figures for the preceding fiscal year, all in
reasonable detail and accompanied by a report thereon of a firm of independent
public accountants of recognized national standing selected by the Company to
the effect that the consolidated financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and present fairly, in all material respects, the financial condition of
the Company and its Consolidated Subsidiaries and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards and accordingly includes
such tests of the accounting records and such other auditing procedures as were
48
considered necessary to provide a reasonable basis for the opinion expressed in
the report;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of the
Company or any Consolidated Subsidiary;
(d) SEC and Other Reports. Promptly upon their becoming available, one
copy of each financial statement, report, notice or proxy statement sent by the
Company to stockholders generally and of each regular or periodic report, and
any registration statement or prospectus filed by the Company or any Subsidiary
with any securities exchange or the Securities and Exchange Commission or any
successor agency, and copies of any orders in any proceeding to which the
Company or any of its Subsidiaries is a party, issued by any governmental
agency, Federal or state, having jurisdiction over the Company or any of its
Subsidiaries;
(e) Requested Information. With reasonable promptness, such other data
and information as any holder of any Note may reasonably request;
(f) Officers Certificates. Within the periods provided in paragraphs
(a) and (b) above, a certificate of an authorized financial officer of the
Company stating, that such officer has reviewed the provisions of this Agreement
and setting forth (i) the information and computations (in sufficient detail)
required in order to establish whether the Company was in compliance with the
requirements of section 3.16 through section 3.26, inclusive, at the end of the
period covered by the financial statements then being furnished, and (ii)
whether there existed as of the date of such financial statements and whether,
to the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such financial
statements any Default or Event of Default and, if any such condition or event
exists on the date the certificate, specifying the nature and period of
existence thereof and the action the Company is taking and proposes to take with
respect thereto and stating whether the Company or any other Obligor has
received any notice of possible decertification under any medical reimbursement
program, including, but not limited to, Medicare, Medicaid and CHAMPUS;
(g) Accountants' Certificates. Within the period provided in paragraph
(b) above, a certificate of the accountants who render an opinion with respect
to such financial statements, stating that they have reviewed this Agreement and
49
stating further whether, in making their audit, such accountants have become
aware of any Default or Event of Default under any of the terms or provisions of
this Agreement insofar as any such terms or provisions pertain to or involve
accounting matters or determinations, and if any such condition or event then
exists, specifying the nature and period of existence thereof; and
(h) Annual Licensure Surveys. Not later than 30 days after receipt, a
copy of each annual licensure survey of the appropriate state offices of health
for each of the Hospitals.
Without limiting the foregoing, the Company will permit each Initial Purchaser,
the Trustee and each Institutional holder of the then outstanding Notes (or such
Persons as either an Initial Purchaser or such holder may designate), to visit
and inspect, under the Company's guidance, any of the properties of the Company
or any Subsidiary, to examine all their books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the Company
authorizes said accountants to discuss with the Initial Purchasers, the Trustee
or any such holder the Finances and affairs of the Company and its Subsidiaries)
all at such reasonable times and as often as may be reasonably requested. The
Company shall not be required to pay or reimburse the Initial Purchasers, the
Trustee or any such holder for expenses which the Initial Purchasers, the
Trustee or any such holder may Incur in connection with any such visitation or
inspection unless such visitation or inspection is made by the Initial
Purchasers, the Trustee or any such holder in response to the occurrence of a
Default or an Event of Default.
Section 3.28. Amendment and Modification of Credit Agreement and Other
Documents. The Company will not, and will not permit any Subsidiary to, directly
or indirectly, amend, modify or supplement any term, provision or condition of
(i) the Credit Agreement or any document ancillary or related thereto or (ii)
any agreement, document, instrument or notes evidencing any existing or future
Subordinated Funded Indebtedness without the prior written consent of the
Required Holders
Section 3.29. Prepayment of Certain Subordinated Funded Indebtedness.
The Company will not, and will not permit any Subsidiary to, (i) make any
principal payment on the Subordinated Convertible Promissory Note or (ii) make
50
any principal payment on the Subordinated Promissory Note prior to April 1, 2000
except with the proceeds from (A) the issuance of the Subordinated Funded
Indebtedness permitted by section 3.18(a)(13) or (B) an offering of common stock
of the Company.
Section 3.30. Environmental Evaluation and Remediation. Upon written
direction from the Required Holders, the Company will promptly employ ▇▇▇▇ ▇.
▇▇▇▇ Associates, Inc. (or other independent professional engineering firm
acceptable to such Required Holders) ("Environmental Engineers") to promptly
conduct a ground water study of all potential groundwater contamination at
Cumberland Hospital. If such study indicates groundwater contamination, the
Company agrees that it will upon written direction from the Required Holders,
immediately engage Environmental Engineers to promptly take the step necessary
to remediate such contamination. All fees and expenses in connection with such
study and remediation shall be paid by the Company. After such remediation has
been completed, the Company shall deliver to each holder of an outstanding Note
a copy of a clearance audit prepared by Environmental Engineers, which audit
shall attest to the effective remediation of such contamination.
Section 3.31. Interest Rate Protection Agreements. Within 60 days
following the Closing Date, the Company shall have provided to each Purchaser
evidence that the borrowers under the term loan facility provided in the Credit
Agreement have entered into interest rate protection agreements with one or more
of the lenders under the Credit Agreement or with other financial institutions
reasonably acceptable to the Purchasers, providing for an interest rate cap for
not less than 75% of the loans outstanding under such term loan facility or a
swap of not less than 50% of the loans outstanding under such term loan
facility.
SECTION 4. POSSESSION, USE AND RELEASE OF PROPERTY.
Section 4.1. Obligors' Right of Possession. Provided no Default or
Event of Default has occurred and is continuing, the Oblivious shall be suffered
and permitted to remain in full possession, enjoyment and control of the
Mortgaged Property, subject always to the observance and performance of the
terms of this Indenture, the Note Agreements, the Pledge Agreements and the
Mortgages.
Section 4.2. Release of Mortgaged Property. (a) So long as no Event of
Default has occurred and is continuing, the Obligors (other than the Company)
shall be permitted to make dispositions of certain Property upon compliance with
section 3.1 of the applicable Mortgage.
51
(b) The Trustees shall release any Mortgaged Property taken by eminent
domain or sold in anticipation of a taking by eminent domain upon compliance by
the Obligor then owning such Property with the provisions of section 3.2 of the
Mortgage.
(c) In addition to the sale and release of Mortgaged Property pursuant
to section section 4.2(a) and (b), the Obligor then owning such Property may
sell or otherwise dispose of any Mortgaged Property" then subject to the Lien of
this Indenture and any of the Mortgages or any indenture supplemental hereto,
and the Trustees shall release the same from the Lien hereof or thereof to the
extent and on the terms and upon compliance with the conditions provided for in
any written consent given thereto at any time or from time to time by the holder
or holders of all of the then outstanding Notes.
SECTION 5. PREPAYMENT OF LOANS.
Section 5.1. Prepayments and Manner Thereof. Except to the extent
provided for in this section 5, the Notes shall not be subject to prepayment or
redemption in whole or in part at the option of the Obligors prior to the
expressed maturity dates thereof. Every prepayment of Notes shall be made in
accordance with the provisions of this section 5.
Section 5.2. Mandatory Prepayment. (a) The Obligors agree that they
will prepay the Senior Secured Notes at 100% of the principal amount of the
Senior Secured Notes to be prepaid on March 31 and September 30 of each of the
years and in the principal amount as follows:
Prepayment Principal Prepayment Principal
Date Amount Date Amount
------------------ ------------ --------------------- -------------
March 31, 1993 $2,825,000 March 31, 1997 $3,531,250
September 30, 1993 2,825,000 September 30, 1997 3,531,250
March 31, 1994 2,825,000 March 31, 1998 3,531,250
September 30, 1994 2,825,000 September 30, 1998 3,531,250
March 31, 1995 3,531,250 March 31, 1999 5,650,000
September 30, 1995 3,531,250 September 30, 1999 5,650,000
March 31, 1996 3,531,250
September 30, 1996 3,531,250
52
(b) Subject to section 10 hereof, the Obligors agree that they will
prepay the Subordinated Secured Notes at 100% of the principal amount of the
Subordinated Secured Notes to be prepaid on March 31 and September 30 of each of
the years and in the principal amounts as follows:
Prepayment Principal Prepayment Principal
Date Amount Date Amount
---------------------- ------------- ------------------- ------------
March 31, 1994 $230,769.2 March 31, 1997 $230,769.23
September 30, 1994 230,769.2 September 30, 1997 230,769.23
March 31, 1995 230,769.2 March 31, 1998 230,769.23
September 30, 1995 230,769.2 September 30, 1998 230,769.23
March 31, 1996 230,769.2 March 31, 1999 230,769.23
September 30, 1996 230,769.2 September 30, 1999 230,769.23
(c) Subject to section 10 hereof, the Obligors agree that they will
pay the entire unpaid principal amount of the Notes at maturity on March 31,
2000. Prepayment of less than all of the Notes pursuant to the provisions of
section 5.3, or section 5.4 shall not relieve the Obligors of their obligation
pursuant to this section 5.2.
Section 5.3. Optional Prepayment in the Event of Casualty or
Condemnation. The Notes may be prepaid at any time prior to maturity, in whole
or in part, through the application of moneys received by the Trustee pursuant
to the provisions of section 3.1(b) or section 4.1 of any Mortgage upon payment
of the principal amount of the Notes so to be prepaid and accrued interest
thereon to the date of prepayment, together with a premium equal to the
Yield-Maintenance Premium.
Section 5.4. Optional Prepayment With Premium. In addition to the
right of prepayment set forth in section 5.3, the Obligors shall have the
privilege of prepaying either the Senior Secured Notes or the Subordinated
Secured Notes, or both, at any time, either in whole or in part (but if in part
in units of $100,000 or an integral multiple of $10,000 in excess thereof) by
payment of the principal amount of such Notes or the portion thereof to be
prepaid, and accrued interest thereon to the date of prepayment, together with a
premium equal to the Yield-Maintenance Premium.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to section 5.3, section 5.4 or
section 5.5 hereof (any partial prepayment being applied in satisfaction of
required payments of principal in inverse order of their scheduled due dates) or
53
is declared to be immediately due and payable pursuant to section 6.2 hereof, as
the context requires.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on a semiannual
basis) equal to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 A.M. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Tolerate Service (or such other display as may replace Page
678 on the Tolerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of with time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
▇▇▇▇ quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported yields.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
54
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with react to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
section 5.3, section 5.4 or section 5.5 hereof or is declared to be immediately
due and payable pursuant to section 6.2 hereof, as the context requires.
"Yield-Maintenance Premium" shall mean with respect to any Note, a
premium equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Premium shall in no
event be less than zero.
Section 5.5. Prepayment on Charge in Control. (a) In the event that a
Change in Control Date shall occur, the Company will give immediate written
notice (a "Company Notice") of such fact to the Trustee and all holders of the
Notes. The Company Notice shall (i) describe the facts and circumstances of such
Change in Control in reasonable detail, (ii) refer to this section 5.5 and the
rights of the holders of the Notes to require prepayment of their Notes on the
terms and conditions provided for herein, (iii) contain an offer by the Obligors
to prepay all of the outstanding Notes in full together with accrued interest to
the date of prepayment and a premium equal to the Yield-Maintenance Premium, and
(iv) set forth the date, which shall be not less than 30 nor more than 60 days
following the date of the Company Notice, on which the Obligors will make such
prepayment. Each holder of the Notes shall have the right to accept such offer
and require prepayment of the Notes held by such holder in full by written
notice to the Company given within 30 days following receipt of the Company
Notice. The Obligors shall on the prepayment date set forth in the Company
Notice prepay all Notes held by holders who have accepted such offer of
prepayment.
(b) In the event the Company fails to give the Company Notice as
required above, upon the occurrence of a Change in Control Date, each holder of
Notes shall have the right to require the Obligors to prepay such holder's Notes
in full together with accrued interest thereon to the date of prepayment and a
premium equal to the Yield-Maintenance Premium. Notice of a required prepayment
55
pursuant to this section 5.5(b) shall be delivered by any holder of Notes to the
Company not more than 30 days after such holder has actual knowledge of such
Change in Control Date. The date of such prepayment shall be the same date as
the Change in Control Date or, in the event the Change in Control Data shall
have occurred prior to receipt of the notice from a Noteholder, then such
prepayment together with accrued interest and a premium equal to the
Yield-Maintenance Premium, if any, thereon shall be on the date designated in,
and shall be not less than 30 nor more than 60 days following the date of, such
holders notice.
"Acquiring Person" shall mean any Person or group of two or more
Persons acting as a partnership, limited partnership, syndicate, or other group
for the purpose of acquiring, holding or disposing of Voting Stock of the
Company, together with all affiliates and associates (as defined in Rule 12b-2
under the Securities and Exchange Act of 1934, as amended) of such Persons.
"Change in Control" means any event after the occurrence of which an
Acquiring Person other than The ▇▇▇▇ ▇▇▇▇▇▇ Group of Sydney, Australia owns more
than 50% (by number of votes) of the Voting Stock of the Company.
"Change in Control Date" shall mean any date upon which a Change in
Control shall have occurred.
Section 5.6. Notice of Prepayments. The Company will give written
notice of any prepayment of any of the Notes pursuant to the provisions of
section 5.3, section 5.4 or section 5.5 to each holder of the Notes (with a copy
to the Trustee) not less than 30 days nor more than 60 days before the date
fixed for such prepayment specifying (a) such date, (b) the section of this
Indenture and/or the applicable Mortgage under which the prepayment is to be
made, (c) the aggregate principal amount of all Notes to be prepaid on such date
and the principal amount of the holder's Notes to be prepaid on such date, (d)
the accrued interest applicable to the prepayment, and (e) whether any premium
may be payable in connection with such prepayment. Such notice of prepayment
shall also certify all facts which are conditions precedent to any such
prepayment. Notice of prepayment having been so given, the aggregate principal
amount of the Notes specified in such notice, together with premium, if any, and
accrued interest thereon shall become due and payable on the prepayment date. In
the event of any prepayment in accordance with the provisions of section 5.3,
section 5.4 or section 6.2, on or prior to the prepayment date, the Company
shall provide the Trustee and each holder of the Notes written notice of the
56
amount of the premium payable in connection with such prepayment, whether or not
any premium is payable, together with a reasonably detailed calculation thereof.
The Trustee shall have no responsibility to verify any such calculation.
In the event that the Company shall have given written notice in
accordance with the provisions of this section 5.6 of any prepayment of any of
the Notes pursuant to the provisions of section 5.4 and shall fail to make such
prepayment on the date specified in such notice for such prepayment, the Company
promptly shall pay to each holder of Notes an amount equal to any costs and
expenses incurred by any such holder in reliance on any such notice of
prepayment.
Section 5.7. Allocation of Prepayments. (a) The aggregate principal
amount of each optional partial prepayment of the Notes shall be made in units
of $1,000 or multiples thereof. Partial prepayments shall be credited in each
case first, against the final maturity of the Notes being prepaid and then,
against the required prepayments on such Notes in the inverse order of the
maturities thereof.
(b) In any case of the partial prepayment of Notes of either class
pursuant to section 5.2, section 5.3 or section 5.4, the aggregate principal
amount of the Notes of such class to be prepaid shall be allocated to each
holder of such Notes in the same proportion as the principal amount of the Notes
of such class of such holder bears to the aggregate principal amount of all
Notes of such class then outstanding.
SECTION 6. REMEDIES OF THE TRUSTEES AND THE NOTEHOLDERS.
Section 6.1. Definition of Event of Default; Acceleration of Maturity.
The following events are hereby defined for all purposes of this Indenture as
"Events of Default":
(a) if default shall be made in the payment of any interest payment on
any Note when and as the same shall become due and payable and any such default
shall continue for five days; or
(b) if default shall be made in the payment of any required prepayment
on any of the Notes as provided in section 5.2; or
(c) if default shall be made in the payment of the principal of any
Note or the premium thereon at the expressed or any accelerated maturity date or
at any date fixed by this Indenture for mandatory prepayment; or
57
(d) if any representation or warranty of any of the Obligors set forth
in this Indenture, the Note Agreements, any Pledge Agreement or any Mortgage or
in any certificate delivered pursuant hereto or thereto or in any notice,
certificate, demand or request delivered to the Trustees or any holder of Notes
pursuant to this Indenture, the Note Agreements, any Pledge Agreement or any
Mortgage shall prove to be false or misleading in any material respect as of the
time when the same shall have been made; or
(e) If default shall be made in the due observance or performance of
any covenant or agreement contained in section 3.5 or section 3.8 and such
default shall have continued for 30 days after the earlier of (i) the giving of
notice of such default by the Obligors to the Trustee in accordance with section
3.10 or (ii) receipt of written notice thereof by the Obligors; or
(f) if default shall be made in the due performance or observance of
any covenant or agreement contained in section 3.16 through section 3.26,
inclusive, hereof; or
(g) if the Company or any Consolidated Subsidiary defaults in any
payment of principal of or interest on any other obligation for money borrowed
(or any obligation under any Capitalized Lease, any obligation under a
conditional sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided with
respect thereto, or the Company or any Consolidated Subsidiary fails to perform
or observe any other agreement, term or condition contained in any agreement
under which any such obligation is created (or if any other event thereunder or
under any such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause, such
obligation to become due prior to any stated maturity, provided that the
aggregate amount of all obligations as to which such a payment default shall
occur and be continuing or such a failure or other event causing or permitting
acceleration shall occur and be continuing exceeds $1,000,000; or
(h) if default shall be made in the due observance or performance of
any other covenant, condition or agreement of the Obligors contained herein or
in the Note Agreements, the Notes, any Pledge Agreement or any Mortgage, and
58
such default shall have continued for 10 days after any Obligor shall have
knowledge of such default; or
(i) if any Obligor becomes insolvent or bankrupt, is generally not
paying its debts as they become due or makes an assignment for the benefit of
creditors, or any Obligor causes or suffers an order for relief to be entered
with respect to it under applicable Federal bankruptcy law or applies for or
consents to the appointment of a custodian, trustee or receiver for any Obligor
or for the major part of its Properties; or
(j) if any decree or order for relief in respect of any Obligor is
entered under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(k) If any Obligor petitions or applies to any tribunal for, or
consents to, the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of any Obligor, or of any substantial
part of the assets of any Obligor, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceeding (other than proceedings
for the voluntary liquidation and dissolution of an Obligor) relating to any
Obligor under the Bankruptcy Law of any other jurisdiction; or
(l) if any such petition or application is filed, or any such
proceedings are commenced, against any Obligor and such Obligor by any act
indicates its approval thereof, consent thereto or acquiescence therein, or an
order, judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition in any such
proceeding and such order, judgment or decree remains unstayed and in effect for
more than 30 days; or
(m) any order, judgment or decree is entered in any proceedings
against any Obligor decreeing the dissolution of such Obligor and such order,
judgment or decree remains unstayed and in effect for more than 60 days; or
(n) if final judgment or judgments for the payment of money in excess
of $100,000 is or are outstanding against any Obligor or against any of its
property or assets and any one of such judgments has remained unpaid, unvacated,
59
unbonded and unstayed by appeal or otherwise for a period of 30 days after the
date of its entry; or
(o) if the Company shall default (after the expiration of any
applicable grace periods) in the due and punctual observance and performance of
its agreements and undertakings set forth in the Warrants issued to the original
purchasers of the Subordinated Secured Notes pursuant to the Note Agreements, or
any such Warrant shall be held by a court or competent jurisdiction to be
invalid or unenforceable in any material respect; or
(p) if the Company or any Consolidated Subsidiary defaults in any
payment of principal of or interest on any other obligation for money borrowed
(or any obligation under any Capitalized Lease, any obligation under a
conditional sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided with
respect thereto and the effect of such default is to cause such obligation to
become due prior to any stated maturity, or the Company or any Consolidated
Subsidiary fails to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is created (or if any
other event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause such
obligation to become due prior to any stated maturity, provided that the
aggregate amount of all obligations as to which such a payment default shall
occur and be continuing or such a failure or other event causing acceleration
shall occur and be continuing exceeds $1,000,000.
Section 6.2. Acceleration of Note Obligations.
(a) If any Event of Default described in paragraphs (a) through (h) or
paragraph (n) of section 6.1 hereof exists, upon written request of the holder
or holders of at least 51% in aggregate principal amount of the Senior Secured
Notes then outstanding, the Trustee shall declare the entire principal of and
all interest accrued on and all other sums payable under all Senior Secured
Notes then outstanding to be, and such Notes shall thereupon become, or
(b) subject to the provisions of section 10 hereof, if any Event of
Default described in paragraphs (a) through (f) or paragraph (h), (n), (o) or
(p) of section 6.1 hereof exists, upon written request of the holder or holders
of at least 51% in aggregate principal amount of the Subordinated Secured Notes
60
then outstanding, the Trustee shall declare the entire principal and all
interest accrued on all Subordinated Secured Notes then outstanding to be, and
such Subordinated Secured Notes shall thereupon become, or
(c) if any Event of Default described in paragraph (i), (j), (k), (1)
or (m) of section 6.1 hereof shall have occurred, all outstanding Notes, without
any action on the part of the Trustee or of any holder of any Notes, shall be
forthwith,
due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Obligors,
and the Obligors will forthwith pay to the Trustee for the benefit of the holder
or holders of all the Notes which have so become due and payable the entire
principal of and interest accrued on and all other sums payable under such Notes
and, if the Notes have so become due and payable as a result of any Event of
Default described in section 6.1(a) through section 6.1(h), inclusive, section
6.1(n), section 6.1(o) or section 6.1(p), to the extent permitted by law, the
Yield-Maintenance Premium (as liquidated damages and not as a penalty), if any,
applicable to such Notes; provided, that during the existence of an Event of
Default described in section 6.1(a), (b) or (c) and irrespective of whether the
Trustee shall have declared all the Notes of either class to be due and payable
pursuant to this section 6.2 (but subject to the provisions of section 10
hereof), any holder of the Notes with respect to which such default has occurred
which has not consented to any waiver with respect to such Event of Default may,
at its option, by notice in writing to the Obligors and the Trustee, declare the
Notes then held by such holder to be, and such Notes shall thereupon become,
forthwith due and payable together with all interest accrued thereon without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Obligors, and the Obligors shall forthwith pay to
the Trustee for the benefit of such holder of Notes the entire principal of and
interest accrued on and all other sums payable under such Notes and, to the
extent permitted by law, the Yield-Maintenance Premium, it any, as aforesaid, in
the event that any holder of Notes shall declare any Notes to become due and
payable pursuant to the provisions of this section 6.2, the Company shall
promptly, but in any event within five Business Days of such declaration,
deliver to each other holder of Notes and the Trustee written notice of such
declaration.
In case the Obligors shall fail to pay the same forthwith, the
Trustees, in their own name or as trustees of an express trust, shall be
entitled to recover judgment for the whole amount so due and unpaid against
61
the Obligators and/or any other obligor on the Notes. The right of the Trustees
to recover such judgment shall not be affected by the exercise of any other
right, power or remedy for the enforcement of the provisions of this Indenture.
The Trustees in their discretion may exercise in addition all other rights and
powers described herein as they may deem best for the protection and enforcement
of the interests and rights of the Trustees and of the holders of the Notes then
outstanding.
Section 6.3. Annulment of Acceleration of Note Obligation. If a
declaration of acceleration of maturity of the Notes of either class is made
pursuant to section 6.2 by the Trustee, then and in every such case, the holders
of 66-2/3% in aggregate principal amount of the Senior Secured Notes then
outstanding or, if no Senior Secured Notes are then outstanding, the holders of
66-2/3% in aggregate principal amount of the Subordinated Secured Notes then
outstanding may, by written instrument filed with the Company and the Trustee,
rescind and annul such declaration, and the consequences thereof; provided, that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to any Notes of either class or this Indenture;
(b) all arrears of interest upon all the Notes of all classes and all
other sums payable under the Notes and under this Indenture (except any
principal, interest, Yield-Maintenance Premium or premium on the Notes which has
become due and payable by reason of such declaration under section 6.2) shall
have been duly paid; and
(c) each and every other Default and Event of Default shall have been
waived pursuant to section 6.14 or otherwise made good or cured;
and, provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
Section 6.4. Suits for Enforcement; Power of Sale. In case of the
happening of an Event of Default, the Trustees from time to time in their
discretion may exercise, subject to section 10 hereof, in addition to all other
rights and powers described herein or permitted under applicable law, all or any
of the following powers as they may deem best for the protection and enforcement
of the interests and rights of the Trustees and of the holders of the Notes then
outstanding:
62
(a) the Trustees may in their own name and as trustees of an express
trust protect and enforce their rights and the rights of the holders of the
Notes by bringing such actions, at law or in equity or before any administrative
tribunal, as the Trustees, being advised by counsel, shall deem appropriate or
as they may be directed in writing by the Required Holders, including, without
limitation, actions for the specific performance of any covenant hereof, or of
the Notes, and for the foreclosure of any one or all of the Pledge Agreements or
any one or all of the Mortgages; and the Trustees shall be entitled, in their
own names and as trustees of an express trust, to recover judgment for any and
all sums then, or during any Default, becoming due and payable by the Obligors
under any provision hereof or of the Notes, the Pledge Agreements or Mortgages,
including, without limitation, any deficiency in the payment of all amounts due
under the provisions hereof or of the Notes, the Pledge Agreements or Mortgages,
remaining after any sale of the Mortgaged Property in foreclosure proceedings or
by virtue of the Trustees' power of sale or otherwise, and, in addition thereto,
such amounts as shall be sufficient to cover the costs and expenses of
collection, including attorneys' fees, and of other proceedings hereunder, and
to collect out of the Property of the Obligators in any manner provided by law
all amounts adjudged or decreed to be payable;
(b) the Trustees as a matter of contract right and not as a penalty
shall be entitled to the appointment of a receiver of, or may enter upon and
take possession of, all or any part of the Mortgaged Property and such receiver
or the Trustees shall thereupon be entitled to operate all or any part of the
Mortgaged Property and to make all expenditures and to take all actions
necessary or desirable therefor, and to collect and retain all income and
earnings arising from such Property or business; and
(c) the Trustees may, with or without entry as aforesaid, sell all or
any part of the Mortgaged Property at public or private sale, upon such notice,
in such manner, at such time or times, and upon such terms consistent with the
applicable laws of the respective States wherein such Mortgaged Property is
located, as the Trustees may determine.
Section 6.5. Remedies Under Mortgages; Foreclosure and Sale of
Mortgaged Property. (a) The Trustees, as Mortgagee, may exercise all or any of
the remedies under one or more of the Mortgages.
63
(b) In the event of any sale made under or by virtue of this
Indenture, whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or decree of foreclosure and sale, the whole of
the Mortgaged Property may be sold in one parcel and as an entirety, or in
separate parcels or lots, as the Trustees may reasonably determine, or as they
may be directed by the written direction of the Required Holders.
Sections 6.6. Adjournment of Sale. The Trustees may adjourn from time
to time any sale by them to be made under the provisions of this Indenture, by
announcement at the time and place appointed for such sale or for such adjourned
sale or sales; and, except as otherwise provided by law, the Trustees, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.
Section 6.7. Trustees May Execute Conveyances and Deliver Possession;
Sale a Bar. Upon the completion of any sale or sales made under or by virtue of
this Indenture, the Trustees shall execute and deliver to the accepted purchaser
or purchasers a good and sufficient deed, or good and sufficient deeds, and
other instruments conveying, assigning and transferring all their estate, right,
title and interest in and to the Properties, privileges and rights so sold. The
Trustees are hereby irrevocably appointed the true and lawful attorneys-in-fact
of the Obligors, in their names and stead or in the name of the Trustees, to
make all necessary conveyances, assignments, transfers and deliveries of the
premises and the Property, privileges and rights so sold and for that purpose
the Trustees may execute all necessary deeds and instruments of assignment and
transfer, and may substitute one or more Persons with like power, the Obligors
hereby ratifying and confirming all that their said attorneys or such substitute
or substitutes shall lawfully do by virtue hereof. Nevertheless, the Obligors,
if so requested in writing by the Trustees, shall ratify and confirm any such
sale or sales by executing and delivering to the Trustees or to such purchaser
or purchasers all such instruments as may be advisable, in the judgment of the
Trustees, for the purpose and as may be designated in such request.
Any such sale or sales made under or by virtue of this Indenture,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, shall
operate to divest all estate, right, title, interest, claim or demand
64
whatsoever, whether at law or in equity, of the Obligors, in and to the
premises, Property, privileges and rights so sold, and shall be a perpetual bar
both at law and in equity against any Obligor, its successors and assigns, and
against any and all Persons claiming or who may claim the same, or any part
thereof from, through or under any Obligor, its successors or assigns.
Section 6.8. Receipt Sufficient Discharge for Purchaser. The receipt
of the Trustee or of the court officer conducting any such sale for the purchase
money paid at any such sale shall be a sufficient discharge therefor to any
purchaser of the Property, or any part thereof, sold as aforesaid; and no such
purchaser or his representatives, grantees or assigns, after paying such
purchase money and receiving such receipt, shall be bound to see the application
of such purchase money upon or for any trust or purpose of this Indenture, or
shall be answerable in any manner whatsoever for any loss, misapplication or
non-application of any such purchase money or any part thereof, nor shall any
such purchaser be bound to inquire as to the necessity or expediency of any such
sale.
Section 6.9. Sale to Accelerate Notes. In the event of any sale made
under or by virtue of this Indenture, whether made under the power of sale
herein granted or under or by virtue of judicial proceeding or of a valid
judgment or decree of foreclosure and sale, the principal of the Notes, if not
previously due, immediately thereupon shall become due and payable, anything in
the Notes or in this Indenture to the contrary notwithstanding.
Section 6.10. Application of Proceeds of Sale. The proceeds of any
exercise of rights with respect to any Mortgaged Property, the proceeds and the
avails received by the Trustee upon the exercise by the Trustee of any of its
rights or remedies under this Indenture, shall be paid and applied, subject to
section 10 hereof, as follows:
(a) First, to the payment of all amounts then due to the Trustee for
advances made pursuant to section 3.9 hereof and then to the payment of costs
and expenses of foreclosure or suit, if any, and of such sale, and of all
compensation and other proper expenses, liability and advances, including legal
expenses and attorneys' fees, incurred or made hereunder by the Trustee, or the
holder or holders of the Senior Secured Notes (or, with the prior consent and
approval of the Required Holders, of any Subordinated Secured Notes), in
connection with the collection of any sums due on the Notes or in otherwise
evaluating, protecting, asserting, defending or enforcing any of their rights,
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including any bankruptcy or insolvency proceedings involving any Obligor, and of
all taxes, assessments or Liens superior to the Lien of this Indenture or any of
the Mortgages, except any taxes, assessments or other superior Lien subject to
which said sale may have been made;
(b) Second, to the payment of the principal, interest and
Yield-Maintenance Premium, if any, and all other sums then due and unpaid on all
Senior Secured Notes then outstanding, without preference or priority of any of
the foregoing items over any other or of any such Note over any other and, in
case such proceeds shall be insufficient to pay in full the whole amount of
principal, interest and Yield-Maintenance Premium and all other sums so due and
unpaid on such Senior Secured Notes so outstanding, then ratably among the holds
of all Senior Secured Notes outstanding according to the aggregate amounts due
respectively for principal, interest and Yield-Maintenance Premium, if any, on
each such Senior Secured Note;
(c) Third, to the payment of costs and expenses, including legal
expenses and attorneys' fees, incurred hereunder by the holder or holders of the
Subordinated Secured Notes;
(d) Fourth, to the payment of the principal, interest and
Yield-Maintenance Premium, if any, then due and unpaid on all Subordinated
Secured Notes then outstanding, without preference or priority of any of the
foregoing items over any other or of any such Note over any other and, in case
such proceeds shall be insufficient to pay in full the whole amount of
principal, interest and Yield-Maintenance Premium and all other sums so due and
unpaid on such Subordinated Secured Notes so outstanding, then ratably according
to the amounts due respectively for principal, interest and Yield-Maintenance
Premium, it any, on each such Subordinated Secured Note; and
(e) Fifth, to the payment of the surplus, if any, to the Obligors,
their successors and assigns, or to whomsoever may be lawfully entitled to
receive the same.
Section 6.11. Purchase of Trust Estate. Upon any sale made under or by
virtue of this Indenture, whether made under the power of sale herein granted or
under or by virtue of judicial proceeding or of a judgment or decree of
foreclosure and sale, the Trustees or any Noteholder or Noteholders may bid for
and purchase the Mortgaged Property being sold, and upon compliance with the
terms of sale, may hold, retain and possess and dispose of such Property in his
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or their own absolute right without further accountability; and, subject to
section 10 hereof, any purchaser at any such sale may, in paying the purchase
price, turn in any of the Notes in lieu of cash to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon. Said Notes,
in case the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the holders thereof after a notation of such
partial payment shall have been made thereon.
Section 6.12. Trustees Entitled to Appointment of Receiver. The
Obligors further covenant that upon the happening of any Event of Default and
thereafter during the continuance of such Event of Default unless the same shall
have been waived as hereinafter provided, the Trustees shall be entitled, as a
matter of right, if they shall so elect, (a) forthwith and without declaring the
principal of the Notes to be due and payable, or (b) after declaring the same to
be due and payable, or (c) upon the filing of a ▇▇▇▇ in equity to foreclose this
Indenture or to enforce the specific performance hereof or in aid thereof or
upon the commencement of any other judicial proceeding to enforce any right of
the Trustees or of the holders of the Notes, to the appointment of a receiver or
receivers of the Mortgaged Property and of all the earning, revenues, rents,
issues, profits and income thereof, with such powers as the court making such
appointment shall confer, which may comprise any or all of the powers which the
Trustees are authorized to exercise by the provisions of section 6.4(b). The
Obligors, if requested so to do by the Trustees, will consent to the appointment
of any such receiver as aforesaid.
Section 6.13. Trustees May Enforce Rights Without Notes. All rights of
action under this Indenture or under any of the Notes may be enforced by the
Trustees without the possession of any of the Notes and without the production
thereof at any trial or other proceedings relative thereto. Any such suit or
proceedings instituted by the Trustees shall be brought in their own names or as
Trustees, and any recovery of judgment shall be, subject to the rights of the
Trustees and subject to section 10 hereof, for the ratable benefit of the
holders of the Notes outstanding.
Section 6.14. Notice of Event of Default; Waiver. The Trustee shall
promptly after the earlier of (a) receipt of notice from the Obligors or the
holder of any Notes of the occurrence of a Default or Event of Default or (b)
obtaining actual knowledge of any Event of Default give notice thereof by
registered or certified mail, to the holders of all Notes at the time
outstanding. The Required Holders may waive any Default or Event of Default
hereunder and its consequences which result from the failure of the Obligors
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to comply with any provisions of this Indenture, compliance with which can be
waived by such holders pursuant to section 8.2; provided, however that a Default
in the payment of principal of or premium, if any, on any Notes called for
prepayment or interest on the Notes may be so waived but only if, prior to such
waiver, all arrears of principal, premium, if any, and interest, and all
expenses of the Trustees and of the holders of the Notes shall be paid or shall
be provided for by deposit with the Trustee of a sum sufficient to pay the same
and if no other Default or Event of Default shall have occurred and then be
continuing. In case of any such waiver, or in case any proceedings taken on
account of any such Default or Event of Default shall be discontinued or
abandoned or determined adversely to the Trustees, then and in every such case,
the Obligors, the Trustees and the holders of the Notes shall be restored to
their former positions and rights hereunder respectively. No such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
Section 6.15. Limitation on Noteholders' Right to ▇▇▇. No holder of
any Note shall have any right to institute any suit, action or proceeding at law
or in equity growing out of any provision of this Indenture, or for the
foreclosure or enforcement of this Indenture, unless and until an Event of
Default shall have happened and unless and until such holder shall have
previously given to the Trustee written notice of the occurrence of such Event
of Default and of the continuance thereof as above provided, and also (except as
hereinafter provided) unless and until the holders of at least 25% in principal
amount of the Senior Secured Notes then outstanding shall have made written
request upon the Trustees and shall have afforded to them a reasonable
opportunity to institute such action, suit or proceeding in their own names, and
unless also the Trustees shall have been offered security and Indemnity
satisfactory to them against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustees shall have neglected or refused to
institute any such action, suit or proceeding within a reasonable time after
receipt of such notification, request and offer of indemnity; and such
notification, request, offer of indemnity and refusal or neglect are hereby
declared in every such case to be conditions precedent to the institution by any
holder of the Notes of any such action, suit or proceeding; it being understood
and intended and being expressly covenanted by the holder of every Note with
every other holder and with the Trustees that no one or more holders of the
Notes shall be entitled to take any action or institute any such suit to enforce
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the payment of its Notes if and to the extent that the taking of such action or
the Institution or prosecution of any such suit or the entry of judgment therein
would under applicable law result in a surrender, impairment, waiver or loss of
the Lien of this Indenture upon the Mortgaged Property, or any part thereof, as
security for Notes held by any other holder of the Notes, or shall have any
right in any manner whatever to effect, disturb or prejudice the rights of the
holder of any other Notes, or to enforce any right hereunder, except in the
manner herein provided, and, subject to section 10 hereof, for the equal,
ratable and common benefit of all holders of the Notes. Subject to section 10
hereof, nothing in this section 6 or elsewhere in this Indenture or in the Notes
contained, however, shall affect or impair the obligation of the Obligors, which
is unconditional and absolute, to pay the principal of, and premium, if any, and
the interest on, the Notes to the respective holders of the Notes, in the manner
and at the time and places therein expressed, nor shall it affect or impair the
right of the holders of the Notes, by an action at law upon the promises to pay
therein contained, to enforce such payment.
Section 6.16. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Trustees or to the holders of the Notes is intended to be
exclusive of any other remedy or remedies, and each and every such remedy shall
be cumulative, and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute.
Section 6.17. Delay or Omission Not a Waiver. No delay or omission of
the Trustees, or of any holder of the Notes, to exercise any right or power
accruing upon any Default or Event of Default, shall impair any such right or
power, or shall be construed to be a waiver of any such Default or Event of
Default or an acquiescence therein; and every power and remedy given by this
Indenture to the Trustees or to the holders of the Notes may be exercised from
time to time and as often as may be deemed expedient by the Trustees or by the
holder of the Notes.
Section 6.18. Waiver of Extension, Appraisement, Stay Laws. The
Obligors will not at any time insist upon, or plead, or in any manner whatever
claim or take any benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
and terms of performance of this Indenture; nor claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for the
valuation or appraisement of the Mortgaged Property, or any part thereof, prior
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to any sale or sales thereof which may be made pursuant to any provision herein
contained, or pursuant to the decree, judgment or order of any court of
competent jurisdiction; nor after any such sale or sales, claim or exercise any
right under any statute heretofore or hereafter enacted by the United States of
America or by any state or territory, or otherwise, to redeem the Property so
sold or any part thereof; and the Obligors hereby expressly waive all benefits
or advantage of any such law or laws, and covenant not to hinder, delay or
impede the execution of any power herein granted or delegated to the Trustees,
but to suffer and permit the execution of every power as though no such law or
laws had been made or enacted.
Section 6.19. Control of Remedies by Noteholders. Notwithstanding any
other provision of this section 6, the Required Holders shall have the right, by
an instrument in writing delivered to the Trustees, to determine which of the
remedies herein set forth shall be adopted and to direct the time, method and
place of conducting all proceeding to be taken under the provisions of this
Indenture for the enforcement thereof or of the Notes; provided, however, that
the Trustees shall have the right to decline to follow any such direction if the
Trustees shall be advised by an Opinion of Counsel that the action or proceeding
so directed may not lawfully be taken or would be unjustly prejudicial to
holders of Notes not parties to such direction.
Section 6.20. Trustees May File Proofs of Claims. The Trustees are
hereby appointed, and each and every holder of the Notes, by receiving and
holding the same, shall be conclusively deemed to have appointed the Trustees
the true and lawful attorney-in-fact of such holder, with authority to make or
file, in their own names as trustees of an express that or otherwise as they
shall deem advisable, in any receivership, insolvency, liquidation, bankruptcy,
arrangement, reorganization or other judicial proceeding relative to any Obligor
or any other obligor upon the Notes or to their respective creditors or
Property, any and all claims, proofs of debt, petitions, consents, other
documents and amendments of any thereof, as may be necessary or advisable in
order to have the claims of the Trustees and of the holders of the Notes allowed
in any such proceeding, and to collect and receive any moneys or other Property
payable or deliverable on any such claim, proof of debt, petition or other
document and to distribute the same after the deduction of the charges and
expenses of the Trustees, and to execute and deliver any and all other papers
and documents and to do and perform any and all other acts and things, as they
may deem necessary or advisable in order to enforce in any such proceedings any
of the claims of the Trustees and of any such holders in respect of any of the
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Notes; and any receiver, assignee, trustee or debtor in any such proceeding is
hereby authorized, and each and every holder of the Notes, by receiving and
holding the same, shall be deemed to have authorized any such receiver,
assignee, trustee or debtor, to make any such payment or delivery to or on the
order of the Trustees, and in the event that the Trustees shall consent to the
making of such payments or deliveries directly to the holders of the Notes to
pay to the Trustees any amount due them for compensation and expenses, including
counsel fees, incurred by them down to the date of such payment or delivery;
provided, however, that nothing herein contained shall be deemed to authorize or
empower the Trustees to consent to or accept or adopt, on behalf of any holder
of Notes, any plan of reorganization or readjustment of any Obligor affecting
the Notes or the rights of any holder thereof, or to authorize or empower the
Trustees to vote in respect of the claim of any holder of any Note in any such
proceedings.
Section 6.21. Remedies Subject to Provisions of Law. All rights,
remedies and power provided by this section 6 may be exercised only to the
extent that the exercise thereof does not violate any applicable provision of
law in the premises, and all the provisions of this section 6 are intended to be
subject to all applicable mandatory provisions of law which may be controlling
in the premises and to be limited to the extent necessary so that they will not
render this Indenture invalid or unenforceable under the provisions of any
applicable law.
SECTION 7. CONCERNING THE TRUSTEES.
The Trustees accept the trusts hereunder and agree to perform the
same, but only upon the terms and conditions hereof, including the following, to
all of which the Obligors and the respective holder of the Notes at any time
outstanding by their acceptance thereof agree:
Section 7.1. Duties of Trustees. The Trustees undertake (a) except
while an Event of Default shall have occurred and be continuing, to perform such
duties and only such duties as are specifically set forth in this Indenture, and
(b) while an Event of Default shall have occurred and be continuing, to exercise
such of the rights and powers as are vested in them by this Indenture, and to
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
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The Trustees upon receipt of instruments furnished to the Trustees
pursuant to the provisions of this Indenture, shall examine the same to
determine whether or not such instruments appear to conform to the requirements
of this Indenture. Unless notified in writing to the contrary by the Required
Holders, the Trustee may assume all insurance required to be maintained by the
Obligor under the term of this Indenture is acceptable to the Required Holders.
Section 7.2. Trustees' Liability. No provision of this Indenture shall
be construed to relieve the Trustees from liability for their own negligent
action, negligent failure to act, or their own willful misconduct, except that:
(a) unless an Event of Default shall have occurred and be continuing,
the Trustees shall not be liable except for the performance of such duties as
are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustees but the
duties and obligations of the Trustees shall be determined solely by the express
provisions of this Indenture; and
(b) In the absence of bad faith on the part of the Trustees, the
Trustees may rely upon the authenticity of, and the truth of the statements and
the correctness of the opinions expressed in, and shall be protected in acting
upon, any resolution, Officers' Certificate, Opinion of Counsel, Note, request,
notice, consent, waiver, order, signature guaranty, notarial seal, stamp,
acknowledgment, verification, appraisal, report, stock certificate, or other
paper or document believed by the Trustees to be genuine and to have been
signed, affixed or presented by the proper party or parties; and
(c) in the absence of bad faith on the part of the Trustees, whenever
the Trustees, or any of their agents, representatives, experts or counsel, shall
consider it necessary or desirable that any matter be proved or established,
such matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by an
Officers' Certificate; provided, however, that the Trustees, or such agent,
representative, expert or counsel, may require such further and additional
evidence and make such further investigation as it or they may consider
reasonable; and
(d) the Trustees may consult with counsel and the advice or opinion of
such counsel shall be full and complete authorization and protection in respect
of any action taken or suffered hereunder in good faith and in accordance with
such advice or Opinion of Counsel; and
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(e) the Trustees shall not be liable with respect to any action taken
or omitted to be taken by them in good faith in accordance with any direction or
request of a holder or holders of the Notes with which the Trustees are required
by the provisions hereof to comply; and
(f) the Trustees shall not be liable for any error of judgment made in
good faith by an officer of the Trustee unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(g) neither the Trustee nor the Individual Trustee shall be deemed to
have knowledge of any Default or Event of Default unless and until in the case
of the Trustee an officer in its Corporate Trust Department, or, in the case of
the Individual Trustee, the Individual Trustee, shall have actual knowledge
thereof or have received written advice thereof from any Obligator or the holder
of a Note; and
(h) whether or not an Event of Default shall have occurred, the
Trustees shall not be under any obligation to take any action under this
Indenture (including action under section 3.9 and section 6.19 hereof) which may
involve them in any expense or liability, the payment of which within a
reasonable time is not, in their reasonable opinion, assured by the security
afforded to them by the terms of this Indenture, unless and until requested in
writing so to do by one or more of the Initial Purchasers or the Required
Holders and furnished, from time to time as the Trustees may require, with
reasonable security and indemnity; and
(i) whether or not an Event of Default shall have occurred whenever it
is provided in this Indenture that the Trustees consent to any act or omission
by any person or that the Trustees exercise their discretion in any manner, the
Trustees shall seek the written approval of the Required Holders and, unless
written evidence of such acquiescence has been received by the Trustees, they
shall be fully justified in refusing so to consent or so to exercise their
discretion;
(j) prior to entering or taking possession of, or taking any other
action with respect to any Land Parcel, the Trustees may require assurance in
the form of an Opinion of Counsel or otherwise that no liability under any law
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pertaining to hazardous substances will be imposed upon either of them as a
result of such action; and
(k) when acting in good faith, the Trustees shall not be liable for
any action or omission on the part of the Trustees in compliance with the
provisions of the Intercreditor Agreement.
Section 7.3. No Responsibility of Trustees for Recitals. The recitals
and statements contained herein and in the Notes (except for the Trustee's,
certificate of authentication endorsed on the Notes) shall be taken as the
recitals and statements of the Obligors, and the Trustees assume no
responsibility for the correctness of the same.
The Trustees make no representation as to the validity or sufficiency
of this Indenture, any of the Mortgages, any of the Pledge Agreements or of the
Notes secured hereby or thereby, the security hereby or thereby afforded, the
title of any Obligor to the Mortgaged Property or the descriptions thereof, or
the filing or recording or registering of this Indenture, the Mortgages, the
Pledge Agreements or any other related document.
The Trustees shall not be concerned with or accountable to anyone for
the use or application of any deposited moneys which shall be released or
withdrawn in accordance with the provisions of this Indenture or of any Property
or securities or the proceeds thereof which shall be released from the lien
hereof in accordance with the provisions of this Indenture.
Section 7.4. Compensation and Expenses of Trustees; Indemnification;
Lien Therefor. The Obligors covenant, jointly and severally, to pay to the
Trustees such compensation for their services hereunder as shall be agreed to by
the Obligors and the Trustees, or, in the absence of such agreement, reasonable
compensation therefor (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and to pay, or
reimburse, the Trustees for all reasonable expenses incurred hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Trustees may employ in
connection with the exercise and performance of their powers and duties
hereunder.
The Obligors also covenant, jointly and severally, that they will
indemnify and save the Trustees, their agents, employees and representatives,
harmless against any expenses (including reasonable attorneys' fees),
liabilities and damages, not arising from their own willful default or
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negligence, which they or any of them may incur in the exercise and performance
of their rights, powers, trusts, duties and obligations hereunder.
As security for the performance of the obligations of the Obligors
under this section 7.4, the Trustees shall be secured hereby in priority to the
indebtedness evidenced by the Notes.
Section 7.5. Moneys Received by Trustees; Trust Funds - Segregation.
All moneys received by the Trustees under or pursuant to any provision of this
Indenture shall constitute trust funds for the purpose for which they were paid
or are held, but need not be segregated in any manner from other moneys, and may
be held or deposited under such conditions as may be prescribed by law for trust
funds.
Section 7.6. Trustee May Hold Notes. The Trustee or any officer or
director of the Trustee may acquire and hold Notes, offset funds or deposits
with it other than funds held by it as Trustee and otherwise deal with any
Obligors or with any other corporation having relations with the Obligor, in the
same manner and to the same extent and with like effect as though it were not
Trustee or such officer or director; provided that nothing contained in this
section 7.6 shall be deemed to modify, amend or waive any of the duties and
obligations of the Trustee to the holders of the Notes as set forth in this
Indenture.
Section 7.7. Action by Individual Trustee. The Individual Trustee
shall act as and be such upon the following terms and conditions:
(a) Subject to the provisions of section 7.17, all rights, powers,
duties and obligations conferred or imposed upon the Trustees shall be conferred
or imposed solely upon and solely exercised and performed by the Trustee except
as expressly provided otherwise in this Indenture and except to the extent that
under any law of any jurisdiction in which any particular act or acts are to be
performed the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall be
exercised and performed by the Individual Trustee.
(b) No power granted by this Indenture to, or which this Indenture
provides may be exercised by, the Individual Trustee shall be exercised by the
Individual Trustee except jointly with, or with the consent in writing of, the
Trustee, anything herein contained to the contrary notwithstanding.
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(c) The Individual Trustee may at any time by an instrument in
writing, constitute the Trustee or its successor in trust hereunder his agent or
attorney-in-fact, with full power and authority, to the extent which may be
permitted by law, to do any and all acts and things and exercise any and all
discretion which he authorized or permitted to do or exercise, for and in his
behalf and in his name.
Section 7.8. Resignation of Trustee. The Trustee may resign and be
discharged from the trusts created hereby by delivering notice thereof, by first
class mail, postage prepaid, to the Company and all holders of the Notes at the
time outstanding.
Such resignation shall take effect immediately upon the acceptance of
appointment by a successor Trustee appointed as provided in section 7.10.
Section 7.9. Removal of Trustee. The Trustee may be removed at any
time, for or without cause, by an instrument or instruments in writing executed
by the Required Holders and delivered to the Trustee with a copy to the Company,
specifying the removal and the date when it shall take effect and such removal
shall be effective upon such date and the Trustee's duties and obligations
hereunder shall thereupon cease except as specified in section 7.11 hereof.
Section 7.10. Appointment of Successor Trustee. In case at any time
the Trustee shall resign or be removed or become incapable of acting, a
successor Trustee may be appointed by the Required Holders, by an instrument or
instruments in writing executed by such Noteholders and filed with such
successor Trustee with a copy of such instrument or instruments to the Company.
Until a successor Trustee shall be so appointed by the Noteholders,
the Company shall appoint a successor Trustee to fill such vacancy, by an
instrument in writing executed by the President and any Vice President of the
Obligor and delivered to the successor Trustee. If all or substantially all of
the Mortgaged Property shall be in the possession of one or more receiver,
trustees, liquidators or assignees for the benefit of creditors, then such
receivers, trustees, custodians, liquidators or assignees may, by an instrument
in writing delivered to the successor Trustee, appoint a successor Trustee.
Promptly after any such appointment, the Company, or any such receiver,
trustees, custodians, liquidators or assignees, as the case may be, shall give
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notice thereof by registered or certified mail to each holder of Notes at the
time outstanding.
Any successor Trustee so appointed by the Company, or such receiver,
trustees, custodians, liquidators or assignees shall immediately and without
further act be superseded by a successor Trustee appointed by the Required
Holders.
If a successor Trustee shall not be appointed pursuant to this Section
within 90 days after a vacancy shall have occurred in the office of Trustee, the
holder of any Senior Secured Note or such retiring Trustee (unless the retiring
Trustee is being removed) may apply to any court of competent jurisdiction to
appoint a successor Trustee, and such court may thereupon, after such notice, if
any, as it may consider proper, appoint a successor Trustee.
Section 7.11. Succession of Successor Trustee. Any successor Trustee
appointed hereunder shall execute, acknowledge and deliver to the Obligors and
the predecessor Trustee an instrument accepting such appointment, and thereupon
such successor Trustee, without any further act, deed, conveyance or transfer,
shall become vested with the title to the Trust Estate, and with all the rights,
power, trusts, duties and obligations of the predecessor Trustee in the trust
hereunder, with like effect as if originally named as Trustee herein.
Upon the request of any such successor Trustee, however, the Obligors
and the predecessor Trustee shall execute and deliver such instruments of
conveyance and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Trustee the title to the Trust Estate and all such rights, power, trusts, duties
and obligations of the predecessor Trustee hereunder, and the predecessor
Trustee shall also assign and deliver to the successor Trustee any property
subject to the Lien of this Indenture which may then be in its possession.
Any Trustee which has resigned or been removed shall nevertheless
retain all rights of indemnity, including any Lien upon the Trust Estate
afforded to it by section 7.4.
Section 7.12. Eligibility of Trustee. The Trustee and every successor
Trustee shall be a state or national Bank or trust company in good standing,
organized under the laws of the United States of America or any State thereof
and having a capital, surplus and undivided profits aggregating at least section
500,000,000.
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In case the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in section 7.8.
Section 7.13. Successor Trustee by Merger. Any corporation into which
the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, or state or national Bank or trust company in any manner
succeeding to the corporate trust business of the Trustee as a whole or
substantially as a whole, if eligible as provided in section 7.12, shall be the
successor of the Trustee hereunder without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything to the
contrary contained herein notwithstanding.
Section 7.14. Resignation of Individual Trustee. The Individual
Trustee or any of his successors may resign and may be discharged of the trusts
created by this Indenture by giving written notice thereof to the Company and to
the Trustee.
Such resignation shall take effect immediately upon the acceptance of
appointment by a Person succeeding to the office of Individual Trustee appointed
by the Trustee or by the Required Holders as provided in section 7.16.
Section 7.15. Removal of Individual Trustee. The Individual Trustee or
any of his successors may be removed at any time by the Required Holders or by
the Trustee, by delivery of a notice of such removal to the Individual Trustee,
to the Company, and in the case of removal by such holders, to the Trustee,
signed by such holders or the Trustee, as the case may be and such removal shall
be effective upon the date specified in such notice and the Individual Trustee's
duties and obligations hereunder shall thereupon cease except as specified in
section 7.17 thereof.
Section 7.16. Appointment of Successor to Individual Trustee. If at
any time the Individual Trustee or any of his successors shall die, resign or be
removed or otherwise become incapable of acting, or if for any reason the office
of Individual Trustee shall become vacant, a successor to the Individual Trustee
shall forthwith be appointed by the Trustee or, in the event that the Trustee
shall fail to make such appointment within 60 days after the occurrence of such
death, resignation, removal, incapacity or vacancy, by the Required Holders by
an instrument signed by the Trustee or by such holders.
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Section 7.17. Succession of Successor to Individual Trustee. Any
Person appointed as a successor to the Individual Trustee shall execute,
acknowledge and deliver to his predecessor, to the Trustee and to the Obligors,
an instrument accepting such appointment hereunder, and thereupon such Person
without any further act, deed or conveyance shall become vested with all the
estates, Properties, rights, powers, duties and trusts of his predecessor in the
trusts hereunder with like effect as if originally named as Individual Trustee
herein; but nevertheless, on the written request of the Obligors or of the
Trustee or of the Individual Trustee, the predecessor shall execute and deliver
an instrument transferring to the Individual Trustee, upon the trusts expressed
in this Indenture, all the estates, Properties, rights, powers and trusts
granted to him by this Indenture and shall duly assign, transfer, deliver and
pay over to the Individual Trustee any Property and money subject to the Lien of
this Indenture held by such predecessor. Should any instrument in writing from
the Obligors or from the Trustee be required by any Person who becomes the
Individual Trustee for more fully and certainly vesting in and confirming to
such Individual Trustee such estates, properties, rights, powers and trusts,
then, on request, any and all such instruments in writing shall be made,
executed, acknowledged and delivered by the Obligors and/or the Trustee.
Any Individual Trustee which has resigned or been removed shall
nevertheless retain all rights of indemnity, including any Lien upon the
Mortgaged Property afforded to him by section 7.4.
SECTION 8. SUPPLEMENTAL INDENTURE; WAIVERS.
Section 8.1. Supplemental Indentures Without Noteholders' Consent. The
Obligors, when authorized by resolutions of their Boards of Directors, and the
Trustees from time to time and at any time, subject to the restrictions in this
Indenture contained, may, without consent of the holders of the Note, enter into
an indenture or indentures supplemental hereto and which thereafter shall form a
part hereof for any one or more or all of the following purpose:
(a) to add to the covenants and agreements to be observed by, and to
surrender any right or power reserved to or conferred upon, the Obligors;
79
(b) to evidence the succession of another corporation to any Obligor,
or successive successions, and the assumption by the successor corporation to
the covenants, agreements and obligations of any Obligors; provided that any
such succession and assumption is permitted by the terms of this Indenture;
(c) to subject to the Lien of this Indenture additional Property
hereafter acquired by any Obligor or others and intended to be subjected to the
Lien of the Indenture, and to correct or amplify the description of any Property
subject to the Lien of this Indentures; or
(d) to permit the qualification of this Indenture under the Trust
Indenture Act of 1939, as amended, or any similar Federal statute hereafter in
effect, except that nothing herein contained shall permit or authorize the
inclusion of to provisions referred to in Section 316(a)(2) of said Trust
Indenture Act of 1939 or any corresponding provision in any similar Federal
statute hereafter in effect;
and the Obligors covenant to perform all requirements of any such supplemental
indenture. No restriction or obligation imposed upon the Obligor may, except as
otherwise provided in this Indenture, be waived or modified by such supplemental
indentures, or otherwise.
Section 8.2. Waivers and Consents by Noteholders; Supplemental
Indentures With Noteholders' Consent. With the written consent of the Required
Holders, (a) the Obligors may take any action prohibited, or omit the taking of
any action required, by any of the provisions of this Indenture or any indenture
supplemented hereto, or (b) the Obligors, when authorized by resolutions of
their respective Boards of Directors, and the Trustees, may enter into an
indenture or indentures supplemental hereto for the purpose of adding, changing,
or eliminating any provisions of this Indenture or of any indenture supplemental
hereto or modifying in any manner the rights and obligations of the holders of
the Notes and the Obligors; provided that without the consent of the holder of
each Note, no such supplemental indenture shall:
(i) impair or affect the right of any holder to receive payments or
prepayments of the principal of and payments of the interest and premium, if
any, on its Note, as therein and herein provided; or
(ii) permit the creation of any Lien prior to, or on a parity with,
the Lien of this Indenture, any of the Mortgages and any of the Pledge
Agreements with respect to any of the Mortgaged Property; or
80
(iii) deprive any holder of the Notes of the benefit of the Lien of
this Indenture upon all or any part of the Mortgaged Property; or
(iv) reduce the aforesaid percentage of the aggregate principal amount
of Notes, the holders of which are required to consent to any such waiver or
supplemental indenture pursuant to this Section; or
(v) modify the rights, duties or immunities of the Trustee or the
Individual Trustee without its consent.
Provided, nevertheless, that no such supplemental indenture shall modify the
duties of the Trustee or Individual Trustee without its consent.
Section 8.3. Solicitation of Noteholders. The Obligors covenant and
agree that they will not solicit, request or negotiate for or with respect to
any proposed waiver, consent or amendment of any of the provisions of this
Indenture or the Notes unless each holder of the Notes (irrespective of the
amount of Notes then owned by it) shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be supplied
by the Company with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
or consent effected pursuant to the provisions of this section 8.3 shall be
delivered by the Company to each holder of outstanding Notes forthwith following
the date on which the same shall have been executed and delivered by the holder
or holders of the requisite percentage of outstanding Notes. The Obligors will
not, directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of the Notes as consideration for or as an inducement to
the entering into by any holder of the Notes of any waiver, consent or amendment
of any of the terms and provisions of this Indenture or the Notes unless such
remuneration is concurrently paid, or such security is granted, on the same
terms, ratably to the holders of all of the Notes outstanding.
Provided, nevertheless, that no such supplemental indenture shall
modify the duties of the Trustee or Individual Trustee without its consent.
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Section 8.4. Opinion of Counsel Conclusive as to Supplemental
Indenture. The Trustees are hereby authorized to join with the Obligors in the
execution of any such supplemental indenture authorized or permitted by the
terms of this Indenture to make the further agreements and stipulations which
may be therein contained, and the Trustees may, as a condition precedent to
their execution of any supplemented indenture, require delivery of an Opinion of
Counsel and an Officers' Certificate as conclusive evidence that any
supplemental indenture executed pursuant to the provision of this section 8
complies with the requirements of this section 8.
SECTION 9. ACTION BY NOTEHOLDERS.
Section 9.1. Evidence of Action by Noteholders. Whenever in this
Indenture, the Pledge Agreements or the Mortgages it is provided that the
holders of a specified percentage in aggregate principal amount of the Note may
take any action (including the making of any demand or request, the giving of
any notice, approval, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action the holders of such specified
percentage have joined therein may be evidenced by any instrument or any number
of instruments of similar tenor executed by holders of the Notes in person or by
attorney or proxy appointed in writing.
Section 9.2. Noteholders' Execution of Instruments; Proof of Holdings.
The fact and date of the execution of any instrument by a holder of the Notes or
his attorney or proxy may be proved by the certificate under his official seal
of any notary public or other officer in any jurisdiction who, by the laws
thereof, has power to take acknowledgements or proof of deeds to be recorded
within such jurisdiction, that the Person who signed such instrument did
acknowledge before such notary public or other officer the execution thereof, or
by the affidavit of a witness to such execution; where such execution is by an
officer of a corporation or association or a member of a partnership on behalf
of such corporation, association or partnership such certificate or affidavit
shall also constitute sufficient proof of his authority.
The holding by any Person of any of the Notes shall be proved by the
Register.
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SECTION 10. SUBORDINATION OF THE SUBORDINATED SECURED NOTES.
Each Purchaser of Subordinated Secured Notes and each subsequent
holder thereof agrees that all of the indebtedness evidenced by and accruing on
or in respect of the Subordinated Secured Notes (whether for principal, premium,
Yield-Maintenance Premium, if any, interest or otherwise) and any renewals or
extensions thereof, all obligation to purchase, redeem or otherwise acquire the
Subordinated Secured Notes, together with all other amounts (including all
reasonable attorneys fees and other costs of collection or enforcement) to which
the Purchasers or holders of the Subordinated Secured Notes are or may be
entitled under the terms and provisions of this Indenture or any related
security documents shall be subordinate and junior in right of payment, to the
extent and in the manner hereinafter set forth, to the Superior Indebtedness:
(a) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization, arrangement or other similar
proceedings in connection therewith, relative to the Company or to its
creditors, as such, or to its property, and in the event of any proceedings, for
voluntary liquidation, dissolution or other winding-up of the Company, whether
or not involving insolvency or bankruptcy, then the holders of Superior
Indebtedness shall be entitled to receive payment in full of all Superior
Indebtedness before the holders of the Subordinated Secured Notes are entitled
to receive any payment on the Subordinated Secured Notes, and to that end the
holders of Superior Indebtedness shall be entitled to receive for application in
payment thereof any payment or distribution of any kind or character, whether in
cash or property or securities, which may be payable or deliverable in any such
proceedings in respect of the Subordinated Secured Notes, except securities
which are subordinate and junior in right of payment, pursuant to subordination
provision which are no less favorable to the holders of Superior Indebtedness
than the provisions contained in this section 10, to the payment of all Superior
Indebtedness then outstanding;
(b) In the event that pursuant to the provisions of this Indenture the
Subordinated Secured Notes are declared or become due and payable before their
expressed maturity because of the occurrence of an Event of Default as described
in section 6.1 (under circumstances when the provisions of the foregoing
paragraph (a) shall not be applicable), no amount shall be paid by the Obligors
or the Trustee in respect of the Subordinated Secured Notes in excess of current
83
interest payments as provided in this Indenture, except at the stated maturity
thereof or in accordance with the regular mandatory prepayments provided for in
section 5.2(b) (all subject to the provisions of paragraphs (a), (c) and (d) of
this section 18), nor shall any holder of the Subordinated Secured Notes
commence enforcement of its remedies with respect to such excess amounts unless
and until all Superior Indebtedness outstanding at the time the Subordinated
Secured Notes so become due and payable because of any such event shall have
been paid in full or payment thereof shall have been provided for in a manner
satisfactory to the holders of such outstanding Superior Indebtedness;
(c) In the event that any monetary default shall occur and be
continuing with respect to any Superior Indebtedness permitting the holders of
such Superior Indebtedness to accelerate the maturity thereof, the holders of
the Subordinated Secured Notes shall not be entitled to receive any payment
thereon (including any such payment which would cause such default) unless
payment in full shall have been made of all Superior Indebtedness. The Company
and the Trustee, forthwith upon receiving notice of any such default, shall
notify the holders of the Subordinated Secured Notes immediately;
(d) In the event that any default (other than a monetary default)
shall occur and be continuing with respect to any Superior Indebtedness
permitting the holders of such Superior Indebtedness to accelerate the maturity
thereof, the holders of the Subordinated Secured Notes shall not be entitled to
receive any payment thereon unless payment in full shall have been made of all
Superior Indebtedness if either (i) notice of such default, in writing or by
telegram, shall have been given to the Company and the Trustee, provided that
the holders of such Superior Indebtedness shall have commenced judicial
proceedings or enforcement of their non-judicial remedies as a secured party
under Article 9 of the Uniform Commercial Code or as a mortgagee or trustee
under applicable real estate law in respect of such default within 120 days
after the giving of such notice, and provided further that only one such notice
shall be given pursuant to this paragraph (d) in any 12-month period, or (ii)
proceeding shall be pending in respect of such default. The Company and the
Trustee, forthwith upon receipt of any notice received by it pursuant to this
paragraph (d), shall send a copy thereof by registered mail or by telegram to
the holders of the Subordinated Secured Notes; and
(e) In the event any payment or distribution of any kind or character,
whether in cash, property or securities, shall be made upon or in respect of any
84
Subordinated Secured Note in contravention of any of the provisions of this
section 10 (it being understood that the failure by the holder of any
Subordinated Secured Note to receive notice of any default on any Superior
Indebtedness shall not abrogate any of the provision of this section 10) such
payment or distribution shall be held in trust and paid over by the holder or
holders of the Subordinated Secured Notes receiving the same to the holders of
outstanding Superior Indebtedness for application in payment thereof, unless and
until such Superior Indebtedness shall have been paid or satisfied in full.
Subject to the prior payment in full of all Superior Indebtedness and
to the extent that such payment is not voided and required to be returned as a
result of any bankruptcy, insolvency or similar proceeding of the Company, the
holders of the Subordinated Secured Notes shall be subrogated to the rights of
the holder of the Superior Indebtedness to receive payments or distributions of
the assets of any Obligor made on account of the Superior Indebtedness until all
amounts of principal, premium and interest due with respect to the Subordinated
Secured Notes shall be paid in full. For purposes of such subrogation, all such
payments or distributions made directly to the holders of Superior Indebtedness
or turned over thereto by the holders of the Subordinated Secured Notes which,
but for the provisions of this section 10 would have been paid to or retained by
the holders of the Subordinated Secured Notes, shall be deemed to be payments or
distributions by the Obligor on account of the Subordinated Secured Notes and
not on account of the Superior Indebtedness.
No present or future holder of Superior Indebtedness shall be
prejudiced in his right to enforce subordination of the Subordinated Secured
Notes by any act or failure to act on the part of any Obligor. The provisions of
this section 10 are solely for the purpose of defining the relative rights of
the holders of Superior Indebtedness on the one hand and the holders of the
Subordinated Secured Notes on the other hand and nothing herein shall impair as
between any Obligor and the holders of the Subordinated Secured Notes the
obligation of the Obligors, which is unconditional and absolute, to pay to the
holders the principal, premium, if any, and interest thereon in accordance with
their terms, nor shall anything herein prevent the holders of the Subordinated
Secured Notes from exercising all remedies otherwise permitted by applicable law
or under this Agreement upon default under this Indenture, subject to the rights
it any, under this Indenture of holders of Superior Indebtedness to receive
85
cash, property or securities otherwise payable or deliverable to the holders of
the Subordinated Secured Notes from the Company or any of its Subsidiaries, from
any of their assets or from any other source.
For purposes of this section 10, the Superior Indebtedness shall not
be deemed to have been paid or satisfied "in full" until the holders of the
Superior Indebtedness shall have received final, irrevocable and unconditional
payment of all outstanding Superior Indebtedness in full in cash which payment
shall have been retained by such holders for a period of time one day in excess
of all preference periods under applicable bankruptcy or insolvency laws.
The Company agrees, for the benefit of the holders of Superior
Indebtedness, that in the event that the Subordinated Secured Notes shall become
due and payable before their expressed maturity because of the occurrence of an
Event of Default as described in section 6.1 the Company will give prompt notice
in writing of such happening to the holders of Superior Indebtedness.
Each and every holder of the Subordinated Secured Notes by acceptance
thereof shall undertake and agree for the benefit of each holder of Superior
Indebtedness to execute, verify, deliver and file any proofs of claim, consents,
assignments or other instruments which any holder of Superior Indebtedness may
at any time require in order to prove and realize upon any rights or claims
pertaining to the Subordinated Secured Notes and to effectuate the full benefit
of the subordination contained herein; and upon failure of any such holder of
any of the Subordinated Secured Notes so to do, any such holder of Superior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of such holder of Subordinated Secured Notes to execute,
verify, deliver and file any such proofs of claim, consents, assignments or
other instruments.
Each holder on the Subordinated Secured Notes, the Trustee and each
Obligor further agree that the provisions of this section 10 will not be
amended, rescinded, cancelled or modified without the prior consent written
consent of each holder of any Superior Indebtedness.
SECTION 11. TERMINATION OF INDENTURE.
Section 11.1. Termination of Indenture. If the Obligors shall pay and
discharge the whole amount of the principal or premium it any, and interest on
all Notes outstanding and shall pay or cause to be paid all other sums payable
86
hereunder, then and in that case all Property, rights and interests hereby
conveyed or assigned or pledged shall revert to the Obligors, and the estate,
right, title and interest of the Trustees and the holders of the Notes therein
shall thereupon cease, terminate and become void; and the Trustees, in such
case, on demand of the Obligors and at their cost and expense, shall execute and
deliver to the Obligors a proper instrument or proper instruments acknowledging
the satisfaction and termination of this Indenture, and shall convey, assign and
transfer, or cause to be conveyed, assigned or transferred, and shall deliver or
cause to be delivered, to the Obligors, all Property, including money and
securities, then held by the Trustees, other than moneys deposited with the
Trustee for the payment of the principal of and premium, if any, or interest on
any Notes.
The indemnities of the Obligors to the Trustees contained in section
7.4 shall survive such payment and discharge of the Notes and such satisfaction
and termination of this Indenture.
Section 11.2. Trustee's Retention of Moneys Deposited for Payment of
Notes. Payment of the Notes being so duly provided for, the Obligors shall not
be required to pay interest in respect of any period after the due date thereof
to any holder of Notes, and moneys deposited for the payment of principal or
interest or for prepayment, or otherwise, remaining unclaimed in the possession
of the Trustee for six years after the date of the maturity of the Notes or the
date fixed for the prepayment of the Notes, as the case may be, shall be repaid
to the Obligors upon their request and holders of such Notes shall thereafter be
entitled to look only to the Obligors for payment thereof.
SECTION 12. MISCELLANEOUS PROVISIONS.
Section 12.1. Indenture for Benefit of Parties Hereto. Nothing in this
Indenture, expressed or implied, is intended or shall be construed to confer
upon or to give to, any Person other than the parties hereto, and the holders of
the Notes, any right, remedy or claim under or by reason of this Indenture or
any covenant, condition or stipulation hereof; and the covenants, stipulations
and agreements in this Indenture contained are and shall be for the sole and
exclusive benefit of the parties hereto, their successors and assigns, and the
holders of the Notes.
Section 12.2. Severability. In case any one or more of the provisions
contained in this Indenture or in the Notes shall be invalid, illegal or
unenforceable in any
87
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby.
Section 12.3. Basis of Opinions of Counsel and Certificates. Any
Opinion of Counsel required to be furnished pursuant to any of the provisions of
this Indenture may, in lieu of stating the facts required by the provision
hereof, state that the required condition will be fulfilled on the execution and
delivery of designated instruments, which instruments shall be delivered in form
approved by such counsel prior to or concurrently with the taking or suffering
by the Trustee of the action as a condition precedent to which such opinion is
required to be furnished under the terms of this Indenture.
Any certificate or opinion of an officer of an Obligor or an
accountant may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or upon representations by counsel, unless such
officer or accountant knows that the certificates or opinions or representations
with respect to the matters upon which his opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should have known that the same
were erroneous.
Any certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, or information with respect to which is in the
possession of an Obligor, upon the certificate or opinion of or representations
by an officer or officers of such Obligor unless such counsel knows that the
certificate or opinion or representations with respect to the matters upon which
his opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
Sections 12.4. Addresses for Notices. All notices or other
communications required or contemplated by the provisions hereof shall, unless
otherwise specified, be in writing and shall be deemed to have been given or
made on the fifth Business Day after deposit thereof in the United States mail,
by registered or certified mail, postage prepaid, or when received if delivered
by hand or sent by facsimile communication or overnight courier the receipt of
which is confirmed, addressed as follows:
If to the Obligors: Ramsay Health Care, Inc.
One Poydras Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
88
Attention: Chief Financial
Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustees: The Citizens and Southern National
Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Noteholder at its address set forth in the Register.
Any party may designate an additional or different address for
subsequent notices or communications by notice duly given in accordance with
this section 12.4 to the other parties. So long as an Initial Purchaser (or any
nominee thereof) shall be the holder of a Note, all notices to such holder shall
be made in the manner provided in its Note Agreement unless it shall have
specified some additional or different address by notice given in accordance
with the preceding sentence.
If the Obligors or the Trustees mail a notice to the holders of the
Notes, they shall mail a copy to the other party hereto at the same time.
Section 12.5. Successors and Assigns. Whenever in this Indenture any
of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all the covenants, promises and
agreements in this Indenture contained by or on behalf of the Obligors, or by or
on behalf of the Trustees, shall bind and inure to the benefit of the respective
successors and assigns, whether so expressed or not.
Section 12.6. Counterparts; Descriptive Headings. This Indenture is
being executed in any number of counterparts, each of which is an original and
all of which are identical. Each counterpart of this Indenture is to be deemed
an original hereof and all counterparts collectively are to be deemed but one
instrument. The descriptive headings of the several Sections of and Exhibits to
this Indenture were formulated, used and inserted in this Indenture for
convenience only and shall not be deemed to affect the meaning or construction
of any of the provisions hereof.
89
Section 12.7. GOVERNING LAW. THIS INDENTURE AND THE NOTES ISSUED AND
SOLD HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH ILLINOIS
LAW.
IN WITNESS WHEREOF, each Obligor has caused the Indenture to be
executed on its behalf by its President and attested by its Assistant Secretary;
and THE CITIZENS AND SOUTHERN NATIONAL BANK, in evidence of its acceptance of
the trusts hereby created, has caused this Indenture to be executed on its
behalf by one of its Corporate Trust Officers and attested by one of its Senior
Vice Presidents, and ▇▇▇▇▇ ▇. ▇▇▇▇▇ in token of her acceptance of the trusts
hereby created, has hereunto set her hand, all as of the date first above
written.
RAMSAY HEALTH CARE, INC.
By:__________________________
Its President
ATTEST:
_______________________
Assistant Secretary
BOUNTIFUL PSYCHIATRIC
HOSPITAL, INC.
By:__________________________
Its President
ATTEST:
_______________________
Assistant Secretary
CUMBERLAND MENTAL HEALTH, INC.
By:__________________________
Its President
ATTEST:
90
________________________
Assistant Secretary
EAST CAROLINA PSYCHIATRIC
SERVICE CORPORATION
By:__________________________
Its President
ATTEST:
________________________
Assistant Secretary
HAVENWYCK HOSPITAL, INC.
By:__________________________
Its President
ATTEST:
________________________
Assistant Secretary
MESA PSYCHIATRIC HOSPITAL,
INC.
By:__________________________
Its President
ATTEST:
________________________
Assistant Secretary
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA, INC.
By:__________________________
Its President
ATTEST:
91
________________________
Assistant Secretary
THE CITIZENS AND SOUTHERN
NATIONAL BANK, as Corporate
Trustee
By:__________________________
Its Corporate Trust Officer
ATTEST:
________________________
Senior Vice President
_____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇,
As Individual Trustee
92
STATE OF ILLINOIS )
) SS
COUNTY OF ▇▇▇▇ )
On this 26th day of April, 1990, before me, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a Notary
Public, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇, who acknowledges himself to be the
President of Ramsay Health Care, Inc., a Delaware corporation, and that he, as
such President, being authorized so to do executed the foregoing instrument for
the purposes therein contained, by signing the name of the corporation by
himself as President.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________
Notary Public
(Notarial Seal)
STATE OF ILLINOIS )
)SS
COUNTY OF ▇▇▇▇ )
On this 26th day of April, 1990, before me, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a Notary
Public, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇, who acknowledges himself to be the
President of Bountiful Psychiatric Hospital, Inc., a Utah corporation, and that
he, as such President, being authorized so to do executed the foregoing
instrument for the purposes therein contained, by signing the name of the
Corporation by himself as President.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________
Notary Public
(Notarial Seal)
EXHIBIT A
(To Trust Indenture)
RAMSAY HEALTH CARE, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CUMBERLAND MENTAL HEALTH, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
HAVENWYCK HOSPITAL, INC.
MESA PSYCHIATRIC HOSPITAL INC.
and
PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC.
11.6% Senior Secured Note
Due March 31, 2000
No. RA- April_, 1990
$
RAMSAY HEALTH CARE, INC., a Delaware corporation (the "Company"),
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., a Utah corporation ("Bountiful
Psychiatric") CUMBERLAND MENTAL HEALTH, INC., a North Carolina corporation
("Cumberland"), EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION, a North Carolina
corporation ("East Carolina Psychiatric"), HAVENWYCK HOSPITAL, INC., a Michigan
corporation ("Havenwyck"), MESA PSYCHIATRIC HOSPITAL, INC., an Arizona
corporation (MESA Psychiatric"), and PSYCHIATRIC INSTITUTE OF WEST VIRGINIA,
INC. a Virginia corporation ("Psychiatric Institute"; together with the Company,
Bountiful Psychiatric, Cumberland, East Carolina Psychiatric, Havenwyck and Mesa
Psychiatric collectively being hereinafter referred to as the "Obligors"), for
value received jointly and severally promise to pay to together with interest
or registered assigns
on the thirty-first day of March, 2000
the principal sum of
DOLLARS ($ )
(in each case computed on the basis of a 360-day year of twelve 30-day months)
on the principal amount from time to time remaining unpaid hereon until maturity
at the rate at 11.6% per annum, payable quarterly on March 31, June 30,
September 30 and December 31 in each year (commencing June 30, 1990), and at
maturity.
The Obligors further promise to pay interest at a rate equal to the
greater of (i) 13.6% per annum and (ii) the sum of the rate of interest publicly
announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York from time to time in New
York City as its prime rate plus 1% on overdue principal, premium, if any, and
(to the extent legally enforceable) upon each overdue installment of interest in
each case after maturity, whether by acceleration or otherwise, until paid.
2
All payments of principal, premium, if any, and interest shall be
payable upon presentation of this Note at the principal office of The Citizens
and Southern National Bank (the "Trustee"), located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, the corporate trustee under the Trust
Indenture dated as of March 31, 1990 (herein, together with any supplements and
amendments thereto, called the "Indenture"), from the Obligors to the Trustee
and ▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustees, or at the office of its successor as such
Trustee, in lawful money in the United States of America.
This Note is one of the $56,500,000 aggregate principal amount of
11.6% Senior Secured Notes of the Obligors (the "Senior Secured Notes") which,
together with the Obligors' $3,000,000 aggregate principal amount of 15.6%
Subordinated Secured Notes (the "Subordinated Secured Notes"), are secured by
the Indenture. Reference is hereby made to the Indenture for a description of
the property thereby mortgaged, conveyed, assigned, affected and specially
hypothecated, the nature and extent of the security for the Senior Secured Notes
and Subordinated Secured Notes (the "Notes"), the rights of the holders of the
Notes, the Trustees and the Obligors in respect of such security and otherwise
and the terms upon which the Notes are to be authenticated and delivered. As
provided in the Indenture, the aggregate principal amount of Notes which may be
issued thereunder shall not exceed $59,500,000.
This Note and the other Notes outstanding under the Indenture may be
declared due prior to their expressed maturity dates, voluntary prepayments may
be made thereon by the Obligors and certain prepayments are required to be made
thereon, all in the events, on the terms and in the manner and amount as
provided in the Indenture.
The terms and provisions of the Indenture and the rights and
obligations of the Obligors and the rights of the holders of the Notes may be
changed and modified to the extent permitted by and be provided in the
Indenture.
This Note is registered on the books of the Trustee and transferable
only by surrender thereof at the principal office of the Trustee duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
3
This Note shall not be valid until the certificate of authentication
hereon shall have been signed by the Trustee.
4
IN WITNESS WHEREOF, each Obligor has caused this Note to be duly
executed.
RAMSAY HEALTH CARE, INC.
By:_______________________
Its President
ATTEST:
_____________________________
Assistant Secretary
BOUNTIFUL PSYCHIATRIC
HOSPITAL, INC.
By:__________________________
Its President
ATTEST:
_____________________________
Assistant Secretary
CUMBERLAND MENTAL HEALTH, INC.
By:__________________________
Its President
ATTEST:
_____________________________
Assistant Secretary
5
EAST CAROLINA PSYCHIATRIC
SERVICE CORPORATION
By:__________________________
Its President
ATTEST:
_____________________________
Assistant Secretary
HAVENWYCK HOSPITAL, INC.
By:__________________________
Its President
ATTEST:
_____________________________
Assistant Secretary
MESA PSYCHIATRIC HOSPITAL,
INC.
By:__________________________
Its President
ATTEST:
_____________________________
Assistant Secretary
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA, INC.
By:__________________________
Its President
6
ATTEST:
_____________________________
Assistant Secretary
7
(TRUSTEES CERTIFICATE OF AUTHENTICATION)
This note is one of the Notes described in the within mentioned Trust
Indenture.
THE CITIZENS AND SOUTHERN
NATIONAL BANK, as
Trustee
By:______________________
Authorized Officer
NOTATION OF PAYMENTS OF PRINCIPAL
DATE AMOUNT
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
EXHIBIT B
(to Trust Indenture)
RAMSAY HEALTH CARE, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CUMBERLAND MENTAL HEALTH, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
HAVENWYCK HOSPITAL, INC.
MESA PSYCHIATRIC HOSPITAL INC.
and
PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC.
15.6% Senior Secured Note
Due March 31, 2000
No. RB- April_, 1990
$
RAMSAY HEALTH CARE, INC., a Delaware corporation (the "Company"),
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., a Utah corporation ("Bountiful
Psychiatric") CUMBERLAND MENTAL HEALTH, INC., a North Carolina corporation
("Cumberland"), EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION, a North Carolina
corporation ("East Carolina Psychiatric"), HAVENWYCK HOSPITAL, INC., a Michigan
corporation ("Havenwyck"), MESA PSYCHIATRIC HOSPITAL, INC., an Arizona
corporation (MESA Psychiatric"), and PSYCHIATRIC INSTITUTE OF WEST VIRGINIA,
INC., a Virginia corporation ("Psychiatric Institute"; together with the
Company, Bountiful Psychiatric, Cumberland, East Carolina Psychiatric, Havenwyck
and Mesa Psychiatric collectively being hereinafter referred to as the
"Obligors"), for value received jointly and severally promise to pay to
or registered assigns
on the thirty-first day of March, 2000
the principal sum of
DOLLARS ($ )
together with interest (in each case computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time remaining unpaid
hereon until maturity at the rate of 15.6% per annum, payable quarterly on March
31, June 30, September 30 and December 31 in each year (commencing June 30,
1990), and at maturity.
The Obligors further promise to pay interest at a rate equal to the
greater of (i) 17.6% per annum and (ii) the sum of the rate of interest publicly
announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York from time to time in New
York City as its prime rate plus 1% on overdue principal, premium, if any, and
(to the extent legally enforceable) upon each overdue installment of interest in
each case after maturity, whether by acceleration or otherwise, until paid.
2
All payments of principal, premium, if any, and interest shall be
payable upon presentation of this Note at the principal office of The Citizens
and Southern National Bank (the "Trustee"), located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, the corporate trustee under the Trust
Indenture dated as of March 31, 1990 (herein, together with any supplements and
amendments thereto, called the "Indenture"), from the Obligors to the Trustee
and ▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustees, or at the office of its successor as such
Trustee, in lawful money in the United States of America.
This Note is one of the $3,000,000 aggregate principal amount of 15.6%
Subordinated Secured Notes of the Obligors (the "Subordinated Secured Notes")
which, together with the Obligors' $56,500,000 aggregate principal amount of
11.6% Senior Secured Notes (the "Senior Secured Notes") are secured by the
Indenture. Reference is hereby made to the Indenture for a description of the
property thereby mortgaged, conveyed, assigned, affected and specially
hypothecated, the nature and extent of the security for the Senior Secured Notes
and Subordinated Secured Notes (the "Notes"), the rights of the holders of the
Notes, the Trustees and the Obligors in respect of such security and otherwise
and the terms upon which the Notes are to be authenticated and delivered. As
provided in the Indenture, the aggregate principal amount of Notes which may be
issued thereunder shall not exceed $59,500,000.
All Subordinated Secured Notes issued under the Indenture are secured
thereby and are entitled to the benefits thereof. As provided in section 10 of
the Indenture, the rights of the holders of all Subordinated Secured Notes are
subordinate and junior in certain respects to the prior rights of the holders of
all Superior Indebtedness, including the right to receive payments thereon, and
rights with respect to the Mortgaged Property mortgaged and pledged under the
Indenture and any of the Mortgages. Reference is hereby made to the Indenture
for a complete statement of the express terms and provisions thereof, including
a description of the Property mortgaged and pledged thereunder as security for
the Notes of the Obligors issued and outstanding under the Indenture.
This Note and the other Notes outstanding under the Indenture may be
declared due prior to their expressed maturity dates, voluntary prepayments may
be made thereon by the Obligors and certain prepayments are required to be made
3
thereon, all in the events, on the terms and in the manner and amounts as
provided in the Indenture.
The terms and provisions of the Indenture and the rights and
obligation of the Obligors and the rights of the holders of the Notes may be
changed and modified to the extent permitted by and as provided in the
Indenture.
This Note is registered on the books of the Trustee and is
transferable only by surrender thereof at the principal office of the Trustee
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest on
this Note shall be made only to or upon the order in writing of the registered
holder.
This Note shall not be valid until the certificate of authentication
hereon shall have been signed by the Trustee.
4
IN WITNESS WHEREOF, each Obligor has caused this Note to be duly
executed.
RAMSAY HEALTH CARE, INC.
By:__________________________
Its President
ATTEST:
____________________________
Assistant Secretary
BOUNTIFUL PSYCHIATRIC
HOSPITAL, INC.
By:__________________________
Its President
ATTEST:
____________________________
Assistant Secretary
CUMBERLAND MENTAL HEALTH, INC.
By:__________________________
Its President
ATTEST:
____________________________
Assistant Secretary
5
EAST CAROLINA PSYCHIATRIC
SERVICES CORPORATION
By:__________________________
Its President
ATTEST:
____________________________
Assistant Secretary
HAVENWYCK HOSPITAL, INC.
By:__________________________
Its President
ATTEST:
____________________________
Assistant Secretary
MESA PSYCHIATRIC HOSPITAL,
INC.
By:__________________________
Its President
ATTEST:
____________________________
Assistant Secretary
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA, INC.
By:__________________________
Its President
6
ATTEST:
_____________________________
Assistant Secretary
7
(TRUSTEES CERTIFICATE OF AUTHENTICATION)
This Note is one of the Notes described in the within mentioned Trust
Indenture.
THE CITIZENS AND SOUTHERN
NATIONAL BANK, as
Trustee
By:__________________________
Authorized Officer
NOTATION OF PAYMENTS OF PRINCIPAL
DATE AMOUNT
________________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
