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UNITED SURGICAL PARTNERS HOLDINGS, INC.
Issuer
10% Senior Subordinated Notes Due 2011
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INDENTURE
Dated as of December 19, 2001
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U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
SECTION SECTION
310(a)(1) ............................. 7.10
(a)(2) ............................. 7.10
(a)(3) ............................. N.A.
(a)(4) ............................. N.A.
(a)(5) ............................. 7.10
(b) ............................. 7.08; 7.10
(c) ............................. N.A.
311(a) ............................. 7.11
(b) ............................. 7.11
(c) ............................. N.A.
312(a) ............................. 2.05
(b) ............................. 13.03
(c) ............................. 13.03
313(a) ............................. 7.06
(b)(1) ............................. N.A.
(b)(2) ............................. 7.06
(c) ............................. 13.02
(d) ............................. 7.06
314(a) ............................. 4.13; 4.14; 4.15;
13.02
(b) ............................. N.A.
(c)(1) ............................. 13.04
(c)(2) ............................. 13.04
(c)(3) ............................. N.A.
(d) ............................. N.A.
(e) ............................. 13.05
(f) ............................. N.A.
315(a) ............................. 7.01
(b) ............................. 7.05; 13.02
(c) ............................. 7.01
(d) ............................. 7.01
(e) ............................. 6.11
316(a)(last sentence)........................ 13.06
(a)(1)(A) ............................. 6.05
(a)(1)(B) ............................. 6.04
(a)(2) ............................. N.A.
(b) ............................. 6.07
317(a)(1) ............................. 6.08
(a)(2) ............................. 6.09
(b) ............................. 2.04
318(a) ............................. 13.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed
to be part of the
Indenture.
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TABLE OF CONTENTS
Article 1
Definitions and Incorporation by Reference
SECTION 1.01. DEFINITIONS...................................................................1
SECTION 1.02. OTHER DEFINITIONS............................................................34
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT............................35
SECTION 1.04. RULES OF CONSTRUCTION........................................................35
Article 2
The Securities
SECTION 2.01. FORM AND DATING..............................................................36
SECTION 2.02. EXECUTION AND AUTHENTICATION.................................................37
SECTION 2.03. REGISTRAR AND PAYING AGENT...................................................37
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST..........................................38
SECTION 2.05. SECURITYHOLDER LISTS.........................................................38
SECTION 2.06. TRANSFER AND EXCHANGE........................................................38
SECTION 2.07. REPLACEMENT SECURITIES.......................................................39
SECTION 2.08. OUTSTANDING SECURITIES.......................................................39
SECTION 2.09. TEMPORARY SECURITIES.........................................................40
SECTION 2.10. CANCELLATION.................................................................40
SECTION 2.11. DEFAULTED INTEREST...........................................................40
SECTION 2.12. CUSIP NUMBERS................................................................40
SECTION 2.13. ISSUANCE OF ADDITIONAL SECURITIES............................................41
Article 3
Redemption
SECTION 3.01. NOTICES TO TRUSTEE...........................................................41
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.......................................42
SECTION 3.03. NOTICE OF REDEMPTION.........................................................42
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION...............................................43
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE..................................................43
SECTION 3.06. SECURITIES REDEEMED IN PART..................................................43
Article 4
Covenants
SECTION 4.01. PAYMENT OF SECURITIES........................................................43
SECTION 4.02. CHANGE OF CONTROL............................................................44
SECTION 4.03. LIMITATION ON INDEBTEDNESS...................................................47
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS............................................51
SECTION 4.05. LIMITATION ON LIENS..........................................................55
SECTION 4.06. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES.....55
SECTION 4.07. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK...........................57
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SECTION 4.08. LIMITATION ON AFFILIATE TRANSACTIONS.........................................62
SECTION 4.09. LIMITATION ON OWNERSHIP OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES..........64
SECTION 4.10. DISTRIBUTIONS BY QUALIFIED RESTRICTED SUBSIDIARIES...........................64
SECTION 4.11. INTERCOMPANY ADVANCES........................................................64
SECTION 4.12. GUARANTORS...................................................................64
SECTION 4.13. SEC REPORTS..................................................................65
SECTION 4.14. COMPLIANCE CERTIFICATE.......................................................66
SECTION 4.15. MAINTENANCE OF OFFICE OR AGENCY..............................................66
SECTION 4.16. TAXES........................................................................67
SECTION 4.17. LIMITATION ON STATUS AS INVESTMENT COMPANY...................................67
SECTION 4.18. PAYMENTS FOR CONSENT.........................................................67
SECTION 4.19. CORPORATE EXISTENCE..........................................................67
SECTION 4.20. FURTHER INSTRUMENTS AND ACTS.................................................68
Article 5
Merger
SECTION 5.01. MERGER AND CONSOLIDATION.....................................................68
Article 6
Defaults and Remedies
SECTION 6.01. EVENTS OF DEFAULT............................................................70
SECTION 6.02. ACCELERATION.................................................................73
SECTION 6.03. OTHER REMEDIES...............................................................73
SECTION 6.04. WAIVER OF PAST DEFAULTS......................................................74
SECTION 6.05. CONTROL BY MAJORITY..........................................................74
SECTION 6.06. LIMITATION ON SUITS..........................................................74
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.........................................75
SECTION 6.08. COLLECTION SUIT BY TRUSTEE...................................................75
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.............................................75
SECTION 6.10. PRIORITIES...................................................................76
SECTION 6.11. UNDERTAKING FOR COSTS........................................................76
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS.............................................77
Article 7
Trustee
SECTION 7.01. DUTIES OF TRUSTEE............................................................77
SECTION 7.02. RIGHTS OF TRUSTEE............................................................78
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.................................................79
SECTION 7.04. TRUSTEE'S DISCLAIMER.........................................................79
SECTION 7.05. NOTICE OF DEFAULTS...........................................................80
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS................................................80
SECTION 7.07. COMPENSATION AND INDEMNITY...................................................80
SECTION 7.08. REPLACEMENT OF TRUSTEE.......................................................81
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER..................................................82
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION................................................83
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY............................83
Article 8
Discharge of Indenture; Defeasance
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.............................83
SECTION 8.02. CONDITIONS TO DEFEASANCE.....................................................84
SECTION 8.03. APPLICATION OF TRUST MONEY...................................................86
SECTION 8.04. REPAYMENT TO COMPANY.........................................................86
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.........................................86
SECTION 8.06. REINSTATEMENT................................................................86
Article 9
Amendments
SECTION 9.01. WITHOUT CONSENT OF HOLDERS...................................................87
SECTION 9.02. WITH CONSENT OF HOLDERS......................................................88
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT..........................................89
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS................................90
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES........................................90
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS...................................................90
Article 10
Subordination
SECTION 10.01. AGREEMENT TO SUBORDINATE.....................................................91
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY.........................................91
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OF THE COMPANY................................92
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES........................................93
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER..........................................93
SECTION 10.06. SUBROGATION..................................................................93
SECTION 10.07. RELATIVE RIGHTS..............................................................94
SECTION 10.08. RIGHTS OF TRUSTEE AND PAYING AGENT...........................................94
SECTION 10.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.....................................94
SECTION 10.10. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO ACCELERATE.....95
SECTION 10.11. TRUST MONEYS NOT SUBORDINATED................................................95
SECTION 10.12. TRUSTEE ENTITLED TO RELY.....................................................95
SECTION 10.13. TRUSTEE TO EFFECTUATE SUBORDINATION..........................................96
SECTION 10.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY......96
SECTION 10.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY ON SUBORDINATION
PROVISIONS...................................................................96
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Article 11
Guaranties
SECTION 11.01. GUARANTIES...................................................................96
SECTION 11.02. LIMITATION ON LIABILITY......................................................99
SECTION 11.03. SUCCESSORS AND ASSIGNS.......................................................99
SECTION 11.04. NO WAIVER....................................................................99
SECTION 11.05. MODIFICATION................................................................100
SECTION 11.06. RELEASE OF GUARANTOR........................................................100
Article 12
Subordination of Guaranties
SECTION 12.01. AGREEMENT TO SUBORDINATE....................................................100
SECTION 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY........................................101
SECTION 12.03. DEFAULT ON SENIOR INDEBTEDNESS OF GUARANTOR.................................101
SECTION 12.04. DEMAND FOR PAYMENT..........................................................103
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.........................................103
SECTION 12.06. SUBROGATION.................................................................103
SECTION 12.07. RELATIVE RIGHTS.............................................................103
SECTION 12.08. RIGHTS OF TRUSTEE AND PAYING AGENT..........................................104
SECTION 12.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE....................................104
SECTION 12.10. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO DEMAND
PAYMENT.....................................................................104
SECTION 12.11. TRUST MONEYS NOT SUBORDINATED...............................................104
SECTION 12.12. TRUSTEE ENTITLED TO RELY....................................................105
SECTION 12.13. TRUSTEE TO EFFECTUATE SUBORDINATION.........................................105
SECTION 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS OF GUARANTOR.......106
SECTION 12.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF THE GUARANTORS ON SUBORDINATION
PROVISIONS..................................................................106
Article 13
Miscellaneous
SECTION 13.01. TRUST INDENTURE ACT CONTROLS................................................106
SECTION 13.02. NOTICES.....................................................................106
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.................................107
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT..........................107
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...............................108
SECTION 13.06. WHEN SECURITIES DISREGARDED.................................................108
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR................................108
SECTION 13.08. LEGAL HOLIDAYS..............................................................108
SECTION 13.09. GOVERNING LAW...............................................................109
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SECTION 13.10. NO RECOURSE AGAINST OTHERS..................................................109
SECTION 13.11. SUCCESSORS..................................................................109
SECTION 13.12. MULTIPLE ORIGINALS..........................................................109
SECTION 13.13. TABLE OF CONTENTS; HEADINGS.................................................109
APPENDIX A -Provisions Relating to Initial Securities,
Private Exchange Securities and Exchange Securities
EXHIBIT 1 - Form of Initial Security
EXHIBIT A - Form of Exchange Security or Private Exchange
Security
INDENTURE dated as of December 19, 2001, among UNITED SURGICAL PARTNERS
HOLDINGS, INC., a Delaware corporation (the "COMPANY"), the guarantors from time
to time parties hereto (the "GUARANTORS") and U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ADDITIONAL ASSETS" means:
(1) any property, plant or equipment used in a Related
Business;
(2) Capital Stock of a Person that becomes a Qualified
Restricted Subsidiary as a result of the acquisition of such Capital
Stock by Parent or a Restricted Subsidiary; or
(3) Capital Stock of a Qualified Restricted Subsidiary, a
Qualified Joint Venture or a QJVGP.
"ADDITIONAL SECURITIES" means, subject to the Company's
compliance with Section 4.03, 10% Senior Subordinated Notes Due 2011 issued from
time to time after the Issue Date under the terms of this
Indenture (other than
pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this
Indenture and other than
Exchange Securities or Private Exchange Securities issued pursuant to an
exchange offer for other Securities outstanding under this Indenture).
"AFFILIATE" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings
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correlative to the foregoing. "Affiliate" shall also mean any beneficial
owner of Capital Stock representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of Parent or of rights or
warrants to purchase such Capital Stock (whether or not currently
exercisable)and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"ASSET DISPOSITION" means any sale, lease, issuance, transfer
or other disposition (or series of related sales, leases, issuances, transfers
or dispositions) by Parent or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "DISPOSITION"), of:
(1) any shares of Capital Stock of the Company or any other
Restricted Subsidiary of Parent (other than directors' qualifying
shares or an immaterial number of shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or
line of business of Parent or any Restricted Subsidiary;
(3) any other assets of Parent or any Restricted Subsidiary
outside of the ordinary course of business of Parent or such Restricted
Subsidiary.
Notwithstanding the foregoing, the following shall be deemed
not to be Asset Dispositions:
(A) a disposition by Parent or a Restricted Subsidiary to the
Company or a Guarantor;
(B) for purposes of Section 4.07 only, (i) a disposition that
constitutes a Restricted Payment permitted by Section 4.04 or a
Permitted Investment and (ii) a transaction in accordance with Section
5.01;
(C) for purposes of Section 4.07 only, the trade or exchange
by Parent or any Restricted Subsidiary of (i) any assets of a kind used
or usable in the primary business of Parent and its Restricted
Subsidiaries or any Capital Stock of a Restricted Subsidiary, a QJVGP
or a Qualified Joint Venture for (ii) any assets of a
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kind used or usable in the primary business of Parent and its
Restricted Subsidiaries or any Capital Stock of a Person that is, or
that shall become upon such trade or exchange, a Qualified
Restricted Subsidiary, a QJVGP or a Qualified Joint Venture, and any
cash or cash equivalents necessary in order to achieve an exchange
of equivalent value; PROVIDED, HOWEVER, that (a) the value of the
assets received by Parent and its Restricted Subsidiaries in such
trade or exchange is at least equal to the fair market value (as
determined in good faith by the Board of Directors) of the assets so
traded or exchanged and (b) such trade or exchange shall constitute
an Asset Disposition to the extent of the amount of any cash, cash
equivalents and assets other than assets of the types specified in
clause (ii) above received by Parent and its Restricted Subsidiaries
as consideration in such trade or exchange;
(D) for purposes of Section 4.07 only, the sale of Capital
Stock in a Qualified Restricted Subsidiary to a Strategic Investor;
PROVIDED, THAT (i) after giving effect to such sale, such Qualified
Restricted Subsidiary continues to constitute a Qualified Restricted
Subsidiary and (ii) an amount equal to the Net Available Cash from such
sale are applied in accordance with Sections 4.07(a)(3) and 4.07(a)(4);
(E) the creation of a Lien;
(F) for purposes of Section 4.07 only, any commercially
reasonable foreclosure of a Lien on assets; PROVIDED, THAT an amount
equal to the Net Available Cash, if any, to Parent and its Restricted
Subsidiaries from such foreclosure are applied in accordance with
Sections 4.07(a)(3) and 4.07(a)(4); and
(G) a disposition of assets with a fair market value of less
than $2.0 million.
"AVERAGE LIFE" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing:
(1) the sum of the products of the numbers of years from the
date of determination to the dates of each successive scheduled
principal payment of or redemption or similar payment with respect to
such
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Indebtedness multiplied by the amount of such payment, by
(2) the sum of all such payments.
"BANK INDEBTEDNESS" means all obligations pursuant to the
Credit Agreement.
"BOARD OF DIRECTORS" means the board of directors of Parent or
any committee thereof duly authorized to act on behalf of such board.
"BUSINESS DAY" means each day which is not a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"CAPITAL STOCK" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" of any Person means Capital Stock of such
Person that does not rank senior in any respect to, and does not have any
preference or priority over, any shares of Capital Stock of any other class of
such Person, including with respect to the payment of dividends or the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person.
"CONSOLIDATED COVERAGE RATIO" as of any date of determination
means the ratio of (x) the aggregate amount of EBITDA of Parent for the period
of the most recent four consecutive fiscal quarters for which financial
statements are available immediately preceding the date of such
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determination to (y) Consolidated Interest Expense of Parent for such four
fiscal quarters; PROVIDED, HOWEVER, that:
(1) if Parent or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or
both, then EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a PRO FORMA basis to such
Indebtedness and the application of the proceeds therefrom as if such
Indebtedness had been Incurred and such proceeds had been applied on
the first day of such period;
(2) if Parent or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged on the date of the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio, then EBITDA and Consolidated Interest Expense for such
period shall be calculated on a PRO FORMA basis as if such discharge
had occurred on the first day of such period and as if Parent or such
Restricted Subsidiary had not earned the interest income actually
earned (if any) during such period in respect of cash or Temporary Cash
Investments used to repay, repurchase, defease or otherwise discharge
such Indebtedness;
(3) if, since the beginning of such period, Parent or any
Restricted Subsidiary shall have made any Asset Disposition, then
EBITDA for such period shall be reduced by an amount equal to EBITDA
(if positive) directly attributable to the assets which were the
subject of such Asset Disposition for such period, or increased by an
amount equal to EBITDA (if negative), directly attributable thereto for
such period and Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of Parent or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to Parent and its continuing Restricted Subsidiaries in
connection with such Asset Disposition for such period (or, if the
Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable
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to the Indebtedness of such Restricted Subsidiary to the extent Parent
and its continuing Restricted Subsidiaries are no longer liable for
such Indebtedness after such sale);
(4) if, since the beginning of such period, Parent or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person that becomes a
Restricted Subsidiary) or an acquisition of assets outside of the
ordinary course of business (including any Investment in a QJVGP or a
Qualified Joint Venture), then EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving PRO FORMA effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition had occurred on the first day of such period;
and
(5) if, since the beginning of such period, any Person (that
subsequently became a Restricted Subsidiary or was merged with or into
Parent or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or
(4) above if made by Parent or a Restricted Subsidiary during such
period, then EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving PRO FORMA effect thereto as if such
Asset Disposition, Investment or acquisition had occurred on the first
day of such period.
For purposes of this definition, whenever PRO FORMA effect is
to be given to an acquisition of assets, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred in connection therewith, the PRO FORMA calculations
shall be determined in good faith by a responsible financial or accounting
Officer of Parent.
If any Indebtedness bears a floating rate of interest and is
being given PRO FORMA effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness, but if the remaining term of such
Interest Rate Agreement is less than 12 months, then such Interest Rate
Agreement
7
shall only be taken into account for that portion of the period equal to the
remaining term thereof).
The Consolidated Interest Expense attributable to interest on
any Indebtedness under a revolving credit facility the outstanding principal
balance of which is required to be computed on a PRO FORMA basis in accordance
with the foregoing shall be computed based upon the average daily balance of
such Indebtedness during the applicable period, PROVIDED, THAT such average
daily balance shall take into account the amount of any repayment of
Indebtedness under such revolving credit facility during the applicable period,
to the extent such repayment permanently reduced the commitments or amounts
available to be borrowed under such facility.
"CONSOLIDATED INTEREST EXPENSE" of a Person means, for any
period, the total interest expense of such Person and its Restricted
Subsidiaries, PLUS, to the extent not included in such total interest expense,
and to the extent incurred by such Person or its Restricted Subsidiaries,
without duplication:
(1) interest expense attributable to Capital Lease
Obligations;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(6) net payments pursuant to Interest Rate Agreements;
(7) Disqualified Stock dividends in respect of all
Disqualified Stock held by Persons other than such Person or a Wholly
Owned Subsidiary of such Person (other than dividends payable solely in
Capital Stock (other than Disqualified Stock) of such Person);
PROVIDED, HOWEVER, that such dividends will be multiplied by a
fraction, the numerator of which is one and the denominator of which is
one minus the effective combined tax rate of the issuer of such
Disqualified Stock (expressed as a decimal) for such
8
period (as estimated by the chief financial officer of such Person in
good faith);
(8) interest accruing on any Indebtedness of any other Person
to the extent such Indebtedness is Guaranteed by (or secured by the
assets of) such first Person or any of its Restricted Subsidiaries; and
(9) the cash contributions to any ESOP to the extent such
contributions are used by such ESOP to pay interest or fees to any
Person (other than such first Person) in connection with Indebtedness
Incurred by such ESOP.
"CONSOLIDATED NET INCOME" of a Person means, for any period,
the net income of such Person and its consolidated Subsidiaries; PROVIDED,
HOWEVER, that there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than such first
Person) if such other Person is not a Restricted Subsidiary, except
that:
(A) subject to the exclusion contained in clause (4)
below, such first Person's equity in the net income of any
such other Person for such period shall be included in such
Consolidated Net Income only to the extent of the aggregate
amount of cash actually distributed by such other Person
during such period to such first Person or any of its
Restricted Subsidiaries as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid
to a Restricted Subsidiary of such first Person, to the
limitations contained in clause (3) below); and
(B) such first Person's equity in a net loss of any
such other Person for such period shall be included in
determining such Consolidated Net Income;
(2) any net income (or loss) of any Person acquired by such
first Person or a Subsidiary of such first Person in a pooling of
interests transaction for any period prior to the date of such
acquisition;
(3) any net income of any Restricted Subsidiary of such first
Person to the extent such Restricted Subsidiary is subject to
restrictions, directly or
9
indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to such first
Person, except that:
(A) subject to the exclusion contained in clause (4)
below, the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income
to the extent of the aggregate amount of cash actually
distributed by such Restricted Subsidiary during such period
to such first Person or another Restricted Subsidiary of such
first Person as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another
Restricted Subsidiary of such first Person, to the limitation
contained in this clause); and
(B) the net loss of any such Restricted Subsidiary
for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (but not loss) realized upon the sale or other
disposition of any assets of such first Person or its consolidated
Subsidiaries (including pursuant to any Sale/Leaseback Transaction) not
made in the ordinary course of business and any gain (but not loss)
realized upon the sale or other disposition of any Capital Stock of any
Person;
(5) extraordinary gains or losses;
(6) the cumulative effect of a change in accounting
principles;
(7) any unrealized gain or loss from foreign exchange
transactions; and
(8) any non-cash compensation expense in connection with the
issuance of employee or independent contractor stock options.
Notwithstanding the foregoing, for the purposes of Section
4.04 only, there shall be excluded from Consolidated Net Income any repurchases,
repayments or redemptions of Investments, proceeds realized on the sale of
Investments or return of capital to Parent or a Restricted Subsidiary to the
extent such repurchases, repayments, redemptions, proceeds or returns would
increase
10
the amount of Restricted Payments permitted under such section pursuant to
Section 4.04(a)(3)(D).
"CREDIT AGREEMENT" means the Credit Agreement dated as of
December 19, 2001, among USP Domestic Holdings, Inc. and USPE Holdings, Ltd. as
co-borrowers, the lenders from time to time parties thereto, Credit Suisse First
Boston as Administrative Agent, ▇▇▇▇▇▇ Commercial Paper Inc. as Syndication
Agent, and Societe Generale as Documentation Agent, together with the related
documents thereto (including any guarantees and security documents), as amended,
extended, renewed, restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount, terms, conditions, covenants and
other provisions) from time to time, and any agreement (and related documents)
governing Indebtedness Incurred to Refinance, in whole or in part, the
borrowings and commitments then outstanding or permitted to be outstanding under
such credit agreement or a successor credit agreement, whether by the same or
any other lenders or agents or group of lenders or agents.
"CREDIT FACILITIES" means, with respect to Parent and its
Restricted Subsidiaries, one or more debt facilities (including the Credit
Agreement) or commercial paper facilities with banks or other institutional
lenders providing revolving credit loans, term loans, production payments,
receivables financing (including through the sale of receivables) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"CURRENCY AGREEMENT" means, in respect of a Person, any
foreign exchange contract, currency swap agreement or other similar agreement
designed to protect such Person against fluctuations in currency values.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DESIGNATED SENIOR INDEBTEDNESS" with respect to a Person
means:
(1) the Bank Indebtedness; and
(2) any other Senior Indebtedness of such Person which, at the
date of determination, has an aggregate principal amount outstanding
of, or under which, at the date of determination, the holders thereof
are
11
committed to lend up to, at least $25.0 million and is specifically
designated by such Person in the instrument evidencing or governing
such Senior Indebtedness as "Designated Senior Indebtedness" for
purposes of this Indenture.
"DISQUALIFIED STOCK" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder) or
upon the happening of any event:
(1) matures or is mandatorily redeemable (other than
redeemable only for Capital Stock of such Person which is not itself
Disqualified Stock) pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; PROVIDED, HOWEVER, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Securities shall not constitute
Disqualified Stock if:
(A) the "asset sale" or "change of control"
provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the terms
applicable to the Securities under Sections 4.02 and 4.07; and
(B) any such requirement only becomes operative after
compliance with such terms applicable to the Securities,
including the purchase of any Securities tendered pursuant
thereto.
The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price will be calculated in accordance
with the terms of such
12
Disqualified Stock as if such Disqualified Stock were redeemed, repaid or
repurchased on any date on which the amount of such Disqualified Stock is to
be determined pursuant to this Indenture; PROVIDED, HOWEVER, that if such
Disqualified Stock could not be required to be redeemed, repaid or
repurchased at the time of such determination, the redemption, repayment or
repurchase price will be the book value of such Disqualified Stock as
reflected in the most recent financial statements of such Person.
"DOMESTIC GUARANTOR" means Parent and each Domestic Subsidiary
of Parent that executes this Indenture on the Issue Date as a guarantor and each
other Domestic Subsidiary of Parent that thereafter Guarantees the Securities
pursuant to the terms of this Indenture, in each case unless and until such
Domestic Guarantor is released from its obligations under its Guaranty pursuant
to the terms of this Indenture.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary that is
not a Foreign Subsidiary, and "DOMESTIC WHOLLY OWNED SUBSIDIARY" means any
Domestic Subsidiary that is a Wholly Owned Subsidiary.
"EBITDA" of a Person for any period means the sum of
Consolidated Net Income, plus the following to the extent deducted in
calculating such Consolidated Net Income:
(1) all income tax expense of such Person and its Restricted
Subsidiaries;
(2) Consolidated Interest Expense of such Person;
(3) depreciation and amortization expense of such Person and
its Restricted Subsidiaries;
(4) all other non-cash charges of such Person and its
Restricted Subsidiaries (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash
expenditures in any future period); and
(5) any loss realized upon the sale or other disposition of
any assets of such Person or its Subsidiaries (including pursuant to
any Sale/Leaseback Transaction) not made in the ordinary course of
business and any loss realized upon the sale or other disposition of
any Capital Stock of any Person;
13
in each case for such period.
Notwithstanding the foregoing, the provisions above for
taxes, depreciation, amortization and non-cash charges of a Restricted
Subsidiary shall be added to Consolidated Net Income to compute EBITDA only
to the extent (and in the same proportion, including by reason of minority
interests) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income.
"ESOP" means any employee stock ownership plan or a trust
established by Parent or any of its Subsidiaries for the benefit of their
employees.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of
1934, as amended.
"FOREIGN GUARANTOR" means each Foreign Subsidiary of Parent
that, after the Issue Date, Guarantees the Securities pursuant to the terms
of this Indenture, in each case unless and until such Foreign Subsidiary is
released from its obligations under its Guaranty pursuant to the terms of
this Indenture.
"FOREIGN SUBSIDIARY" means any Subsidiary that (1) is not
organized under the laws of the United States, any state thereof or the
District of Columbia and (2) conducts substantially all of its business
operations outside of the United States.
"GAAP" means generally accepted accounting principles in
the United States of America as in effect as of the Issue Date, including
those set forth in:
(1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entity as approved by
a significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the
inclusion of financial statements (including PRO FORMA financial
statements) in periodic reports required to be filed pursuant to
Section 13 of
14
the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the
accounting staff of the SEC.
"GUARANTEE" means any obligation, contingent or otherwise,
of any Person directly or indirectly guaranteeing any Indebtedness of any
Person (including as a general partner of a partnership) and any obligation,
direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person (whether
arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or
otherwise); or
(2) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"GUARANTOR" means each Domestic Guarantor and, if any, each
Foreign Guarantor.
"GUARANTY" means a Guarantee by a Guarantor of the
Company's obligations with respect to the Securities.
"HEDGING OBLIGATIONS" of any Person means the obligations
of such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name
a Security is registered on the Registrar's books.
"INCUR" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Disqualified
Stock of a Person existing at the time such Person becomes a Restricted
Subsidiary (whether by merger, consolidation, acquisition or
15
otherwise) shall be deemed to be Incurred by such Person at the time it
becomes a Restricted Subsidiary. The term "INCURRENCE" when used as a noun
shall have a correlative meaning. Solely for purposes of determining
compliance with Section 4.03, (1) amortization of debt discount or the
accretion of principal with respect to a non-interest bearing or other
discount security, (2) the payment of regularly scheduled interest in the
form of additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends on Capital Stock in the form of additional
Capital Stock of the same class and with the same terms, and (3) unrealized
losses or charges in respect of Hedging Obligations (including those
resulting from the application of FAS 133), in each case will be deemed not
to be Incurrences of Indebtedness.
"INDEBTEDNESS" means, with respect to any Person on any
date of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any
premium on such indebtedness to the extent such premium has become due
and payable;
(2) all Capital Lease Obligations of such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction;
(5) the amount of all obligations of such Person with respect
to the payment, purchase, redemption or other acquisition or retirement
for value of any Disqualified Stock of such Person or, with respect to
any Preferred Stock of any Subsidiary of such Person, the principal
amount of such Preferred Stock to be determined in accordance with this
Indenture (but excluding, in each case, any accrued dividends);
16
(6) all obligations of the type referred to in clauses (1)
through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) of other Persons secured by any Lien on any assets of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of such Person,
if and to the extent, in the case of obligations of the types referred to in
clauses (1), (2) and (3) above, such obligations would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP.
Notwithstanding the foregoing, in connection with the
purchase by Parent or any Restricted Subsidiary of any business, the term
"Indebtedness" will exclude post-closing payment adjustments to which the
seller may become entitled to the extent such payment is determined by a
final closing balance sheet or such payment depends on the performance of
such business after the closing; PROVIDED, HOWEVER, that, at the time of
closing, the amount of any such payment is not determinable and, to the
extent such payment thereafter becomes fixed and determined, the amount is
paid within 30 days thereafter.
The amount of Indebtedness of any Person at any date shall
be the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at
such date; PROVIDED, HOWEVER, that in the case of Indebtedness sold at a
discount, the amount of such Indebtedness at any time will be the accreted
value thereof at such time.
"INDENTURE" means this Indenture as amended or supplemented
from time to time.
"INDEPENDENT QUALIFIED PARTY" means an investment banking
firm, accounting firm or appraisal firm of national
17
standing; PROVIDED, HOWEVER, that such firm is not an Affiliate of Parent.
"INTEREST" with respect to a Security includes additional
interest payable pursuant to the Registration Rights Agreement.
"INTEREST RATE AGREEMENT" means in respect of a Person, any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations
in interest rates.
"INVESTMENT" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition of Capital
Stock, Indebtedness or other similar instruments issued by such Person.
Except as otherwise provided for herein, the amount of an Investment shall be
its fair value at the time the Investment is made and without giving effect
to subsequent changes in value.
For purposes of the definition of "Unrestricted
Subsidiary," the definition of "Restricted Payment" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to
Parent's equity interest in such Subsidiary) of the fair market value
of the net assets of any Subsidiary at the time that such Subsidiary is
designated an Unrestricted Subsidiary; and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of
Directors.
"ISSUE DATE" means December 19, 2001.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature thereof).
18
"MANAGEMENT AGREEMENTS" means the management, service or
similar agreements pursuant to which Parent, any of its Qualified Restricted
Subsidiaries or any QJVGP or Qualified Joint Venture manages the assets and
businesses of any of its Restricted Subsidiaries or any Qualified Joint
Ventures.
"MINORITY INTERESTS" means the interests in income of
Parent's Restricted Subsidiaries held by Persons other than Parent or a
Restricted Subsidiary, as reflected on Parent's consolidated financial
statements.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NET AVAILABLE CASH" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise, and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring
Person of Indebtedness or other obligations relating to such properties or
assets or received in any other noncash form), in each case net of:
(1) all legal, accounting, investment banking, title and
recording tax expenses, commissions and other fees and expenses
incurred, relocation costs, and all Federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by
any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable
law, be repaid out of the proceeds from such Asset Disposition; and
(3) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset
Disposition and retained by Parent or any Restricted Subsidiary after
such Asset Disposition.
19
"NET CASH PROCEEDS," with respect to any issuance or sale
of Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither Parent nor any Restricted Subsidiary
(A) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (B) is
directly or indirectly liable as a guarantor or otherwise or (C)
constitutes the lender;
(2) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against
the issuer of such Indebtedness) would permit (upon notice, lapse of
time or both) any holder of any Indebtedness of Parent or any
Restricted Subsidiary to declare a default on such Indebtedness of
Parent or a Restricted Subsidiary or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders of such Indebtedness have been
notified in writing or have agreed in writing (in the agreement
relating to the Indebtedness or otherwise) that they will not have any
recourse to the assets of Parent or any of its Restricted Subsidiaries,
in each case, except for Investments made by Parent or a Restricted
Subsidiary in compliance with Section 4.03 and Section 4.04.
"OFFERING CIRCULAR" means the Confidential Offering
Circular dated December 14, 2001 issued by the Company in relation to
$150,000,000 aggregate principal amount of 10% Senior Subordinated Notes Due
2011 to be issued on the Issue Date.
"OFFICER" means the Chairman of the Board, the President,
any Vice President, the Treasurer or the Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers.
20
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
"PARENT" means United Surgical Partners International, Inc.
"PERMITTED ASSET DISPOSITION CONSIDERATION" means, in
connection with any Asset Disposition, (1) cash and Temporary Cash
Investments, (2) securities, notes and other obligations received by Parent
or any Restricted Subsidiary from the transferee that are converted into cash
within 90 days of receipt ("CONVERTED OBLIGATIONS"), (3) the assumption by a
Person (other than Parent or a Subsidiary of Parent) of Senior Indebtedness
of the Company or any Guarantor or Indebtedness of a Restricted Subsidiary of
Parent that is not a Guarantor (in each case other than Indebtedness owed to
Parent or a Subsidiary of Parent) and the release of Parent and its
Restricted Subsidiaries from all liability on such Indebtedness in connection
with such Asset Disposition, and (4) any other consideration received by
Parent or any Restricted Subsidiary in connection with such Asset Disposition
in an aggregate amount that, when taken together with all other amounts
outstanding under this clause (4) at the time of receipt of such
consideration, does not exceed the greater of (A) $5.0 million and (B) 5% of
Total Net Tangible Assets. For purposes of clause (4) of this definition, (i)
the "amount" of any item of consideration shall be the fair market value
thereof at the time of receipt by Parent or such Restricted Subsidiary, as
determined in good faith by the Board of Directors, and (ii) the "amount
outstanding" of any item of consideration at any time shall be (a) the amount
thereof at the time of receipt by Parent or such Restricted Subsidiary
(without giving effect to any subsequent changes in the fair market value
thereof) minus (b) the amount of cash, Temporary Cash Investments and
converted obligations received by Parent or a Restricted Subsidiary upon the
subsequent disposition of such item of consideration to the extent such
subsequent disposition was made (and the proceeds thereof have been applied)
in accordance with Section 4.07 (regardless of whether such subsequent
disposition constituted an Asset Disposition and as if such covenant required
100% of the consideration received to be cash, Temporary Cash Investments and
converted obligations), but in no event may the amount outstanding of any
item of consideration be less than zero.
21
"PERMITTED HOLDERS" means any of (i) Welsh, Carson,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VII, L.P. and any of its affiliates, (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and any of his affiliates, and (iii) any Person ("NEW PARENT") that acquires
all of the Capital Stock of Parent if the holders of securities that
represented 100% of the Voting Stock of Parent immediately prior to such
acquisition directly own 100% of the Voting Stock of New Parent immediately
after such acquisition and in the exact same percentages as they owned Voting
Stock of Parent immediately prior to such acquisition.
"PERMITTED INVESTMENT" means an Investment by Parent or any
Restricted Subsidiary in:
(1) the Company, a Domestic Guarantor or a Person that will,
upon the making of such Investment, become a Domestic Guarantor;
PROVIDED, HOWEVER, that the primary business of such Domestic Guarantor
is a Related Business;
(2) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Domestic Guarantor; PROVIDED, HOWEVER, that such Person's primary
business is a Related Business;
(3) a Qualified Restricted Subsidiary, a Person that will,
upon the making of such Investment, become a Qualified Restricted
Subsidiary, or a Person that transfers or conveys all or substantially
all of its assets to a Qualified Restricted Subsidiary;
(4) Qualified Joint Ventures and QJVGPs in an aggregate amount
that when taken together with all other Investments made pursuant to
this clause (4) does not exceed the sum of (A) $25.0 million, (B) if,
subsequent to the Issue Date, Parent issues Capital Stock (other than
Disqualified Stock) to a Person (other than an issuance to a Subsidiary
of Parent or an ESOP) in exchange for the acquisition by Parent or any
of its Restricted Subsidiaries of Capital Stock of a Qualified
Restricted Subsidiary or a Person that becomes a Qualified Restricted
Subsidiary as a result of such transaction or assets of a kind used or
usable in the primary business of Parent and its Restricted
Subsidiaries, an amount equal to 100% of the aggregate net proceeds of
such issuance, based upon the fair market value of the Capital Stock or
assets acquired
22
by Parent and its Restricted Subsidiaries, as determined by the Board
of Directors in good faith or, if such amount would be in excess of
$10.0 million, as determined by an Independent Qualified Party, and
(C) in the case of a Qualified Joint Venture that becomes a Qualified
Restricted Subsidiary because of additional Investments therein made
by Parent and its Subsidiaries, the portion (proportionate to Parent's
direct or indirect equity interest in such Qualified Restricted
Subsidiary) of the fair market value of the net assets of such
Qualified Joint Venture at the time such Qualified Joint Venture
becomes a Qualified Restricted Subsidiary; PROVIDED, HOWEVER, that the
amount under this clause (C) shall not exceed, in the case of each
such Qualified Joint Venture, the amount of Investments previously
made by Parent and its Restricted Subsidiaries in such Qualified Joint
Venture and any related QJVGP;
(5) cash and Temporary Cash Investments;
(6) receivables owing to Parent or any Restricted Subsidiary
if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; PROVIDED,
HOWEVER, that such trade terms may include such concessionary trade
terms as Parent or any such Restricted Subsidiary deems reasonable
under the circumstances;
(7) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business;
(8) loans or advances to employees or independent contractors
made in the ordinary course of business consistent with past practices
of Parent or such Restricted Subsidiary;
(9) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to Parent or
any Restricted Subsidiary or in satisfaction of judgments;
(10) any Investment made as a result of the receipt of
non-cash consideration from a sale of assets that was made pursuant to
and in compliance with Section 4.07;
23
(11) any Investments to the extent acquired in exchange for
the issuance of Capital Stock (other than Disqualified Stock) of
Parent;
(12) Investments in securities of trade creditors,
wholesalers, suppliers or customers received pursuant to any plan of
reorganization or similar arrangement;
(13) Hedging Obligations incurred in compliance with
Section 4.03; and
(14) Phoenix constituting a Guarantee by Parent of
Non-Recourse Debt of Phoenix in an amount not to exceed $20.0 million;
PROVIDED, THAT such Guarantee is Incurred pursuant to and in compliance
with Section 4.03(a)(1).
"PERMITTED JUNIOR SECURITIES" of a Person means Capital
Stock (other than Disqualified Stock) and Indebtedness of such Person that
are contractually subordinated in right of payment to all Senior Indebtedness
at least to the same extent as the Securities are subordinated to Senior
Indebtedness, and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Securities.
"PERMITTED PAYMENT RESTRICTION" means any consensual
encumbrance or restriction (each, a "RESTRICTION") on the ability of any
Restricted Subsidiary, QJVGP or Qualified Joint Venture to (a) pay dividends
or make any other distributions on its Capital Stock or pay any Indebtedness
owed to Parent or a Restricted Subsidiary, (b) make any loans or advances to
Parent or a Restricted Subsidiary or (c) transfer any of its property or
assets to Parent or a Restricted Subsidiary, which restriction satisfies all
of the following conditions: (i) such restriction becomes effective only upon
the occurrence of a default by such Restricted Subsidiary, QJVGP or Qualified
Joint Venture in the payment of principal of or interest on Indebtedness that
was Incurred by such Restricted Subsidiary, QJVGP or Qualified Joint Venture
in compliance with this Indenture, (ii) such restriction was entered into by
such Restricted Subsidiary, QJVGP or Qualified Joint Venture in good faith as
a condition to the Incurrence by such Restricted Subsidiary, QJVGP or
Qualified Joint Venture of such Indebtedness, and (iii) at the time such
restriction was Incurred, there did not exist, and Parent
24
and such Restricted Subsidiary, QJVGP or Qualified Joint Venture in good
faith did not believe it to be likely that in the reasonably foreseeable
future there would exist, a default under such Indebtedness or an event or
condition that, with the giving of notice or the passage of time or both,
would constitute such a default.
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PHOENIX" means an Unrestricted Subsidiary of Parent the
primary business of which is to construct and operate a short-stay surgical
hospital in the greater Phoenix, Arizona area and a surgery center in
Chandler, Arizona.
"PREFERRED STOCK," as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends or distributions, or as to
the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class
of such Person.
"PRINCIPAL" of a Security means the principal of the
Security plus the premium, if any, payable on the Security which is due or
overdue or is to become due at the relevant time.
"QUALIFIED EQUITY OFFERING" means the issuance after the
Issue Date of Common Stock of Parent to any Person or Persons (other than a
Subsidiary of Parent, an ESOP or an employee or director of Parent or any of
its Subsidiaries) in a transaction resulting in Net Cash Proceeds to Parent
of at least $20.0 million.
"QUALIFIED JOINT VENTURE" means any Person that is not a
Subsidiary and that satisfies all of the following requirements:
(1) Parent, a Qualified Restricted Subsidiary, a QJVGP or a
Qualified Joint Venture has a Management Agreement to provide
day-to-day management services to such Person;
(2) except for Permitted Payment Restrictions, there are no
restrictions, directly or indirectly, on
25
the ability of such Person to pay dividends or make distributions to
the holders of its Capital Stock;
(3) the Capital Stock of such Person consists solely of (A)
Capital Stock owned by Parent, its Qualified Restricted Subsidiaries
and QJVGPs, (B) Common Stock owned by Strategic Investors and (C)
directors' qualifying shares;
(4) the primary business of such Person is a Related
Business; and
(5) such Person has no Indebtedness other than Non-Recourse
Debt.
"QUALIFIED JOINT VENTURE GENERAL PARTNER" or "QJVGP" means any
Unrestricted Subsidiary of Parent that satisfies all of the following
requirements:
(1) the Capital Stock of such QJVGP consists solely of Capital
Stock owned by Parent and its Wholly Owned Subsidiaries and Common
Stock owned by Strategic Investors;
(2) except for Permitted Payment Restrictions, there are no
restrictions, directly or indirectly, on the ability of such QJVGP to
pay dividends or make distributions to the holders of its Capital
Stock;
(3) except to the extent restricted pursuant to a Permitted
Payment Restriction, such QJVGP customarily declares and pays regular
monthly, quarterly or semi-annual dividends or distributions to the
holders of its Capital Stock in an amount equal to substantially all of
the available cash flow of such QJVGP for such period, as determined in
good faith by the board of directors, board of governors or such other
individuals performing similar functions, subject to such ordinary and
customary reserves and other amounts as, in the good faith judgment of
such individuals, may be necessary so that the business of such QJVGP
may be properly and advantageously conducted at all times, and Parent
intends to cause such QJVGP to continue to declare and pay such regular
dividends or distributions in the manner set forth above;
(4) all Capital Stock owned by such QJVGP is Capital Stock of
a Qualified Joint Venture that is a partnership;
26
(5) such QJVGP conducts no business other than (A) owning
general partnership interests in, and making other Investments in,
Qualified Joint Ventures that are partnerships and (B) providing
day-to-day management services to Qualified Joint Ventures pursuant to
Management Agreements; and
(6) such QJVGP has no Indebtedness other than Non-Recourse
Debt.
"QUALIFIED RESTRICTED SUBSIDIARY" means (a) the Company and
(b) any other Restricted Subsidiary of Parent, including a Wholly Owned
Subsidiary, that satisfies all of the following requirements:
(1) except for Permitted Payment Restrictions, there are no
restrictions, directly or indirectly, on the ability of such Restricted
Subsidiary to pay dividends or make distributions to the holders of its
Capital Stock;
(2) except to the extent restricted pursuant to a Permitted
Payment Restriction, such Restricted Subsidiary customarily declares
and pays regular monthly, quarterly or semi-annual dividends or
distributions to the holders of its Capital Stock in an amount equal to
substantially all of the available cash flow of such Restricted
Subsidiary for such period, as determined in good faith by the board of
directors, board of governors or such other individuals performing
similar functions, subject to such ordinary and customary reserves and
other amounts as, in the good faith judgment of such individuals, may
be necessary so that the business of such Restricted Subsidiary may be
properly and advantageously conducted at all times, and Parent intends
to cause such Restricted Subsidiary to continue to declare and pay such
regular dividends or distributions in the manner set forth above;
(3) the Capital Stock of such Restricted Subsidiary consists
solely of (A) Capital Stock owned by Parent and its Qualified
Restricted Subsidiaries, (B) Common Stock owned by Strategic Investors
and (C) directors' qualifying shares; and
(4) the primary business of such Restricted Subsidiary is a
Related Business.
27
"REFINANCE" means, in respect of any Indebtedness, to
refinance or refund, or to issue other Indebtedness in exchange or
replacement for, such Indebtedness. "REFINANCED" and "REFINANCING" shall have
correlative meanings.
"REFINANCING INDEBTEDNESS" means Indebtedness that
Refinances any Indebtedness of the Company or any Restricted Subsidiary
existing on the Issue Date or Incurred in compliance with this Indenture,
including Indebtedness that Refinances Refinancing Indebtedness; PROVIDED,
HOWEVER, that:
(1) such Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or
if Incurred with original issue discount, the aggregate accreted value)
then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Indebtedness being Refinanced;
(4) if the Indebtedness being Refinanced is subordinated in
right of payment to the Securities or any Guaranty, such Refinancing
Indebtedness is subordinated in right of payment to the Securities or
such Guaranty on terms at least as favorable to the Securityholders as
those contained in the documentation governing the Indebtedness being
Refinanced; and
(5) such Refinancing Indebtedness is Incurred only by the
Person that is the obligor on the Indebtedness being Refinanced.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated December 19, 2001, among the Company, the Guarantors, Credit
Suisse First Boston Corporation, ▇▇▇▇▇▇ Brothers, Inc. and ▇▇ ▇▇▇▇▇
Securities Corporation.
28
"RELATED BUSINESS" means any business in which Parent was
engaged on the Issue Date and any business directly related to the primary
business in which Parent was engaged on the Issue Date.
"REPRESENTATIVE" means with respect to a Person any
trustee, agent or representative (if any) for an issue of Senior Indebtedness
of such Person.
"RESTRICTED PAYMENT" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to Parent or a Wholly Owned Subsidiary);
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of Parent or any Restricted
Subsidiary (other than a Wholly Owned Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into
Capital Stock of Parent that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations of such Person; or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"RESTRICTED SUBSIDIARY" means any Subsidiary that is not an
Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY LEVERAGE RATIO" as of any date of
determination means the ratio, on a PRO FORMA basis, of (1) the consolidated
Indebtedness of Parent's Restricted Subsidiaries (other than the Company and
the Domestic Guarantors) as of such date of determination (other than
Indebtedness Incurred pursuant to and in
29
compliance with Section 4.03(b)(1)) to (2) EBITDA of such Persons for the
period of the most recent four consecutive fiscal quarters for which
financial statements are available immediately preceding the date of such
determination plus the Minority Interests for such period.
"S&P" means Standard and Poor's Ratings Group.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating
to property owned by Parent or a Restricted Subsidiary on the Issue Date or
thereafter acquired by Parent or a Restricted Subsidiary whereby Parent or a
Restricted Subsidiary transfers such property to a Person and Parent or a
Restricted Subsidiary thereafter leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Securities issued under this
Indenture.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as
amended.
"SENIOR INDEBTEDNESS" means with respect to the Company or
any Guarantor:
(1) Indebtedness of such Person, whether outstanding on the
Issue Date or thereafter Incurred; and
(2) accrued and unpaid interest (including interest accruing
on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person whether or not post-filing
interest is allowed in such proceeding) in respect of (A) indebtedness
of such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which such Person is responsible or liable;
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are subordinate or PARI PASSU in right of
payment to the Securities or the Guaranty of such Person, as the case may be;
PROVIDED, HOWEVER, that Senior Indebtedness shall not include:
30
(A) any obligation of such Person to any Subsidiary;
(B) any liability for Federal, state, local or other taxes
owed or owing by such Person;
(C) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities);
(D) any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in
right of payment to any other Indebtedness or other obligation of such
Person; or
(E) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"SENIOR SUBORDINATED INDEBTEDNESS" means, with respect to a
Person, the Securities, the Guaranties and any other Indebtedness of such
Person that specifically provides that such Indebtedness is to rank PARI
PASSU with the Securities or such Guaranty, as the case may be, in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of such Person which is not Senior
Indebtedness of such Person.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary
that would be a "Significant Subsidiary" of Parent within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"STATED MATURITY" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment
of principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"STRATEGIC INVESTORS" means physicians, hospitals, health
systems, other healthcare providers, other healthcare companies and other
similar strategic joint venture partners which joint venture partners are
actively involved in the day-to-day operations of providing
31
surgical care and surgery-related services, or, in the case of physicians,
that have retired therefrom, individuals who are former owners or employees
of surgical care facilities purchased by Parent, any of its Restricted
Subsidiaries or any Qualified Joint Venture, and consulting firms that
receive Common Stock solely as consideration for consulting services
performed.
"SUBORDINATED OBLIGATION" means, with respect to a Person,
any Indebtedness of such Person (whether outstanding on the Issue Date or
thereafter Incurred) which is subordinate or junior in right of payment to
the Securities or a Guaranty of such Person, as the case may be, pursuant to
a written agreement to that effect.
"SUBSIDIARY" means, with respect to any Person:
(A) any corporation, association, partnership, limited
liability company or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or
controlled, directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person;
or
(3) one or more Subsidiaries of such Person; or
(B) any corporation, association, partnership, limited
liability company or other business entity, the financial statements of which
are consolidated with the Parent's financial statements under GAAP as applied
by the Parent on the Issue Date.
Unless otherwise specified or appropriate in the context,
"Subsidiary" means a Subsidiary of Parent, and includes the Company where
appropriate in the context.
"SUPPLEMENTAL GUARANTY AGREEMENT" means a supplemental
indenture, in a form reasonably satisfactory to the Trustee, pursuant to
which a Guarantor guarantees the Company's obligations with respect to the
Securities on the terms provided for in this Indenture.
"TEMPORARY CASH INVESTMENTS" means any of the following:
32
(1) any investment in direct obligations of the United States
of America or any agency thereof or obligations guaranteed by the
United States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date
of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any State
thereof or any foreign country recognized by the United States of
America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50.0 million (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (1)
above entered into with a bank meeting the qualifications described in
clause (2) above;
(4) investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a corporation (other than
an Affiliate of Parent) organized and in existence under the laws of
the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇ or
"A-1" (or higher) according to S&P; and
(5) investments in securities with maturities of six months or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at
least "A" by S&P or "A" by ▇▇▇▇▇'▇.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the Issue Date.
"TOTAL NET TANGIBLE ASSETS" means the total consolidated
net assets, less goodwill and intangibles, of
33
Parent and its Restricted Subsidiaries, as shown on the balance sheet of
Parent as of the end of the most recent fiscal quarter for which financial
statements are available.
"TRUSTEE" means U.S. Trust Company of Texas, N.A. until a
successor replaces it and, thereafter, means the successor.
"TRUST OFFICER" means any officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"UNIFORM COMMERCIAL CODE" means the
New York Uniform
Commercial Code as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means:
(1) any Subsidiary of Parent that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below;
(2) any Subsidiary of an Unrestricted Subsidiary; and
(3) Global Healthcare Partners, Ltd., Phoenix, the QJVGPs in
existence on the Issue Date and their respective Subsidiaries, if any;
in each case unless and until such time as such Subsidiary is designated a
Restricted Subsidiary for purposes of this Indenture.
The Board of Directors may designate any Subsidiary of
Parent (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary if (A) neither such Subsidiary nor any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on
any property of, Parent or any other Subsidiary of Parent that is not a
Subsidiary of the Subsidiary to be so designated, (B) such designation would
be permitted under Section 4.04 (the amount of such Restricted Payment being
calculated in the manner set forth in the definition of the term
"Investment"),(C) such Subsidiary has no Indebtedness other than Non-Recourse
Debt and (D)immediately after giving effect to such designation, the Company
could Incur $1.00 of additional Indebtedness under Section 4.03(a)(1).
34
The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary if, immediately after giving effect
to such designation (A) the Company could Incur $1.00 of additional
Indebtedness under Section 4.03(a)(1) and (B) no Default shall have occurred
and be continuing.
Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer's option.
"VOTING STOCK" of a Person means all classes of Capital
Stock or other interests (including partnership interests) of such Person
then outstanding and normally entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof.
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned
by Parent or one or more Wholly Owned Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- ----------
"Affiliate Transaction" .................................... 4.08(a)
"Bankruptcy Law" ........................................... 6.01
"Blockage Notice" .......................................... 10.03/12.03
"Change of Control" ........................................ 4.02(a)
"Change of Control Offer" .................................. 4.02(b)
"covenant defeasance option" ............................... 8.01(b)
"Custodian" ................................................ 6.01
"Event of Default" ......................................... 6.01
"legal defeasance option" .................................. 8.01(b)
"Legal Holiday" ............................................ 13.08
"Obligations" .............................................. 11.01
35
"Offer" .................................................... 4.07(b)
"Offer Amount" ............................................. 4.07(c)(2)
"Offer Period" ............................................. 4.07(c)(2)
"pay its Guaranty" ......................................... 12.03
"pay the Securities" ....................................... 10.03
"Paying Agent" ............................................. 2.03
"Payment Default" .......................................... 10.03/12.03
"Payment Blockage Period" .................................. 10.03/12.03
"Purchase Date" ............................................ 4.07(c)(1)
"Registrar"................................................. 2.03
"Required Filing Dates"..................................... 4.13
"Successor Company" ........................................ 5.01(a)(1)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT. This Indenture is subject to the mandatory provisions of the
TIA which are incorporated by reference in and made a part of this Indenture.
The following TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
36
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally
issued shall refer to the Issue Date.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange
Securities are set forth in the Appendix A attached hereto which is hereby
incorporated in and expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to Appendix A, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in
37
Exhibit 1 to Appendix A and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers
shall sign the Securities for the Company by manual or facsimile signature.
The Company's seal may be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer
holds that office at the time the Trustee authenticates the Security, the
Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "REGISTRAR") and an office or
agency where Securities may be presented for payment (the "PAYING AGENT").
The Registrar shall keep a register of the Securities and of their transfer
and exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "REGISTRAR" includes any appointed
co-registrar and the term "PAYING AGENT" includes any additional paying agent.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to
this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent.
The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall
38
act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Company or any Wholly Owned Subsidiary
incorporated or organized within The United States of America may act as
Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior
to each due date of the principal and interest on any Security, the Company
shall deposit with the Paying Agent a sum sufficient to pay such principal
and interest when so becoming due. The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Securityholders. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee, in
writing, at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities shall
be issued in registered form and shall be transferable only upon the
surrender of a Security for registration of transfer. When a Security is
presented to the Registrar or a co-registrar with a request to register a
transfer, the Registrar shall register the transfer as requested if the
requirements of this Indenture and Section 8-401(a) of the Uniform Commercial
Code are met. When Securities are presented to the Registrar or a
co-registrar
39
with a request to exchange them for an equal principal amount of Securities
of other denominations, the Registrar shall make the exchange as requested if
the same requirements are met.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated
Security is surrendered to the Registrar or if the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue, and the Trustee shall authenticate, a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code
are met and the Holder satisfies any other reasonable requirements of the
Trustee. If required by the Trustee or the Company, such Holder shall furnish
an indemnity bond sufficient in the judgment of the Company and the Trustee
to protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Security.
Every replacement Security is an additional obligation of
the Company.
SECTION 2.08. OUTSTANDING SECURITIES. Securities
outstanding at any time are all Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation and
those described in this Section as not outstanding. A Security does not cease
to be outstanding because the Company or an Affiliate of the Company holds
the Security.
If a Security is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with
respect to the Securities (or portions thereof) to be redeemed or maturing,
as the case may be, and the Paying Agent is not prohibited from paying such
money to the Securityholders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest on them ceases to accrue.
40
SECTION 2.09. TEMPORARY SECURITIES. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations
that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.
SECTION 2.10. CANCELLATION. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee and no one
else shall cancel and destroy (subject to the record retention requirements
of the Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such
destruction to the Company unless the Company directs the Trustee to deliver
canceled Securities to the Company. The Company may not issue new Securities
to replace Securities it has redeemed, paid or delivered to the Trustee for
cancellation.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults
in a payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in
any lawful manner. The Company may pay the defaulted interest to the persons
who are Securityholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date
to the reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the
Securities may use "CUSIP" numbers and corresponding "ISINs" (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers and
corresponding "ISINs" in notices of redemption as a convenience to Holders;
PROVIDED, HOWEVER, that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall
41
not be affected by any defect in or omission of such numbers.
SECTION 2.13. ISSUANCE OF ADDITIONAL SECURITIES. The
Company shall be entitled, subject to its compliance with Section 4.03, to
issue Additional Securities under this Indenture which shall have identical
terms as the Initial Securities issued on the Issue Date, other than with
respect to the date of issuance and issue price. The Initial Securities
issued on the Issue Date and any Additional Securities issued in exchange
therefor shall be treated as a single class for all purposes under this
Indenture.
With respect to any Additional Securities, the Company
shall set forth in a resolution of the Board of Directors and an Officers'
Certificate, a copy of each of which shall be delivered to the Trustee, the
following information:
(1) the aggregate principal amount of such Additional
Securities to be authenticated and delivered pursuant to this
Indenture;
(2) the issue price, the issue date and the CUSIP number and
corresponding ISIN of such Additional Securities; and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Initial Securities as
set forth in Appendix A or shall be issued in the form of Exchange
Securities as set forth in Exhibit A.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify
the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities pursuant to
which the redemption will occur.
The Company shall give each notice to the Trustee provided
for in this Section at least 60 days before the redemption date unless the
Trustee consents to a shorter period. Such notice shall be accompanied by an
Officers'
42
Certificate and an Opinion of Counsel from the Company to the effect that
such redemption will comply with the conditions herein.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If
fewer than all the Securities are to be redeemed, the Trustee shall select
the Securities to be redeemed PRO RATA or by lot or by a method that complies
with applicable legal and securities exchange requirements, if any, and that
the Trustee in its sole discretion shall deem to be fair and appropriate and
in accordance with methods generally used at the time of selection by
fiduciaries in similar circumstances. The Trustee shall make the selection
from outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in principal amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but
not more than 60 days before a date for redemption of Securities, the Company
shall mail a notice of redemption by first-class mail to each Holder of
Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the
43
terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption
date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number or corresponding ISIN, if any, listed in
such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice
of redemption is mailed, Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the
notice. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price stated in the notice, plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date).
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest
on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender
of a Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate for the Holder (at the Company's expense) a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The
44
Company shall promptly pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and in this Indenture.
Payment shall be made in
New York,
New York unless the Trustee otherwise
specifies. Principal and interest shall be considered paid on the date due if
on such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Securityholders on that date pursuant to the terms
of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. CHANGE OF CONTROL.
(a) Upon the occurrence of any of the following events
(each a "CHANGE OF CONTROL"), each Holder shall have the right to require
that the Company purchase such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase
plus accrued and unpaid interest, if any, to the date of purchase (subject to
the right of holders of record on the relevant record date to receive
interest on the relevant interest payment date), in accordance with the terms
contemplated in Section 4.02(b):
(1) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) (other than a Permitted Holder or Parent or
a Wholly Owned Subsidiary of Parent as a stockholder of the Company) is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (1)
such person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of
the Voting Stock of Parent or the Company;
(2) individuals who on the Issue Date constituted the Board of
Directors (together with any new directors whose election by such Board
of Directors or whose nomination for election by the stockholders of
Parent was approved by a vote of at least a majority of the directors
of Parent then still in office who were either directors on the Issue
Date
45
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office;
(3) the adoption of a plan relating to the liquidation
or dissolution of the Company or Parent; or
(4) the merger or consolidation of the Company or Parent with
or into another Person (other than a Permitted Holder) or the merger of
another Person (other than a Permitted Holder, Parent or the Company)
with or into the Company or Parent, or the sale of all or substantially
all the assets of Parent and its Restricted Subsidiaries (determined on
a consolidated basis) to another Person (other than a Permitted
Holder), other than a transaction following which, in the case of a
merger or consolidation transaction, holders of securities that
represented 100% of the Voting Stock of the Company or Parent, as
applicable, immediately prior to such transaction (or other securities
into which such securities are converted as part of such merger or
consolidation transaction) own directly or indirectly at least a
majority of the voting power of the Voting Stock of the surviving
Person in such merger or consolidation transaction immediately after
such transaction and in substantially the same proportion as before the
transaction.
In the event that at the time of such Change of Control,
the terms of the Credit Agreement prohibit the Company from making a Change
of Control Offer or from purchasing the Securities pursuant to this Section
4.02, the Company shall, prior to the mailing of the notice to Holders
provided for in Section 4.02(b) below, but in any event within 30 days
following any Change of Control: (1) repay in full all Indebtedness
outstanding under the Credit Agreement; or (2) obtain the requisite consent
under the Credit Agreement to permit the purchase of the Securities as
provided for in Section 4.02(b).
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"CHANGE OF CONTROL OFFER") stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company
46
to purchase such Holder's Securities at a purchase price in cash equal
to 101% of the principal amount thereof on the date of purchase, plus
accrued and unpaid interest, if any, to the date of purchase (subject
to the right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);
(2) the purchase date (which shall be no earlier than 30 days
nor later than 90 days from the date such notice is mailed); and
(3) the instructions, as determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed,
to the Company at the address specified in the notice at least three Business
Days prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business
Day prior to the purchase date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing their election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Company to the Trustee
for cancellation, and the Company shall pay the purchase price plus accrued
and unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this
Section, the Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section applicable to a Change of Control
Offer made by the Company and purchases all Securities properly tendered and
not withdrawn under the Change of Control Offer.
(f) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the purchase of Securities
pursuant to
47
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue of its
compliance with such securities laws or regulations.
SECTION 4.03. LIMITATION ON INDEBTEDNESS.
(a) The Company and Parent shall not, and shall not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any
Indebtedness; PROVIDED, HOWEVER, that:
(1) the Company and the Domestic Guarantors shall be entitled
to Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto and to the use of the proceeds therefrom on a pro
FORMA basis, no Event of Default has occurred and is continuing and the
Consolidated Coverage Ratio exceeds (A) during the period from the
Issue Date to December 15, 2003, 2.25 to 1, and (B) from and after
December 15, 2003, 2.5 to 1; and
(2) Restricted Subsidiaries of Parent (other than the Company
and the Domestic Guarantors) shall be entitled to Incur Indebtedness
if, on the date of such Incurrence and after giving effect thereto and
to the use of the proceeds therefrom on a PRO FORMA basis, (A) such
Restricted Subsidiary would constitute a Qualified Restricted
Subsidiary, (B) the Company would have been entitled to Incur at least
$1.00 of additional Indebtedness pursuant to Section 4.03(a)(1) and (C)
the Restricted Subsidiary Leverage Ratio is greater than zero and less
than or equal to 1.25 to 1.
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(b) Notwithstanding the foregoing paragraph (a), Parent and
its Restricted Subsidiaries shall be entitled to Incur any or all of the
following Indebtedness:
(1) (A) Indebtedness of the Company and the Domestic
Guarantors Incurred pursuant to Credit Facilities, and Indebtedness
constituting Guarantees thereof Incurred by the Company and the
Guarantors, and (B) Indebtedness of USPE Holdings, Ltd. Incurred
pursuant to Credit Facilities, and Indebtedness constituting Guarantees
thereof Incurred by the Company, the Guarantors and Foreign
Subsidiaries; PROVIDED, HOWEVER, that after giving effect to any such
Incurrence, the aggregate principal amount of all Indebtedness Incurred
under this clause (1) and then outstanding does not exceed $100.0
million less the sum of all principal payments with respect to such
Indebtedness pursuant to Section 4.07(a)(3)(A);
(2) (A) short-term Indebtedness of Parent or any of its Wholly
Owned Subsidiaries owed to a Restricted Subsidiary, a Qualified Joint
Venture or any other Person in a Related Business that receives
day-to-day management services from Parent, a Qualified Restricted
Subsidiary, a QJVGP or a Qualified Joint Venture pursuant to a
Management Agreement to the extent such Indebtedness is Incurred by
Parent or such Wholly Owned Subsidiary solely as a result of cash
advanced by such Restricted Subsidiary, Qualified Joint Venture or
other Person to Parent or such Wholly Owned Subsidiary in the ordinary
course of business for purposes of cash management; PROVIDED, HOWEVER,
that any subsequent issuance or transfer of any Capital Stock which
results in any such creditor under this subparagraph (A) ceasing to be
a Restricted Subsidiary, a Qualified Joint Venture or a Person of the
type described above, or any subsequent transfer of such Indebtedness
(other than to Parent or a Qualified Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness
by the obligor thereon; and (B) Indebtedness owed to and held by Parent
or a Wholly Owned Subsidiary; PROVIDED, HOWEVER, that any subsequent
issuance or transfer of any Capital Stock which results in any such
Wholly Owned Subsidiary under this subparagraph (B) ceasing to be a
Wholly Owned Subsidiary, or any subsequent transfer of such
Indebtedness (other than to Parent or a Wholly Owned Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the
49
obligor thereon; PROVIDED FURTHER, HOWEVER, in the case of both
subparagraphs (A) and (B), if the Company or a Guarantor is the
obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations
with respect to the Securities or such Guarantor's Guaranty;
(3) the Securities, the Exchange Securities (other than any
Additional Securities) and the Guaranties;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this Section
4.03(b));
(5) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (3) or (4)
of this Section 4.03(b) or this clause (5);
(6) Hedging Obligations consisting of Interest Rate Agreements
directly related to Indebtedness permitted to be Incurred by Parent and
its Restricted Subsidiaries pursuant to this Indenture;
(7) Hedging Obligations consisting of Currency Agreements
entered into for bona fide hedging purposes of Parent and its
Restricted Subsidiaries and not for speculative purposes;
(8) obligations in respect of letters of credit to support
workers compensation obligations, performance, bid and surety bonds and
completion guarantees provided by Parent or any Restricted Subsidiary
in the ordinary course of business;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business;
PROVIDED, HOWEVER, that such Indebtedness is extinguished within two
Business Days of its Incurrence;
(10) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations,
or from letters of credit, surety bonds or performance bonds securing
any obligations of Parent or any Restricted Subsidiary pursuant to such
agreements, in each case incurred in
50
connection with the disposition of any business assets or Restricted
Subsidiaries of Parent in a principal amount not to exceed the gross
proceeds actually received by Parent and its Restricted Subsidiaries
in connection with such disposition; and
(11) Indebtedness of the Company, the Domestic Guarantors and
Qualified Restricted Subsidiaries in an aggregate principal amount that
when taken together with all other Indebtedness outstanding under this
clause (11) on the date of such Incurrence does not exceed $10.0
million.
(c) Notwithstanding the foregoing, the Company and Parent
shall not, and shall not permit any Restricted Subsidiary to, Incur any
Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations of the
Company or any Guarantor unless such Indebtedness shall be subordinated to
the Securities or the applicable Guaranty to at least the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with this
Section 4.03, (1) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described above, the
Company, in its sole discretion, shall classify such item of Indebtedness at
the time of Incurrence and only be required to include the amount and type of
such Indebtedness in one of the above clauses and (2) the Company shall be
entitled to divide and classify an item of Indebtedness in more than one of
the types of Indebtedness described above.
(e) Notwithstanding Section 4.03(a) and 4.03(b), the
Company and Parent shall not, and shall not permit any Restricted Subsidiary
to: (1) in the case of the Company or any Guarantor, Incur any Indebtedness
if such Indebtedness is subordinate or junior in right of payment to any
Senior Indebtedness of such Person, unless such Indebtedness is Senior
Subordinated Indebtedness or is expressly subordinated in right of payment to
Senior Subordinated Indebtedness of such Person and (2) in the case of a
Restricted Subsidiary that is not a Guarantor, Incur any Indebtedness that is
subordinate or junior in right of payment to any other Indebtedness of such
Restricted Subsidiary.
51
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company and Parent shall not, and shall not permit
any Restricted Subsidiary, directly or indirectly, to make a Restricted
Payment if at the time Parent or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not entitled to Incur an additional $1.00
of Indebtedness pursuant to Section 4.03(a)(1); or
(3) the aggregate amount of such Restricted Payment, all other
Restricted Payments since the Issue Date made pursuant to this clause
(a)(3) and all Restricted Payments since the Issue Date made pursuant
to paragraph (b) of Section 4.04 (other than subparagraphs (b)(3),
(b)(4), (b)(5), (b)(6), (b)(8), (b)(9), (b)(10) and (b)(11)) would
exceed the sum of (without duplication):
(A) 50% of the Consolidated Net Income of Parent
accrued during the period (treated as one accounting period)
from the beginning of the fiscal quarter immediately following
the fiscal quarter during which the Issue Date occurs to the
end of the most recent fiscal quarter for which financial
statements are available immediately preceding the date of
such Restricted Payment (or, in case such Consolidated Net
Income shall be a deficit, minus 100% of such deficit); PLUS
(B) 100% of the aggregate Net Cash Proceeds received
by Parent from the issuance or sale of its Capital Stock
(other than Disqualified Stock) subsequent to the Issue Date
(other than an issuance or sale to a Subsidiary of Parent and
other than an issuance or sale to an ESOP) and 100% of any
cash capital contribution received by Parent from its
stockholders subsequent to the Issue Date; PLUS
(C) the amount by which Indebtedness of Parent is
reduced on Parent's balance sheet upon the conversion or
exchange (other than by a Subsidiary of Parent) subsequent to
the Issue Date of any Indebtedness of Parent convertible or
52
exchangeable for Capital Stock (other than Disqualified Stock)
of Parent (less the amount of any cash, or the fair value of
any other property, distributed by Parent upon such conversion
or exchange); PLUS
(D) an amount equal to the sum of (x) the net
reduction in the Investments (other than Permitted
Investments) made by Parent or any Restricted Subsidiary in
any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds
realized on the sale of such Investment and proceeds
representing the return of capital (excluding dividends,
distributions and other amounts that contribute to
Consolidated Net Income) in each case received by the Company,
any Domestic Guarantor or any other Restricted Subsidiary of
Parent (but in the case of any such Restricted Subsidiary
other than the Company or a Domestic Guarantor, only the
portion thereof proportionate to Parent's direct or indirect
equity interest in such Restricted Subsidiary), and (y) the
portion (proportionate to Parent's direct or indirect equity
interest in such Subsidiary) of the fair market value of the
net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary;
PROVIDED, HOWEVER, that the foregoing sum shall not exceed, in
the case of any such Person or Unrestricted Subsidiary, the
amount of Investments (excluding Permitted Investments)
previously made (and treated as a Restricted Payment) by
Parent and its Restricted Subsidiaries in such Person or
Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit
the following Restricted Payments (but in the case of clause (1) below, only
if no Default has occurred and is continuing or would result therefrom):
(1) dividends or distributions paid within 60 days after the
date of declaration thereof if at such date of declaration such
dividend or distribution would have complied with this Section 4.04;
(2) any Restricted Payment made out of the Net Cash Proceeds
of the substantially concurrent sale of, or made by exchange for,
Capital Stock of Parent
53
(other than Disqualified Stock and other than Capital Stock issued
or sold to a Subsidiary of Parent or an ESOP to the extent that such
sale to an ESOP is financed by loans from or guaranteed by Parent or
any Restricted Subsidiary unless such loans have been repaid with cash
on or prior to the date of determination) or a substantially
concurrent cash capital contribution received by Parent from one or
more of its stockholders;
(3) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or a Guarantor made by exchange for, or out of the proceeds of
the substantially concurrent Incurrence or sale of, Indebtedness of the
Company or a Guarantor that (A) is permitted to be Incurred pursuant to
Section 4.03 and (B) is Refinancing Indebtedness;
(4) the purchase, redemption or other acquisition or
retirement for value of shares of Capital Stock of Parent or any of its
Subsidiaries from employees, former employees, directors or former
directors of Parent or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by the
Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital Stock;
PROVIDED, HOWEVER, that the aggregate amount of such purchases and
other acquisitions shall not exceed $2.0 million in any calendar year;
(5) the payment of any dividend or distribution to any holder
of Capital Stock of a Qualified Restricted Subsidiary of Parent as part
of a PRO RATA dividend or distribution to all holders of such Capital
Stock;
(6) the purchase, redemption or other acquisition or
retirement for value of all but not less than all shares of Common
Stock of a Qualified Restricted Subsidiary owned by a Strategic
Investor if such purchase, redemption or other acquisition or
retirement for value is made for consideration not in excess of the
fair market value of such Common Stock;
54
(7) cash payments to holders of Parent's Capital Stock in lieu
of issuance of fractional shares of its Capital Stock so long as the
aggregate amount of payments pursuant to this clause (7) does not
exceed $100,000 in any calendar year;
(8) repurchases of Capital Stock deemed to occur upon the
exercise of stock options or warrants if such Capital Stock represents
a portion of the exercise price thereof;
(9) repurchases of Capital Stock deemed to occur upon the
acceptance of such Capital Stock as the repayment of loans made to
employees of Parent or any Restricted Subsidiary;
(10) the repayment on the Issue Date of: (A) Indebtedness in
an amount not to exceed $41.5 million owed by USP Domestic Holdings,
Inc. to Credit Suisse First Boston, ▇▇▇▇▇▇ Commercial Paper Inc.,
Societe Generale and the other lender parties to such credit agreement
in connection with the USP Domestic Holdings, Inc. Credit Agreement
dated as of June 13, 2001, (B) Indebtedness in an amount not to exceed
$33.6 million owed by United Surgical Partners Europe, S.L. to a
syndicate of lenders for which Societe Generale is administrative agent
in connection with the credit facility of United Surgical Partners
Europe, S.L. that was in existence prior to the Issue Date and (C)
Indebtedness in an amount not to exceed $36.0 million owed by USP
Domestic Holdings, Inc. to WCAS Capital Partners III, L.P. in
connection with the 10% senior subordinated notes of USP Domestic
Holdings, Inc., in each case PROVIDED THAT the funds used to make such
repayments are advanced by the Company to USP Domestic Holdings, Inc.
and United Surgical Partners Europe, S.L., as appropriate, pursuant to
intercompany advances made in compliance with Section 4.11;
(11) the redemption on the Issue Date by Parent of its Series
D Redeemable Preferred Stock for an aggregate redemption price not in
excess of $21.1 million, PROVIDED THAT the funds used to make such
redemption are advanced by the Company directly to Parent pursuant to
an intercompany advance made in compliance with Section 4.11; and
(12) Restricted Payments in the aggregate amount of
$10.0 million.
55
(c) The amount of all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted Payment of the
assets proposed to be transferred by Parent or such Restricted Subsidiary, as
the case may be, in accordance with the Restricted Payment. The fair market
value of any non-cash Restricted Payment shall be determined in good faith by
the Board of Directors whose resolution with respect thereto shall be
delivered to the Trustee.
SECTION 4.05. LIMITATION ON LIENS. The Company and Parent
shall not, and shall not permit any Guarantor to, directly or indirectly,
create, incur, assume or suffer to exist or become effective any Lien
securing Indebtedness of any kind (other than Senior Indebtedness), on or
with respect to any of its assets, whether owned at the Issue Date or
thereafter acquired, unless (a) in the case of any Lien securing Subordinated
Obligations, the Securities (or the appropriate Guaranty) are secured by a
Lien on such assets that is senior in priority to such Lien and (b) in the
case of any other Lien, the Securities (or the appropriate Guaranty) are
either secured equally and ratably with such Indebtedness or are secured by a
Lien on such assets that is senior in priority to such Lien.
SECTION 4.06. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS
FROM RESTRICTED SUBSIDIARIES. The Company and Parent shall not, and shall not
permit any Restricted Subsidiary to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock to Parent or a Restricted Subsidiary or
pay any Indebtedness owed to Parent or a Restricted Subsidiary, (b) make any
loans or advances to Parent or a Restricted Subsidiary or (c) transfer any of
its property or assets to Parent or a Restricted Subsidiary, except:
(1) with respect to clauses (a), (b) and (c):
(A) any encumbrance or restriction pursuant to (i)
the Credit Agreement as entered into on the Issue Date and
(ii) any agreement (other than (x) agreements relating to
Indebtedness and (y) charter provisions and other agreements
relating to Capital Stock) in effect at or entered into on the
Issue Date;
56
(B) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or
prior to the date on which such Restricted Subsidiary was
acquired by Parent or any Restricted Subsidiary (other than
Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by Parent) and
outstanding on such date;
(C) any encumbrance or restriction pursuant to an
agreement effecting an amendment, modification, restatement,
renewal, increase, supplement, replacement or Refinancing of
an agreement referred to in Section 4.06(1)(A) or 4.06(1)(B)
or this clause (1)(C) or contained in any amendment to an
agreement referred to in Section 4.06(1)(A) or 4.06(1)(B) or
this clause (1)(C); PROVIDED, HOWEVER, that the encumbrances
and restrictions with respect to such Restricted Subsidiary
contained in any such refinancing agreement or amendment are
no less favorable to the Securityholders than encumbrances and
restrictions with respect to such Restricted Subsidiary
contained in such predecessor agreements;
(D) restrictions on cash or other deposits imposed by
customers under contracts entered into in the ordinary course
of business;
(E) restrictions in Management Agreements that
require the payment of management fees to Parent or one of its
Qualified Restricted Subsidiaries prior to payment of
dividends or distributions;
(F) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for
the sale of such Restricted Subsidiary (whether by stock sale,
asset sale, merger, consolidation or otherwise) pending the
closing of such sale or disposition; and
57
(G) any Permitted Payment Restriction;
(2) with respect to clause (c) only:
(A) any such encumbrance or restriction consisting
of customary nonassignment provisions in leases and licenses;
and
(B) restrictions contained in security agreements,
mortgages and other similar agreements securing Indebtedness
of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such
agreements; and
(3) with respect to clauses (b) and (c) only, any encumbrance
or restriction with respect to a Qualified Restricted Subsidiary with
respect to any agreement or charter provision evidencing Indebtedness
or Capital Stock otherwise permitted under this Indenture; PROVIDED,
HOWEVER, that the provisions relating to such encumbrance or
restriction contained in such agreement or charter provision are not
less favorable to the Holders than the encumbrances and restrictions
described in Section 4.06(1)(A).
SECTION 4.07. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK.
(a) The Company and Parent shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless:
(1) Parent or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to
the fair market value (including as to the value of all non-cash
consideration), as determined in good faith by the Board of Directors,
of the shares or assets subject to such Asset Disposition;
(2) at least 75% of the consideration thereof received by
Parent or such Restricted Subsidiary is in the form of Permitted Asset
Disposition Consideration;
(3) with respect to Asset Dispositions by Parent and its
Wholly Owned Subsidiaries, an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by Parent or such Wholly
Owned Subsidiary, as the case may be:
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(A) FIRST, to the extent the Company so elects (or is
required by the terms of any Indebtedness), to prepay, repay,
purchase, repurchase, redeem, defease or otherwise acquire or
retire for value Senior Indebtedness of the Company or any
Guarantor or Indebtedness of a Wholly Owned Subsidiary of
Parent that is not a Guarantor (in each case other than
Indebtedness owed to Parent or a Subsidiary of Parent) within
one year from the date of such Asset Disposition;
(B) SECOND, to the extent of the balance of such Net
Available Cash after application in accordance with clause
(A), to the extent the Company so elects, to acquire
Additional Assets within one year from the date of such Asset
Disposition; and
(C) THIRD, to the extent of the balance of such Net
Available Cash after application in accordance with clauses
(A) and (B), to make an offer to Securityholders (and to
holders of other Senior Subordinated Indebtedness of the
Company designated by the Company) to purchase Securities (and
such other Senior Subordinated Indebtedness of the Company)
pursuant to and subject to the conditions contained in this
Indenture; and
(4) with respect to Asset Dispositions by Restricted
Subsidiaries that are not Wholly Owned Subsidiaries, an amount equal to
100% of the Net Available Cash from such Asset Disposition is applied
by such Restricted Subsidiary:
(A) FIRST, to the extent the Restricted Subsidiary so
elects (or is required by the terms of any Indebtedness), to
prepay, repay, purchase, repurchase, redeem, defease or
otherwise acquire or retire for value Indebtedness of such
Restricted Subsidiary within one year from the date of such
Asset Disposition;
(B) SECOND, to the extent of the balance of such Net
Available Cash after application in accordance with clause
(A), to the extent the Restricted Subsidiary so elects, to
acquire Additional Assets within one year from the date of
such Asset Disposition; and
59
(C) THIRD, to the extent of the balance of such Net
Available Cash after application in accordance with clauses
(A) and (B) of this Section 4.07(a)(4), to distribute such Net
Available Cash PRO RATA to holders of Common Stock of such
Restricted Subsidiary;
PROVIDED, THAT, upon receipt of any Net Available Cash from a Restricted
Subsidiary pursuant to subparagraph (a)(4)(A) or (a)(4)(C) of this Section
4.07, a Restricted Subsidiary that is not a Wholly Owned Subsidiary shall
apply such Net Available Cash in accordance with Section 4.07(a)(4) above,
and Parent or a Wholly Owned Subsidiary shall apply such Net Available Cash
in accordance with Section 4.07(a)(3) above; and
PROVIDED, HOWEVER, that in connection with any prepayment, repayment,
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of Indebtedness pursuant to subparagraph (a)(3)(A) or
(a)(4)(A) of this Section 4.07, Parent or such Restricted Subsidiary shall
permanently retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased.
To the extent that any Net Available Cash remains after
compliance with clauses (a)(3) and (a)(4) of this Section 4.07, Parent or any
Wholly Owned Subsidiary, as the case may be, may use such Net Available Cash
for any purpose not otherwise prohibited by this Indenture.
Notwithstanding the foregoing provisions of this Section
4.07, Parent and its Restricted Subsidiaries shall not be required to apply
any Net Available Cash in accordance with this Section 4.07 except to the
extent that the aggregate Net Available Cash from all Asset Dispositions
which is not applied in accordance with this Section 4.07 exceeds $10.0
million. Pending application of Net Available Cash pursuant to this Section
4.07, such Net Available Cash shall be invested in Temporary Cash Investments
or applied to temporarily reduce revolving credit indebtedness.
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Subordinated Indebtedness of the
Company) pursuant to Section 4.07(a)(3)(C), the Company shall make such offer
(the "OFFER") to purchase Securities on or before the 366th day after the
date of such Asset Disposition, and shall
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purchase Securities tendered pursuant to an Offer at a purchase price of 100%
of their principal amount (or, in the event such other Senior Subordinated
Indebtedness of the Company was issued with significant original issue
discount, 100% of the accreted value thereof) without premium, plus accrued
but unpaid interest (or, in respect of such other Senior Subordinated
Indebtedness of the Company, such lesser price, if any, as may be provided
for by the terms of such Senior Subordinated Indebtedness of the Company) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in this Section 4.07. If the aggregate purchase
price of Securities and other Senior Subordinated Indebtedness tendered
exceeds the Net Available Cash allotted to their purchase, the Company shall
select the Securities and other Senior Subordinated Indebtedness of the
Company to be purchased on a PRO RATA basis but in round denominations, which
in the case of the Securities shall be denominations of $1,000 principal
amount or multiples thereof. The Company shall not be required to make an
Offer if the Net Available Cash available therefor is less than $10.0 million
(which lesser amount shall be carried forward for purposes of determining
whether such an offer is required with respect to the Net Available Cash from
any subsequent Asset Disposition). Upon completion of any application of Net
Available Cash in accordance with the foregoing provisions of clauses (a)(3)
and (a)(4) of this Section 4.07, the amount of Net Available Cash shall be
reset at zero.
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver
to the Trustee and send, by first-class mail to each Holder, a written
notice stating that the Holder may elect to have the Holder's
Securities purchased by the Company either in whole or in part (subject
to prorating as described in Section 4.07(b) in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at
the applicable purchase price. The notice shall specify a purchase date
not less than 30 days nor more than 60 days after the date of such
notice (the "PURCHASE DATE") and shall contain such information
concerning the business of the Company which the Company in good faith
believes will enable such Holders to make an informed decision.
(2) No later than one Business Day prior to the Purchase Date,
the Company shall irrevocably deposit with the Trustee or with a Paying
Agent (or, if the
61
Company is acting as its own Paying Agent, segregate and hold in
trust) in Temporary Cash Investments, maturing on the last day prior
to the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the amount of the
Offer (the "OFFER AMOUNT") to be held for payment in accordance with
the provisions of this Section. If the Offer includes other Senior
Subordinated Indebtedness, the deposit described in the preceding
sentence may be made with any other paying agent pursuant to
arrangements satisfactory to the Trustee. Upon the expiration of the
period for which the Offer remains open (the "OFFER PERIOD"), the
Company shall deliver to the Trustee for cancellation the Securities or
portions thereof which have been properly tendered to and are to be
accepted by the Company. The Trustee shall, on the Purchase Date, mail
or deliver payment (or cause the delivery of payment) to each tendering
Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Securities delivered by the Company to
the Trustee is less than the Offer Amount applicable to the Securities,
the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with
this Section 4.07.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly
completed, to the Company at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company
receives not later than one Business Day prior to the Purchase Date, a
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing
his election to have such Security purchased. Holders whose Securities
are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities
surrendered.
(d) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of
Securities pursuant to this Section 4.07. To the extent that the provisions
of any securities laws or regulations conflict with provisions
62
of this Section 4.07, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section by virtue of its compliance with such securities laws or
regulations.
SECTION 4.08. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Company and Parent shall not, and shall not permit
any Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with, or for the
benefit of, any Affiliate of Parent (an "AFFILIATE TRANSACTION") unless:
(1) the terms of the Affiliate Transaction are no less
favorable to the Company, Parent or such Restricted Subsidiary than
those that could reasonably be expected to be obtained at the time of
the Affiliate Transaction in arm's-length dealings with a Person who is
not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess
of $5.0 million, the terms of the Affiliate Transaction are set forth
in writing and a majority of the non-employee directors of Parent
disinterested with respect to such Affiliate Transaction shall have
determined in good faith that the criteria set forth in clause (1) are
satisfied and shall have approved the relevant Affiliate Transaction as
evidenced by a resolution of the Board of Directors; and
(3) if such Affiliate Transaction involves an amount in excess
of $10.0 million, the Board of Directors shall also have received a
written opinion from an Independent Qualified Party to the effect that
such Affiliate Transaction is fair, from a financial standpoint, to
Parent or is not less favorable to Parent than could reasonably be
expected to be obtained at the time in an arm's-length transaction with
a Person who was not an Affiliate.
(b) The provisions of Section 4.08(a) shall not prohibit:
(1) any Restricted Payment permitted to be made pursuant to
Section 4.04;
63
(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans
approved by the Board of Directors or senior management of Parent;
(3) loans or advances to employees in the ordinary course of
business of Parent and its Restricted Subsidiaries, but in any event
not to exceed $5.0 million in the aggregate outstanding at any one
time;
(4) the payment of customary directors' fees, indemnification
and similar arrangements and payments thereunder, as well as agreements
requiring or permitting such payments or indemnification, by Parent or
any of its Restricted Subsidiaries;
(5) any transaction between or among Parent, a Restricted
Subsidiary or any other Person that would constitute an Affiliate
Transaction solely because Parent or a Restricted Subsidiary owns an
equity interest in or otherwise controls such Person;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of Parent or any contribution to the capital of
Parent or any Restricted Subsidiary; and
(7) any agreement as in effect as of the Issue Date that is
disclosed in the Offering Circular or any amendment of any such
agreement (so long as any such amendment is not more disadvantageous to
the Holders than the original agreement as in effect on the Issue Date)
or any transaction contemplated thereby.
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SECTION 4.09. LIMITATION ON OWNERSHIP OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company and Parent shall not, and shall not
permit any Restricted Subsidiary to, (1) permit any Restricted Subsidiary of
Parent to issue any Capital Stock (including pursuant to any merger,
consolidation, recapitalization or similar transaction) other than to Parent
or a Wholly Owned Subsidiary or (2) permit any Person other than Parent or a
Wholly Owned Subsidiary to own any Capital Stock of a Restricted Subsidiary,
except in each case for (A) directors' qualifying shares and (B) Common Stock
issued to or owned by Strategic Investors.
SECTION 4.10. DISTRIBUTIONS BY QUALIFIED RESTRICTED
SUBSIDIARIES. Except to the extent restricted pursuant to any Permitted
Payment Restriction, the Company and Parent shall, and shall cause each
Restricted Subsidiary to, cause each Qualified Restricted Subsidiary to
declare and pay regular monthly, quarterly or semi-annual dividends or
distributions to the holders of its Capital Stock in an amount equal to
substantially all of the available cash flow of such Restricted Subsidiary
for such period as determined in good faith by the board of directors, board
of governors or such other individuals performing similar functions, subject
to such ordinary and customary reserves and other amounts as, in the good
faith judgment of such individuals, may be necessary so that the business of
such Restricted Subsidiary may be properly and advantageously conducted at
all times.
SECTION 4.11. INTERCOMPANY ADVANCES. The Company and
Parent shall, and shall cause each Restricted Subsidiary to, evidence all
transfers made by the Company, Parent or any Restricted Subsidiary of Parent
to Parent or any Wholly Owned Subsidiary of Parent of the direct or indirect
proceeds of the issuance and sale of the Securities by executing and
delivering an intercompany promissory note. Each such intercompany promissory
note will be payable upon or before each payment of principal of the
Securities (whether upon Stated Maturity, optional redemption, required
purchase, declaration of acceleration or otherwise) and will bear interest at
the same or greater rate, payable on the same or earlier dates, as the
Securities.
SECTION 4.12. GUARANTORS. Parent shall, and Parent and the
Company shall cause all present and future Subsidiaries of Parent (other than
the Company) that fall within one or more of the categories set forth below
to, Guarantee, jointly and severally, payment of the Securities
65
and all other amounts due under this Indenture by executing and delivering to
the Trustee a Supplemental Guaranty Agreement:
(a) any Domestic Wholly Owned Subsidiary of Parent;
(b) any Subsidiary of Parent that Guarantees any Indebtedness
of the Company or any Domestic Guarantor (other than the Securities
and the Guaranties);
(c) any Subsidiary of Parent, the assets of which are subject
to a Lien securing any Indebtedness of the Company or any Domestic
Guarantor (other than the Securities and the Guaranties); and
(d) any Subsidiary of Parent, more than 65% of the Voting
Stock of which has been pledged, directly or indirectly, individually
or in the aggregate, by Parent and its Subsidiaries, to secure
Indebtedness of the Company or any Domestic Guarantor (other than the
Securities and the Guaranties).
The Guaranty by a Guarantor will be released under certain
circumstances as described in Section 11.06.
SECTION 4.13. SEC REPORTS. Whether or not the Company is
subject to Section 13(a) or 15(d) of the Exchange Act, or any successor
provision thereto, the Company shall file with the SEC the annual reports,
quarterly reports and other documents which the Company would have been
required to file with the SEC pursuant to such Section 13(a) or 15(d) or any
successor provision thereto if the Company were subject thereto, such
documents to be filed with the SEC on or prior to the respective dates (the
"REQUIRED FILING DATES") by which the Company would have been required to
file them; PROVIDED, HOWEVER, if the Company is not subject to Section 13(a)
or 15(d) of the Exchange Act, the Company shall not be required to file such
reports and documents with the SEC under Section 13(a) or 15(d) of the
Exchange Act (or any successor provisions thereto) so long as (i) Parent
files the reports and documents with the SEC under Section 13(a) or 15(d) of
the Exchange Act that it is required to file and (ii) the Company and Parent
are in compliance with the requirements set forth in Rule 3-10 of Regulation
S-X under the Exchange Act.
The Company shall also (whether or not it is required to
file reports with the SEC), within 30 days of
66
each Required Filing Date, (i) transmit by mail to all Securityholders, as
their names and addresses appear in the applicable security register, without
cost to such Holders, and (ii) file with the Trustee, copies of the annual
reports, quarterly reports and other documents (without exhibits) which the
Company has filed or would have filed, or which Parent has filed, with the
SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, any successor
provisions thereto or this Section. The Company shall not be required to file
any report with the SEC if the SEC does not permit such filing. In addition,
the Company shall furnish to the Trustee, to the Securityholders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act and the exhibits omitted from the information furnished
pursuant to the preceding sentence, for so long as the Securities are not
freely transferable under the Securities Act. The Company also shall comply
with the other provisions of TIA Section 314(a).
SECTION 4.14. COMPLIANCE CERTIFICATE. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of
the Company an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default and whether or not the signers
know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the
Company is taking or proposes to take with respect thereto. The Company also
shall comply with TIA Section 314(a)(4).
SECTION 4.15. MAINTENANCE OF OFFICE OR AGENCY. The Company
shall maintain in the Borough of Manhattan, the City of
New York, an office
or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Securities may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such surrenders,
notices and demands may be made or served at an office of the Trustee in the
Borough of Manhattan, the City of
New York.
67
The Company may also from time to time designate one or more other
offices or agencies where Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of
New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the office of the Trustee at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as one such office or agency of
the Company in accordance with Section 2.03 hereof.
SECTION 4.16. TAXES. The Company and Parent shall pay, and
shall cause each of their Subsidiaries to pay, prior to delinquency, all
material taxes, assessments, and governmental levies except such as are
contested in good faith and by appropriate proceedings or where the failure
to effect such payment is not adverse in any material respect to the Holders.
SECTION 4.17. LIMITATION ON STATUS AS INVESTMENT COMPANY.
Neither Parent, the Company nor any of their Subsidiaries shall take any
action or suffer to exist any condition that would require any of them to
register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or to otherwise become subject
to regulation as an investment company.
SECTION 4.18. PAYMENTS FOR CONSENT. Neither Parent, the
Company nor any of their Affiliates shall, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Securities for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Securities unless such consideration is offered to be paid
or agreed to be paid to all Holders that so consent, waive or agree to amend
within any time period set forth in the solicitation documents relating to
such consent, waiver or agreement.
SECTION 4.19. CORPORATE EXISTENCE. Subject to Article 5
hereof, each of Parent and the Company shall do or cause to be done all
things necessary to preserve and
68
keep in full force and effect its corporate existence, and the corporate,
partnership or other existence of each Subsidiary, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of each Subsidiary and the rights (charter and statutory), licenses and
franchises of Parent, the Company and their Subsidiaries; PROVIDED, HOWEVER,
that Parent and the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any
of their Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Parent and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders.
SECTION 4.20. FURTHER INSTRUMENTS AND ACTS. Upon request
of the Trustee, the Company will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry
out more effectively the purpose of this Indenture.
ARTICLE 5
MERGER
SECTION 5.01. MERGER AND CONSOLIDATION.
(a) The Company shall not consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, directly or indirectly, all or substantially all of the assets
of the Company and its Restricted Subsidiaries, taken as a whole, to, any
Person, unless:
(1) the resulting, surviving or transferee Person (the
"SUCCESSOR COMPANY") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture;
(2) immediately after giving PRO FORMA effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Subsidiary of the Successor Company as
a result of
69
such transaction as having been Incurred by such Successor Company or
such Subsidiary at the time of such transaction), no Default shall
have occurred and be continuing;
(3) immediately after giving PRO FORMA effect to such
transaction, the Successor Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 4.03(a)(1);
(4) (other than Guarantors that were Guarantors prior to such
transaction and continue to be Guarantors after such transaction, and
upon consummation of such transaction, the Company is the Successor
Company), each Person that is required pursuant to the terms of this
Indenture to be a Guarantor shall have become a Guarantor pursuant to a
Supplemental Guaranty Agreement or shall have confirmed its Guaranty
pursuant to a supplemental indenture in form reasonably satisfactory to
the Trustee; and
(5) the Company and each appropriate Guarantor shall have
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture (if any) comply with
this Indenture;
PROVIDED, HOWEVER, that clause (3) will not be applicable to (A) Parent or a
Restricted Subsidiary consolidating with, merging into, conveying,
transferring or leasing all or part of its assets to the Company or (B) the
Company merging with an Affiliate of the Company solely for the purpose and
with the sole effect of reincorporating the Company in another jurisdiction
within the United States of America.
The Successor Company (if not the Company) shall be the
successor to the Company and shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, and
the predecessor Company, except in the case of a lease, shall be released
from the obligation to pay the principal of and interest on the Securities.
(b) Parent shall not, and the Company and Parent shall not
permit any Guarantor to, consolidate with or merge with or into, or convey,
transfer or lease, in one
70
transaction or a series of transactions, all or substantially all of its
assets to any Person unless:
(1) (other than in the case of a Guarantor (other than Parent)
that has been disposed of in its entirety to another Person (other than
to Parent or a Subsidiary of Parent), whether through a merger,
consolidation or sale of Capital Stock or assets, if in connection
therewith the Company provides an Officers' Certificate to the Trustee
to the effect that the Company will comply with, and does comply with,
its obligations under Section 4.07 in respect of such disposition), the
resulting, surviving or transferee Person (if not the Company or a
Person that was a Guarantor immediately prior to such transaction)
shall expressly assume, by a Supplemental Guaranty Agreement, all the
obligations of such Guarantor under its Guaranty;
(2) immediately after giving effect to such transaction or
transactions on a PRO FORMA basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person
as a result of such transaction as having been issued by such Person at
the time of such transaction), no Default shall have occurred and be
continuing; and
(3) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such
Supplemental Guaranty Agreement, if any, complies with this Indenture.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. Each of the following is
an "EVENT OF DEFAULT":
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for 30 days;
(2) the Company (i) defaults in the payment of the principal
of any Security when the same becomes due and payable at its Stated
Maturity, upon optional
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redemption, upon declaration of acceleration or otherwise, whether or
not such payment shall be prohibited by Article 10 or (ii) fails to
purchase Securities when required pursuant to this Indenture or the
Securities, whether or not such redemption or purchase shall be
prohibited by Article 10;
(3) the Company or any Guarantor fails to comply with
Section 5.01;
(4) the Company or any Guarantor fails to comply with any of
its agreements in the Securities or this Indenture (other than those
referred to in clauses (1), (2) and (3) above) and such failure
continues for 30 days after the notice specified below;
(5) Indebtedness of the Company, any Guarantor or any
Significant Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because
of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $10.0 million (or its foreign currency equivalent
at the time);
(6) the Company, any Guarantor or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of
its creditors;
or takes any comparable action relating to insolvency;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, any Guarantor
or any Significant Subsidiary in an involuntary case;
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(B) appoints a Custodian of the Company, any
Guarantor or any Significant Subsidiary or for any
substantial part of its property; or
(C) orders the winding up or liquidation of the
Company, any Guarantor or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(8) any judgment or decree for the payment of money in excess
of $10.0 million (or its foreign currency equivalent at the time) above
the coverage under applicable insurance policies as to which the
relevant insurer has not disclaimed coverage is entered against the
Company, any Guarantor or any Significant Subsidiary, remains
outstanding for a period of 60 consecutive days following such judgment
and is not discharged, waived or stayed; or
(9) a Guaranty ceases to be in full force and effect (other
than in accordance with the terms of such Guaranty) or any Guarantor
denies or disaffirms its obligations under its Guaranty.
The foregoing will constitute Events of Default whatever
the reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "BANKRUPTCY LAW" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
CODE, or any similar Federal or state law for the relief of debtors. The term
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) of this Section 6.01 is not an
Event of Default until the Trustee or the holders of at least 25% in
principal amount of the outstanding Securities notify the Company of the
default and the Company does not cure such default within the time specified
after receipt of such notice. Such notice must specify the default, demand
that it be remedied and state that such notice is a "Notice of Default."
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The Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any Default or Event of Default, the status of such Default or
Event of Default and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other
than an Event of Default specified in Section 6.01(6) or (7) with respect to
the Company or any Guarantor) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities may
declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that it is a "notice
of acceleration." Upon such a declaration, such principal and interest shall
be due and payable immediately. In the event of a declaration of acceleration
of the Securities because an Event of Default described in clause (5) of
Section 6.01 has occurred and is continuing, the declaration of acceleration
of the Securities shall be automatically annulled if (A) the nonpayment or
default triggering such Event of Default pursuant to clause (5) of Section
6.01 shall be remedied or cured by Parent or a Restricted Subsidiary or
waived by the holders of the relevant Indebtedness within 20 days after the
declaration of acceleration with respect thereto, (B) the annulment of the
acceleration of the Securities would not conflict with any judgment or decree
of a court of competent jurisdiction and (C) all existing Events of Default,
except nonpayment of principal, premium or interest on the Securities that
became due solely because of the acceleration of the Securities, have been
cured or waived. If an Event of Default specified in Section 6.01(6) or (7)
with respect to the Company or any Guarantor occurs and is continuing, the
principal of and interest on all the Securities shall IPSO FACTO become and
be immediately due and payable without any declaration or other act on the
part of the Trustee or any Securityholders. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due
solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of
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Default occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal of or interest on the Securities
or to enforce the performance of any provision of the Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security, (ii) a Default arising
from the failure to redeem or purchase any Security when required pursuant to
this Indenture or (iii) a Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent
right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a
majority in principal amount of the outstanding Securities may direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders or
would involve the Trustee in personal liability; PROVIDED, HOWEVER, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking
such action.
SECTION 6.06. LIMITATION ON SUITS. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no Securityholder may pursue any remedy with respect to this Indenture or the
Securities
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unless:
(1) such Holder has previously given the Trustee notice that
an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the
outstanding Securities have requested the Trustee to pursue
the remedy;
(3) such Holders have offered the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) Holders of a majority in principal amount of the
outstanding Securities have not given the Trustee a direction
inconsistent with such request within such 60-day period.
A Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference or priority
over another Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities held
by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any Guarantor for the whole amount then due and
owing (together with interest on any unpaid interest to the extent lawful)
and the amounts provided for in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless
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prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is
hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any
money or property pursuant to this Article 6, it shall pay out the money or
property in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company and,
if such money or property has been collected from a Guarantor, to
holders of Senior Indebtedness of such Guarantor, in each case to the
extent required by Articles 10 and 12;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the
Trustee a notice that states the record date, the payment date and amount to
be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable
77
costs, including reasonable attorneys' fees, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders
of more than 10% in principal amount of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The
Company and each Guarantor (to the extent it may lawfully do so) covenants
that it shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company and each
Guarantor (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct
of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming
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to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to Sections 7.01 and 7.02.
(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE.
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(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee
in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not
be responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
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SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and
is continuing and if it is known to the Trustee, the Trustee shall mail to
each Securityholder notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment of principal of or interest on any
Security (including payments pursuant to the mandatory redemption provisions
of such Security, if any), the Trustee may withhold the notice if and so long
as a committee of its Trust Officers determines that withholding the notice
is not opposed to the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly
as practicable after each May 15 beginning with the May 15 following the date
of this Indenture, and in any event prior to July 15 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of May 15
that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be mailed). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company
shall pay to the Trustee from time to time reasonable compensation for its
acceptance of this Indenture and its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
expense (including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder,
except as set forth in the last sentence of this paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder. The Company shall defend the claim
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and the Trustee may have separate counsel and the Company shall pay the fees
and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee
through the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities. Such lien shall survive
the discharge of this Indenture.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(6) or (7) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may
resign at any time by so notifying the Company. The Holders of a majority in
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and
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to the Company. Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. The successor Trustee
shall mail a notice of its succession to Securityholders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Trustee
shall have a combined capital and surplus (together with its holding company
and sister companies, if any) of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with TIA ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities
of the Company are outstanding if the requirements for such exclusion set
forth in TIA ss. 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES;
DEFEASANCE.
(a) When (1) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.07)
for cancellation or (2) all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof or will become due and payable
within one year and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), be satisfied and discharged and cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
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(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its and the Guarantors' obligations under the
Securities and this Indenture ("LEGAL DEFEASANCE OPTION") or (2) its and the
Guarantors' obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08,
4.09, 4.10, 4.11, 4.12 and 4.13 and the operation of Sections 6.01(5), 6.01(6),
6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(6) and (7), with
respect only to Significant Subsidiaries), the limitations contained in Sections
5.01(a)(3) and 5.01(a)(4), and all rights and obligations of all Persons under
or pursuant to Articles 10, 11 and 12 ("COVENANT DEFEASANCE OPTION"). The
Company may exercise its legal defeasance option not withstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in
the case of Sections 6.01(6) and (7), with respect only to Significant
Subsidiaries) or because of the failure of the Company to comply with Sections
5.01(a)(3) or 5.01(a)(4). If the Company exercises its legal defeasance option
or its covenant defeasance option, each Guarantor, if any, shall be released
from all its obligations with respect to its Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may
exercise its legal defeasance option or its covenant defeasance option only
if:
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(1) the Company irrevocably deposits in trust with
the Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Securities to maturity or redemption,
as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(6) or (7) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the
86
Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will
be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article 8. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of and interest on the
Securities. Money and securities so held in trust are not subject to Article
10.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The
Company shall pay and shall indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying
Agent is unable to apply any money or U.S. Government Obligations in
accordance with this Article 8 by
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reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture
and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; PROVIDED, HOWEVER, that, if the Company has
made any payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. Notwithstanding
Section 9.02, the Company, the Guarantors and the Trustee may amend this
Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for the assumption by a successor corporation
of the obligations of the Company or any Guarantor under this Indenture
pursuant to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities,
including any Guaranties, or to secure the Securities;
(5) to add to the covenants of the Company or any Guarantor
for the benefit of the Holders or to surrender any right or power
herein conferred upon the Company or any Guarantor;
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(6) to make any change that does not adversely affect the
rights of any Securityholder in any material respect;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to evidence the release of a Guarantor pursuant to and in
accordance with the terms of this Indenture.
However, no amendment under this Section may make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness of the Company or of a Guarantor then outstanding unless
such holder of such Senior Indebtedness (or its Representative) consents to such
change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company, the
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Holders of
at least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange
for the Securities). However, without the consent of each Securityholder
affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) reduce the amount payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
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(5) make any Security payable in money other than that stated
in the Security;
(6) impair the right of any Securityholder to receive payment
of principal of and interest on such Securityholder's Securities on or
after the due dates therefor or to institute suit for the enforcement
of any payment on or with respect to such Securityholder's Securities;
(7) make any change in Section 6.04 or 6.07 or the second
sentence of this Section;
(8) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders; or
(9) make any change in any Guaranty that would adversely
affect the Securityholders.
Notwithstanding the foregoing, the provision under this Indenture
relative to the Company's obligation to make a Change of Control Offer or an
Offer under Section 4.07 may be waived or modified with the written consent of
the Holders of a majority in principal amount of the Securities.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Senior Indebtedness of the Company or of a Guarantor then outstanding unless
such holder of such Senior Indebtedness (or its Representative) consents to such
change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every
amendment to this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS
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AND WAIVERS. A consent to an amendment or a waiver by a Holder of a Security
shall bind the Holder and every subsequent Holder of that Security or portion
of the Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent or waiver is not made on the
Security. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's Security or portion of the Security if
the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective,
it shall bind every Securityholder. An amendment or waiver becomes effective
upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If
an amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee
shall sign any amendment authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01)
shall be fully
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protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company
agrees, and each Securityholder by accepting a Security agrees, that the
Indebtedness evidenced by the Securities is subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment of all Senior Indebtedness of the Company and that the subordination
is for the benefit of and enforceable by the holders of such Senior
Indebtedness. The Securities shall in all respects rank PARI PASSU with all
other Senior Subordinated Indebtedness of the Company and only Indebtedness
of the Company which is Senior Indebtedness of the Company shall rank senior
to the Securities in accordance with the provisions set forth herein. All
provisions of this Article 10 shall be subject to Section 10.11.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon
any payment or distribution of the assets of the Company to creditors upon a
total or partial liquidation or a total or partial dissolution of the Company
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash of such Senior Indebtedness
before Securityholders shall be entitled to receive any payment of
principal of or interest on the Securities (except that Securityholders
may receive and retain Permitted Junior Securities and payments from
the trust described in Article 8); and
(2) until such Senior Indebtedness is paid in full in cash,
any payment or distribution to which Securityholders would be entitled
but for this Article 10 shall be made to holders of such Senior
Indebtedness as their interests may appear (except that Securityholders
may receive and retain Permitted Junior Securities and payments from
the trust described in Article 8).
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SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OF THE
COMPANY. The Company shall not pay the principal of, premium, if any, or
interest on the Securities (except in Permitted Junior Securities or from the
trust described in Article 8) or make any deposit pursuant to Section 8.01
and may not purchase, redeem or otherwise retire any Securities (except in
Permitted Junior Securities or from the trust described in Article 8)
(collectively, "PAY THE SECURITIES") if either of the following (a "PAYMENT
DEFAULT") occurs: (1) any Designated Senior Indebtedness of the Company is
not paid in full in cash when due, or (2) any other default on Designated
Senior Indebtedness of the Company occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms; unless, in
either case, the Payment Default has been cured or waived and any such
acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash; PROVIDED, HOWEVER, that the Company shall be
entitled to pay the Securities without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representatives of all Designated Senior Indebtedness with respect to which
the Payment Default has occurred and is continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of the Company
pursuant to which the maturity thereof may be accelerated without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company shall not pay the
Securities for a period (a "PAYMENT BLOCKAGE PERIOD") commencing upon the
receipt by the Trustee of (with a copy to the Company) a written notice (a
"BLOCKAGE NOTICE") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period
and ending 179 days thereafter. The Payment Blockage Period shall end earlier if
such Payment Blockage Period is terminated: (1) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (2)
because the default giving rise to such Blockage Notice is cured, waived or
otherwise no longer continuing, or (3) because such Designated Senior
Indebtedness has been discharged or repaid in full in cash.
Notwithstanding the provisions described in the above
paragraph (but subject to the provisions contained in the first sentence of this
Section), unless the holders of such Designated Senior Indebtedness or the
Representative
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of such Designated Senior Indebtedness shall have accelerated the maturity of
such Designated Senior Indebtedness, the Company shall be entitled to resume
payments on the Securities after termination of such Payment Blockage Period.
The Securities shall not be subject to more than one Payment Blockage Period
in any consecutive 360-day period, irrespective of the number of defaults
with respect to Designated Senior Indebtedness of the Company during such
period; PROVIDED, HOWEVER, that if any Blockage Notice within such 360-day
period is delivered to the Trustee by or on behalf of any holders of
Designated Senior Indebtedness of the Company (other than the Bank
Indebtedness), the Representative of the Bank Indebtedness shall be entitled
to give another Blockage Notice within such period; PROVIDED FURTHER,
HOWEVER, that in no event shall the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the
aggregate during any 360-consecutive-day period, and there must be 181 days
during any consecutive 360-day period during which no Payment Blockage Period
is in effect.
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of Designated Senior
Indebtedness of the Company (or their Representatives) of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to Securityholders that because of this Article 10
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness of the
Company and pay it over to them as their interests may appear.
SECTION 10.06. SUBROGATION. After all Senior Indebtedness
of the Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness.
A distribution made under this Article 10 to holders of such Senior
Indebtedness which otherwise would have been made to Securityholders is not,
as between the Company and Securityholders, a payment by the Company on such
Senior Indebtedness.
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SECTION 10.07. RELATIVE RIGHTS. This Article 10 defines
the relative rights of Securityholders and holders of Senior Indebtedness of
the Company. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default, subject to the rights of holders
of Senior Indebtedness of the Company to receive distributions
otherwise payable to Securityholders.
SECTION 10.08. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 10.03, the Trustee or Paying Agent shall continue to
make payments on the Securities and shall not be charged with knowledge of
the existence of facts that under this Article 10 would prohibit the making
of any such payments unless, not less than two Business Days prior to the
date of such payment, a Trust Officer of the Trustee receives notice
satisfactory to it that such payments are prohibited by this Article 10. The
Company, the Registrar or co-registrar, the Paying Agent, a Representative or
a holder of Senior Indebtedness of the Company shall be entitled to give the
notice; PROVIDED, HOWEVER, that, if an issue of Senior Indebtedness of the
Company has a Representative, only the Representative shall be entitled to
give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of the Company with the same rights it
would have if it were not the Trustee. The Registrar and co-registrar and the
Paying Agent shall be entitled to do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article 10 with respect to
any Senior Indebtedness of the Company which may at any time be held by it, to
the same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07.
SECTION 10.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever any Person is to make a distribution or give a notice to holders of
Senior
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Indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 10.10. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT
OR LIMIT RIGHT TO ACCELERATE. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be
construed as preventing the occurrence of a Default. Nothing in this Article
10 shall have any effect on the right of the Securityholders or the Trustee
to accelerate the maturity of the Securities.
SECTION 10.11. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of U.S. Government Obligations held in trust under
Article 8 by the Trustee for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness of the Company or subject to the restrictions set forth in this
Article 10, and none of the Securityholders shall be obligated to pay over
any such amount to the Company or any holder of Senior Indebtedness of the
Company or any other creditor of the Company.
SECTION 10.12. TRUSTEE ENTITLED TO RELY. Upon any payment
or distribution pursuant to this Article 10, the Trustee and the
Securityholders shall be entitled to rely (1) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature
referred to in Section 10.02 are pending, (2) upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Securityholders or (3) upon the
Representatives of Senior Indebtedness of the Company for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 10. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or
distribution pursuant to this Article 10, the Trustee shall be entitled to
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other
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facts pertinent to the rights of such Person under this Article 10, and, if
such evidence is not furnished, the Trustee shall be entitled to defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 10.
SECTION 10.13. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and
the holders of Senior Indebtedness of the Company as provided in this Article
10 and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF THE COMPANY. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and shall
not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Indebtedness of the Company shall be
entitled by virtue of this Article 10 or otherwise.
SECTION 10.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS
OF THE COMPANY ON SUBORDINATION PROVISIONS. Each Securityholder by accepting
a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness of the Company, whether such Senior
Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
ARTICLE 11
GUARANTIES
SECTION 11.01. GUARANTIES. Each Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its
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successors and assigns (a) the full and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company
under this Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "OBLIGATIONS"). Each Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from such Guarantor and that such Guarantor
will remain bound under this Article 11 notwithstanding any extension or
renewal of any Obligation.
Each Guarantor waives presentation to, demand of, payment from
and protest to the Company of any of the Obligations and also waives notice of
acceleration, notice of intent to accelerate and notice of protest for
nonpayment. Subject to Section 6.01, each Guarantor waives notice of any default
under the Securities or the Obligations. The obligations of each Guarantor
hereunder shall not be affected by: (a) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any other
agreement or otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Obligations; or (f) except as set forth in
Section 11.06, any change in the ownership of such Guarantor.
Each Guarantor further agrees that its Guaranty herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
Each Guaranty is, to the extent and in the manner set forth in
Article 12, subordinated and subject in right of payment to the prior payment in
full of the principal of and premium, if any, and interest on all Senior
Indebtedness of the Guarantor giving such Guaranty and each Guaranty is made
subject to such provisions of this
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Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and
11.06, the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities or
any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
Each Guarantor further agrees that its Guaranty herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Obligation when and as the same shall become due, whether
at maturity, by acceleration, by redemption or otherwise, or to perform or
comply with any other Obligation, each Guarantor hereby promises to and shall,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders or the Trustee an amount equal to the sum of (1)
the unpaid amount of such Obligations, (2) accrued and unpaid interest on such
Obligations (but only to the extent not prohibited by law) and (3) all other
monetary Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be
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entitled to any right of subrogation in respect of any Obligations guaranteed
hereby until payment in full of all Obligations and all obligations to which
the Obligations are subordinated as provided in Article 12. Each Guarantor
further agrees that, as between it, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of such
Guarantor's Guaranty herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6, such Obligations (whether or not
due and payable) shall forthwith become due and payable by such Guarantor for
the purposes of this Section.
Each Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 11.02. LIMITATION ON LIABILITY. Any term or
provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Obligations guaranteed hereunder by any Guarantor
shall not exceed the maximum amount that can be hereby guaranteed without
rendering this Indenture, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 11.03. SUCCESSORS AND ASSIGNS. This Article 11
shall be binding upon each Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party in
this Indenture and in the Securities shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
SECTION 11.04. NO WAIVER. Neither a failure nor a delay on
the part of either the Trustee or the Holders in exercising any right, power
or privilege under this Article 11 shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits
of the Trustee and the Holders herein
100
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 11 at law, in
equity, by statute or otherwise.
SECTION 11.05. MODIFICATION. No modification, amendment or
waiver of any provision of this Article 11, nor the consent to any departure
by any Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Guarantor in any case shall
entitle such Guarantor to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 11.06. RELEASE OF GUARANTOR. The Guaranty of a
Guarantor (other than Parent) will be released:
(1) upon the sale or other disposition (including by way of
consolidation or merger) of that Guarantor, other than to Parent or a
Restricted Subsidiary of Parent and as permitted by this Indenture;
(2) upon the sale or other disposition of all or substantially
all the assets of that Guarantor, other than to Parent or a Restricted
Subsidiary of Parent and as permitted by this Indenture;
(3) if the Company designates that Guarantor as an
Unrestricted Subsidiary in accordance with the applicable provisions
of this Indenture;
(4) if that Guarantor ceases to be a Wholly Owned
Subsidiary and is not required to Guarantee the Securities pursuant to
Section 4.12; and
(5) in the case of a Foreign Guarantor, if that Foreign
Guarantor is not required to Guarantee the Securities pursuant to
Section 4.12.
ARTICLE 12
SUBORDINATION OF GUARANTIES
SECTION 12.01. AGREEMENT TO SUBORDINATE. Each Guarantor
agrees, and each Securityholder by accepting a Security agrees, that the
Indebtedness evidenced by such
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Guarantor's Guaranty is subordinated in right of payment, to the extent and
in the manner provided in this Article 12, to the prior payment of all Senior
Indebtedness of such Guarantor and that the subordination is for the benefit
of and enforceable by the holders of such Senior Indebtedness. The
Obligations of a Guarantor shall in all respects rank PARI PASSU with all
other Senior Subordinated Indebtedness of such Guarantor and only Senior
Indebtedness of such Guarantor (including such Guarantor's Guaranty of Senior
Indebtedness of the Company) shall rank senior to the Obligations of such
Guarantor in accordance with the provisions set forth herein. All provisions
of this Article 12 shall be subject to Section 12.11.
SECTION 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon
any payment or distribution of the assets of any Guarantor to creditors upon
a total or partial liquidation or a total or partial dissolution of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Guarantor or its property:
(1) holders of Senior Indebtedness of such Guarantor shall be
entitled to receive payment in full in cash of such Senior Indebtedness
before Securityholders shall be entitled to receive any payment
pursuant to the Guaranty of such Guarantor (except that Securityholders
may receive and retain Permitted Junior Securities and payments from
the trust described in Article 8); and
(2) until the Senior Indebtedness of any Guarantor is paid in
full in cash, any payment or distribution to which Securityholders
would be entitled but for this Article 12 shall be made to holders of
such Senior Indebtedness as their interests may appear (except that
Securityholders may receive and retain Permitted Junior Securities and
payments from the trust described in Article 8).
SECTION 12.03. DEFAULT ON SENIOR INDEBTEDNESS OF
GUARANTOR. No Guarantor shall make any payment of principal, premium, if any,
or interest pursuant to its Guaranty (except in Permitted Junior Securities
or from the trust described in Article 8) or purchase, redeem or otherwise
retire or defease any Securities or other Obligations (except in Permitted
Junior Securities or from the trust described in Article 8) (collectively,
"PAY ITS GUARANTY") if either of the following (a "PAYMENT DEFAULT") occurs:
(1) a default in the payment of any principal of, premium, if any, or
interest on Designated Senior Indebtedness of such Guarantor occurs; or (2)
any other
102
default on Designated Senior Indebtedness of such Guarantor occurs and the
maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms; unless, in either case, the Payment Default has been cured or
waived and any such acceleration has been rescinded or such Designated Senior
Indebtedness has been paid in full in cash; PROVIDED, HOWEVER, that any
Guarantor shall be entitled to pay its Guaranty without regard to the
foregoing if such Guarantor and the Trustee receive written notice approving
such payment from the Representatives of all Designated Senior Indebtedness
with respect to which the Payment Default has occurred and is continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of such Guarantor
pursuant to which the maturity thereof may be accelerated without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, such Guarantor shall not pay its
Guaranty for a period (a "PAYMENT BLOCKAGE PERIOD") commencing upon the receipt
by the Trustee of (with a copy to such Guarantor) written notice (a "BLOCKAGE
NOTICE") of such default from the Representative of such Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period and
ending 179 days thereafter. The Payment Blockage Period shall end earlier if
such Payment Blockage Period is terminated: (1) by written notice to the Trustee
and such Guarantor from the Person or Persons who gave such Blockage Notice, (2)
because the default giving rise to such Blockage Notice is cured, waived or
otherwise no longer continuing, or (3) because such Designated Senior
Indebtedness has been discharged or repaid in full in cash.
Notwithstanding the provisions described in the above
paragraph (but subject to the provisions contained in the first sentence of this
Section), unless the holders of such Designated Senior Indebtedness giving such
Payment Notice or the Representative of such Designated Senior Indebtedness
shall have accelerated the maturity of such Designated Senior Indebtedness, any
Guarantor shall be entitled to resume payments pursuant to its Guaranty after
termination of such Payment Blockage Period. No Guarantor shall be subject to
more than one Blockage Period in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness of such
Guarantor during such period; PROVIDED, HOWEVER, that if any Blockage Notice
within such 360-day period is delivered to the Trustee by or on behalf of any
holders of Designated Senior Indebtedness of such Guarantor (other than the Bank
Indebtedness), the Representative of the Bank Indebtedness shall be entitled to
103
give another Blockage Notice within such period; PROVIDED FURTHER, HOWEVER,
that in no event shall the total number of days during which any Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any 360-consecutive-day period, and there must be 181 days during any
consecutive 360-day period during which no Payment Blockage Period is in
effect.
SECTION 12.04. DEMAND FOR PAYMENT. If a demand for payment
is made on a Guarantor pursuant to Article 11, the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness of such Guarantor
(or their Representatives) of such demand.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to Securityholders that because of this Article 12
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness of the
applicable Guarantor and pay it over to them or their Representatives as
their interests may appear.
SECTION 12.06. SUBROGATION. After all Senior Indebtedness
of a Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness of
such Guarantor. A distribution made under this Article 12 to holders of such
Senior Indebtedness which otherwise would have been made to Securityholders
is not, as between the relevant Guarantor and Securityholders, a payment by
such Guarantor on such Senior Indebtedness.
SECTION 12.07. RELATIVE RIGHTS. This Article 12 defines
the relative rights of Securityholders and holders of Senior Indebtedness of
a Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Securityholders, the
obligation of such Guarantor, which is absolute and unconditional, to
pay its Guaranty to the extent set forth in Article 12; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a default by such Guarantor under its
Guaranty, subject to the rights of holders of Senior Indebtedness of
such Guarantor to receive distributions otherwise payable to
Securityholders.
104
SECTION 12.08. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 12.03, the Trustee or Paying Agent shall continue to
make payments on any Guaranty and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives written notice satisfactory to it that
such payments are prohibited by this Article 12. The Company, the relevant
Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative
or a holder of Senior Indebtedness of such Guarantor shall be entitled to
give the notice; PROVIDED, HOWEVER, that, if an issue of Senior Indebtedness
of any Guarantor has a Representative, only the Representative shall be
entitled to give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of any Guarantor with the same rights it
would have if it were not the Trustee. The Registrar and co-registrar and the
Paying Agent shall be entitled to do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article 12 with respect to
any Senior Indebtedness of any Guarantor which may at any time be held by it, to
the same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 12 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07.
SECTION 12.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever any Person is to make a distribution or give a notice to holders of
Senior Indebtedness of any Guarantor, such Person shall be entitled to make
such distribution or give such notice to their Representative (if any).
SECTION 12.10. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT
OR LIMIT RIGHT TO DEMAND PAYMENT. The failure to make a payment pursuant to a
Guaranty by reason of any provision in this Article 12 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 12 shall
have any effect on the right of the Securityholders or the Trustee to make a
demand for payment on any Guarantor pursuant to its Guaranty.
SECTION 12.11. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of U.S. Government Obligations held in trust under
Article 8 by the Trustee
105
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness of any Guarantor
or subject to the restrictions set forth in this Article 12, and none of the
Securityholders shall be obligated to pay over any such amount to any
Guarantor or any holder of Senior Indebtedness of any Guarantor or any other
creditor of any Guarantor.
SECTION 12.12. TRUSTEE ENTITLED TO RELY. Upon any payment
or distribution pursuant to this Article 12, the Trustee and the
Securityholders shall be entitled to rely (1) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature
referred to in Section 12.02 are pending, (2) upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Securityholders or (3) upon the
Representatives for the holders of Senior Indebtedness of any Guarantor for
the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness of any Guarantor to participate in any
payment or distribution pursuant to this Article 12, the Trustee shall be
entitled to request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, and, if such evidence is not
furnished, the Trustee shall be entitled to defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and
the holders of Senior Indebtedness of the Guarantors as provided in this
Article 12 and appoints
106
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF GUARANTOR. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Guarantor and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
SECTION 12.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS
OF THE GUARANTORS ON SUBORDINATION PROVISIONS. Each Securityholder by
accepting a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness of the Guarantors, whether such Senior
Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS. If any
provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control.
SECTION 13.02. NOTICES. Any notice, request or
communication shall be in writing and delivered in person or mailed by
first-class mail addressed as follows:
if to the Company or any Guarantor:
United Surgical Partners Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
107
if to the Trustee:
U.S. Trust Company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
The Company, any Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER
HOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, any Guarantor, the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
108
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION. Each certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. WHEN SECURITIES DISREGARDED. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which a Trust Officer of the
Trustee knows are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting
of Securityholders. The Registrar and the Paying Agent may make reasonable
rules for their functions.
SECTION 13.08. LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a
Saturday, a Sunday or a day on which banking institutions are not required to
be open in the State of
New York or the State of Texas. If a payment date is
a Legal Holiday, payment shall be made on the next succeeding day
109
that is not a Legal Holiday, and no interest shall accrue for the intervening
period. If a regular record date is a Legal Holiday, the record date shall
not be affected.
SECTION 13.09. GOVERNING LAW. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws
of the State of
New York but without giving effect to applicable principles
of conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. No director,
officer, employee, incorporator or stockholder of the Company or any
Guarantor shall have any liability for any obligations of the Company or any
Guarantor under the Securities, any Guaranty or this Indenture or for any
claim based on, in respect of, or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 13.11. SUCCESSORS. All agreements of the Company
in this Indenture and the Securities shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. MULTIPLE ORIGINALS. The parties may sign
any number of copies of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. One signed
copy is enough to prove this Indenture.
SECTION 13.13. TABLE OF CONTENTS; HEADINGS. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any
of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
UNITED SURGICAL PARTNERS HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Secretary
-----------------------------------
UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
USP ▇▇▇▇▇▇▇▇, INC.
USP WEST COVINA, INC.
ORTHOLINK OF COLORADO, INC.
MEDCENTER MANAGEMENT SERVICES, INC.
MEDICAL DOCUMENTING SYSTEMS, INC.
ORTHO EXCEL, INC.
ORTHOLINK PHYSICIANS CORPORATION
USP DOMESTIC HOLDINGS, INC.
USP INTERNATIONAL HOLDINGS, INC.
USP LONG ISLAND, INC.
USP NORTH TEXAS, INC.
USP SARASOTA, INC.
USP WINTER PARK, INC.
GEORGIA MUSCULOSKELETAL NETWORK, INC.
ORTHOLINK/GEORGIA ASC, INC.
ORTHOLINK/NEW MEXICO ASC, INC.
USP NEW JERSEY, INC.
NEUROSURGICAL ASSOCIATES, INC.
SOUTHWEST SPINE CENTER, INC.
USP LAS CRUCES, INC.
USP NEVADA, INC.
DAY-OP MANAGEMENT COMPANY, INC.
USP MANHATTAN, INC.
USP TENNESSEE, INC.
HEALTH HORIZONS OF DECATUR, INC.
HEALTH HORIZONS OF KANSAS CITY, INC.
HEALTH HORIZONS OF MURFREESBORO, INC.
HEALTH HORIZONS OF NASHVILLE, INC.
ORTHOLINK ASC CORPORATION
ORTHOLINK OCCUPATIONAL MEDICINE SERVICES
CORPORATION
ORTHOLINK SECURITIES CORPORATION
ORTHOLINK/TN ASC, INC.
S-1
TENNESSEE MUSCULOSKELETAL NETWORK, INC.
TEXAS OUTPATIENT SURGICARE CENTER, INC.
USP PASADENA, INC.
USP SOUTH HOUSTON, INC.
USP FREDERICKSBURG, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President, Secretary and
Treasurer
-----------------------------------
DAY-OP SURGERY CONSULTING COMPANY, LLC
By: USP Long Island, Inc., its sole member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President, Secretary and
Treasurer
-----------------------------------
NYCAS ADMINISTRATIVE SERVICES, LLC
By: USP Manhattan, Inc., its sole member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President, Secretary and
Treasurer
-----------------------------------
USP NEVADA HOLDINGS, LLC
By: USP North Texas, Inc., its sole member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President, Secretary and
Treasurer
-----------------------------------
S-2
USP TEXAS, L.P.
By: USP North Texas, Inc., its general
partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President, Secretary and
Treasurer
-----------------------------------
U.S. TRUST COMPANY OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
-----------------------------------
S-3
USP COAST, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President and Secretary
-----------------------------------
USP WESTWOOD, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President and Secretary
-----------------------------------
S-4
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix A the following terms shall
have the meanings indicated below:
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulations S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"CLEARING AGENCY" means Clearstream Banking, societe anonyme,
or any successor securities clearing agency.
"DEFINITIVE SECURITY" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
restricted securities legend set forth in Section 2.3(e).
"DEPOSITORY" means The Depository Trust Company its nominees
and their respective successors.
"DISTRIBUTION COMPLIANCE PERIOD", with respect to any
Securities, means the period of 40 consecutive days beginning on and including
the later of (i) the day on which such Securities are first offered to Persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the Issue Date with respect to such
Securities.
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System or any successor securities clearing agency.
"EXCHANGE SECURITIES" means (1) the 10% Senior Subordinated
Notes Due 2011 issued pursuant to the Indenture in connection with a Registered
Exchange Offer
A-2
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"INITIAL PURCHASERS" means (1) with respect to the Initial
Securities issued on the Issue Date, Credit Suisse First Boston Corporation,
▇▇▇▇▇▇ Brothers, Inc. and ▇▇ ▇▇▇▇▇ Securities Corporation, and (2) with respect
to each issuance of Additional Securities, the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"INITIAL SECURITIES" means (1) $150,000,000 aggregate
principal amount of 10% Senior Subordinated Notes Due 2011 issued on the Issue
Date and (2) Additional Securities, if any, issued in a transaction exempt from
the registration requirements of the Securities Act.
"PRIVATE EXCHANGE" means the offer by the Company, pursuant to
a Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"PRIVATE EXCHANGE SECURITIES" means any 10% Senior
Subordinated Notes Due 2011 issued in connection with a Private Exchange.
"PURCHASE AGREEMENT" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated December 14,
2001, among the Company, the Guarantors and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities, the purchase agreement or
underwriting agreement among the Company and the Persons purchasing such
Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"REGISTERED EXCHANGE OFFER" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
A-3
"REGISTRATION RIGHTS AGREEMENT" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated December 19, 2001, among the Company, the Guarantors and the Initial
Purchasers, and (2) with respect to each issuance of Additional Securities
issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Company and
the Persons purchasing such Additional Securities under the related Purchase
Agreement.
"RULE 144A SECURITIES" means all Initial Securities offered
and sold to QIBs in reliance on Rule 144A.
"SECURITIES" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"SECURITIES ACT" means the Securities Act of 1933.
"SECURITIES CUSTODIAN" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.
"SHELF REGISTRATION STATEMENT" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"TRANSFER RESTRICTED SECURITIES" means Securities that bear or
are required to bear the legend set forth in Section 2.3(e)hereto.
1.2 OTHER DEFINITIONS
Defined in
Term Section:
---- -------
"Agent Members" 2.1(b)
"Global Securities" 2.1(a)
"Permanent Regulation S Global Security" 2.1(a)
"Regulation S" 2.1(a)
"Rule 144A" 2.1(a)
"Rule 144A Global Security" 2.1(a)
A-4
"Temporary Regulation S Global Security" 2.1(a)
2. THE SECURITIES.
2.1 FORM AND DATING.
(a) The Initial Securities will be offered and sold by the
Company, from time to time, pursuant to one or more Purchase Agreements. The
Initial Securities will be resold initially only to QIBs in reliance on Rule
144A under the Securities Act ("RULE 144A") and in reliance on Regulation S
under the Securities Act ("REGULATION S"). Initial Securities may thereafter be
transferred to, among others, QIBs and purchasers in reliance on Regulation S,
subject to the restrictions on transfer set forth herein. Initial Securities
initially resold pursuant to Rule 144A shall be issued initially in the form of
one or more permanent global Securities in definitive, fully registered form
(collectively, the "RULE 144A GLOBAL SECURITY") and Initial Securities initially
resold pursuant to Regulation S shall be issued initially in the form of one or
more temporary global securities in definitive, fully registered form
(collectively, the "TEMPORARY REGULATION S GLOBAL SECURITY"), in each case
without interest coupons and with the global securities legend and restricted
securities legend set forth in Exhibit 1 hereto, which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with the
Securities Custodian, and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the Trustee
as provided in this Indenture. Beneficial ownership interests in the Temporary
Regulation S Global Security will not be exchangeable for interests in the Rule
144A Global Security, a permanent global security (the "PERMANENT REGULATION S
GLOBAL SECURITY"), or any other Security without a legend containing
restrictions on transfer of such Security prior to the expiration of the
Distribution Compliance Period and then only upon certification in form
reasonably satisfactory to the Trustee that beneficial ownership interests in
such Temporary Regulation S Global Security are owned either by non-U.S. persons
or U.S. persons who purchased such interests in a transaction that did not
require registration under the Securities Act. The Rule 144A Global Security,
the Temporary Regulation S Global Security and the Permanent Regulation S Global
Security are collectively referred to herein as "GLOBAL SECURITIES." The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments
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made on the records of the Trustee and the Depository or its nominee as
hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat
the Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in this
Section 2.1, Section 2.3 or 2.4, owners of beneficial interests in Global
Securities shall not be entitled to receive physical delivery of Definitive
Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and
deliver: (1) on the Issue Date, an aggregate principal amount of $150,000,000
10% Senior Subordinated Notes Due 2011, (2) any Additional Securities for an
original issue in an aggregate principal amount specified in the written order
of the Company pursuant to Section 2.02 of the Indenture and (3) Exchange
Securities or Private Exchange Securities for issue only in a Registered
Exchange Offer or a Private Exchange, respectively, pursuant to a Registration
Rights Agreement,
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for a like principal amount of Initial Securities, in each case upon a
written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and, in
the case of any issuance of Additional Securities pursuant to Section 2.13 of
the Indenture, shall certify that such issuance is in compliance with Section
4.03 of the Indenture.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or exchanged
pursuant to an effective registration statement under the Securities
Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect;
A-7
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect;
or
(C) if such Definitive Securities are being
transferred (x) pursuant to an exemption from registration in
accordance with Rule 144A, Regulation S or Rule 144 under the
Securities Act; or (y) in reliance upon another exemption from
the requirements of the Securities Act: (i) a certification to
that effect (in the form set forth on the reverse of the
Security) and (ii) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in the legend
set forth in Section 2.3(e)(i).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is either (A) being transferred
to a QIB in accordance with Rule 144A or (B) is being transferred after
expiration of the Distribution Compliance Period by a Person who
initially purchased such Security in reliance on Regulation S to a
buyer who elects to hold its interest in such Security in the form of a
beneficial interest in the Permanent Regulation S Global Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Rule 144A Global Security (in the case of
a transfer pursuant to clause (b)(i)(A)) or Permanent Regulation S
Security (in the case of a transfer pursuant to clause (b)(i)(B)) to
reflect an increase in the aggregate principal amount of the Securities
represented by the Rule 144A Global Security or Permanent Regulation S
Global Security, as applicable, such instructions to contain
information
A-8
regarding the Depositary account to be credited with such increase;
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, equal to the
principal amount of the Definitive Security so canceled. If no Rule 144A Global
Securities or Permanent Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the form of an Officers' Certificate, a new Rule
144A Global Security or Permanent Regulation S Global Security, as applicable,
in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository,
in accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depository
therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with
the Depository's procedures containing information regarding the
participant account of the Depository to be credited with a beneficial
interest in the Global Security. The Registrar shall, in accordance
with such instructions instruct the Depositary to credit to the account
of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the
transfer the beneficial interest in the Global Security being
transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the
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date and an increase in the principal amount of the Global Security
to which such interest is being transferred in an amount equal to the
principal amount of the interest to be so transferred, and the
Registrar shall reflect on its books and records the date and a
corresponding decrease in the principal amount of the Global Security
from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this Appendix A, prior
to the consummation of a Registered Exchange Offer or the effectiveness
of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Securities intended to ensure that such transfers comply
with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) RESTRICTIONS ON TRANSFER OF TEMPORARY REGULATION S GLOBAL
SECURITIES. During the Distribution Compliance Period, beneficial ownership
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred through Euroclear or Clearstream in accordance with the
Applicable Procedures and only (i) to the Company, (ii) so long as such Security
is eligible for resale pursuant to Rule 144A, to a Person whom the selling
holder reasonably believes is a QIB that purchases for its own account or for
the account of a QIB to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, (iii) in an offshore transaction in
accordance with Regulation S, (iv) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if applicable) under the
Securities Act or (v) pursuant to an effective registration statement under
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the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.
(e) LEGEND.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
Each Definitive Security will also bear the following
additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH
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CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the transferor thereof certifies
in writing to the Registrar that such sale or transfer was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such
Initial Securities or Private Exchange Securities, as the case may be,
all requirements pertaining to legends on such Initial Security or such
Private Exchange Security will cease to apply, the requirements
requiring any such Initial Security or such Private Exchange Security
issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an
Initial Security or Private Exchange Security in global form, in each
case without restrictive transfer legends, will be available to the
transferee of the Holder of such Initial Securities or Private Exchange
Securities upon exchange of such transferring Holder's certificated
Initial Security or Private Exchange Security or directions to transfer
such Holder's interest in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to Holders of such
Initial Securities that do not exchange their Initial Securities, and
Exchange Securities in certificated or global form will be available to
Holders that exchange such Initial Securities in such Registered
Exchange Offer.
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(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Private
Exchange Securities in global form with the global securities legend
and the Restricted Securities Legend set forth in Exhibit 1 hereto will
be available to Holders that exchange such Initial Securities in such
Private Exchange.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
purchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(g) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-registrar's
request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.06, 4.02 and 9.05 of
the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of
A-13
(a) any Definitive Security selected for redemption in whole or in
part pursuant to Article 3 of this Indenture, except the unredeemed
portion of any Definitive Security being redeemed in part, or (b) any
Security for a period beginning 15 days before the mailing of a notice
of an offer to repurchase or redeem Securities or 15 days before an
interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the Person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
A-14
(h) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 DEFINITIVE SECURITIES.
(a) A Global Security deposited with the Depository or with
the Trustee as Securities Custodian for the Depository pursuant to Section 2.1
shall be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for
A-15
such Global Security, only if such transfer complies with Section 2.3 and (i)
the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time such
Depository ceases to be a "clearing agency" registered under the Exchange Act
and a successor Depositary is not appointed by the Company within 90 days of
such notice, or (ii) an Event of Default has occurred and is continuing or
(iii) the Company, in its sole discretion, notifies the Trustee in writing
that it elects to cause the issuance of Definitive Securities under this
Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depository
to the Trustee located at its principal corporate trust office in the Borough of
Manhattan, The City of
New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 principal
amount and any integral multiple thereof and registered in such names as the
Depository shall direct. Any Definitive Security delivered in exchange for an
interest in a Transfer Restricted Security shall, except as otherwise provided
by Section 2.3(e), bear the restricted securities legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(d) In the event of the occurrence of one of the events
specified in Section 2.4(a), the Company shall promptly make available to the
Trustee a reasonable supply of Definitive Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"),
NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III)
2
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
(V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Temporary Regulation S Global Security Legend]
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION
S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE RULE 144A
GLOBAL SECURITY OR THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER
SECURITY REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH
DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE
EXPIRATION OF THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING
OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY
UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS
OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE UNITED SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY WILL NOTIFY ANY PURCHASER OF SUCH RESALE RESTRICTIONS, IF THEN
APPLICABLE.
[Definitive Securities Legend]
3
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
No. $
------------- ---------
CUSIP No.
---------
ISIN No. _
----------
10% Senior Subordinated Notes Due 2011
UNITED SURGICAL PARTNERS HOLDINGS, INC., a Delaware
corporation, promises to pay to CEDE & CO., or registered assigns, the
principal sum of ________ Dollars on December 15, 2011.
Interest Payment Dates: June 15 and December 15,
commencing June 15, 2002.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: __________, 20__
UNITED SURGICAL PARTNERS
HOLDINGS, INC.
By:
---------------------
Name:
--------------------
Title:
-------------------
By:
---------------------
Name:
--------------------
Title:
-------------------
4
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. TRUST COMPANY OF TEXAS, N.A.
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
----------------------------
Authorized Signatory
5
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10% Senior Subordinated Note Due 2011
1. INTEREST
UNITED SURGICAL PARTNERS HOLDINGS, INC., a Delaware
corporation (such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the "COMPANY"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above; PROVIDED, HOWEVER, that if a Registration Default (as defined in
the Registration Rights Agreement) occurs, additional interest will accrue on
this Security at a rate specified in the Registration Rights Agreement. The
Company will pay interest semiannually on June 15 and December 15 of each year,
commencing June 15, 2002. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from [INSERT DATE OF ISSUANCE.] Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the June 1 or December 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; PROVIDED,
HOWEVER, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire
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transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may
accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, U.S. Trust Company of Texas, N.A. (the "TRUSTEE"),
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated
as of December 19, 2001 (as such may be amended or supplemented from time to
time, "INDENTURE"), among the Company, the Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"ACT"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for
a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company, Parent and their subsidiaries to incur additional indebtedness; pay
dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in transactions
with affiliates; create liens on assets; transfer or sell assets; restrict
dividends or other payments of subsidiaries; and consolidate, merge or transfer
all or substantially all of its assets and the assets of its subsidiaries. These
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covenants are subject to important exceptions and qualifications.
5. OPTIONAL REDEMPTION
Except as set forth below, the Company shall not be entitled
to redeem the Securities at its option prior to December 15, 2006.
On and after December 15, 2006, the Company shall be entitled
at its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued and unpaid
interest thereon, if any, to the applicable redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), if redeemed during the 12-month period
commencing on December 15 of the years set forth below:
Period Redemption
------ Price
----------
2006 105.000%
2007 103.333%
2008 101.667%
2009 100.000%
2010 100.000%
In addition, prior to December 15, 2004, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) issued prior to such date at a redemption price
(expressed as a percentage of principal amount) of 110.00%, plus accrued and
unpaid interest to the redemption date, with the Net Cash Proceeds from one or
more Qualified Equity Offerings; PROVIDED, HOWEVER, that (1) at least 65% of
such aggregate principal amount of Securities (which includes Additional
Securities, if any) remains outstanding immediately after the occurrence of each
such redemption (other than Securities held, directly or indirectly, by the
Company or its Affiliates); and (2) each such redemption occurs within 90 days
after the date of the related Qualified Equity Offering.
8
Pending the application of the Net Cash Proceeds of any
Qualified Equity Offering to redeem Securities in accordance with the provisions
of this paragraph, Parent or its Restricted Subsidiaries may temporarily repay
Senior Indebtedness of the Company or any Domestic Guarantor with those Net Cash
Proceeds.
The Company shall be entitled, at its option, at any time as a
whole prior to December 15, 2006, to redeem the Securities (which includes the
Additional Securities, if any) at a redemption price equal to the sum of:
(1) the principal amount thereof, plus
(2) accrued and unpaid interest, if any, to the
redemption date, plus
(3) the Applicable Premium at the redemption date.
"APPLICABLE PREMIUM" means, with respect to any Security on
any redemption date, the greater of (1) 1.0% of the principal amount of such
Security and (2) the excess of (a) the present value at such redemption date of
(i) the redemption price of such Security at December 15, 2006 plus (ii) all
required interest payments due on such Security through December 15, 2006
(excluding accrued but unpaid interest), computed using a discount rate equal to
the Treasury Rate on such redemption date plus 50 basis points, over (b) the
principal amount of such Security.
"TREASURY RATE" means, as of any redemption date, the yield to
maturity as of such redemption date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the redemption date (or, if such statistical release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to December 15, 2006;
PROVIDED, HOWEVER, that if the period from the redemption date to December 15,
2006 is not equal to the constant maturity of a United States Treasury security
for which a weekly average yield is given, then the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the period from the redemption date
to December 15, 2006 is less than one year, the weekly average yield on
9
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at the Holder's registered address. Securities in denominations of
$1,000 principal amount or less may be redeemed in whole and not in part.
Securities in denominations larger than $1,000 principal amount may be redeemed
in part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control (as defined in Section 4.02 of the
Indenture), each Holder will have the right to require that the Company purchase
such Holder's Securities at a purchase price equal to 101% of the principal
amount of the Securities to be purchased plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.
8. SUBORDINATION
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
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9. GUARANTY
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior subordinated basis by each of the Guarantors.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed or 15 days before an interest payment
date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the
Security's owner for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
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14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Guarantors and the
Trustee shall be entitled to amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, to comply with Article 5 of the
Indenture, to provide for uncertificated Securities in addition to or in place
of certificated Securities, to add guarantees with respect to the Securities,
including Guaranties, to secure the Securities, to add additional covenants or
surrender rights and powers conferred on the Company or the Guarantors, to
comply with any request of the SEC in connection with qualifying the Indenture
under the Act, or to make any change that does not adversely affect the rights
of any Securityholder in any material respect or to evidence the release of a
Guarantor.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in
payment of interest on the Securities, continued for 30 days; (ii) default in
payment of principal on the Securities at maturity, upon optional redemption
pursuant to paragraph 5 of the Securities, upon declaration of acceleration or
otherwise, or failure by the Company to redeem or purchase Securities when
required; (iii) failure by the Company or any Guarantor to comply with other
agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company, any Guarantor or any Significant Subsidiary if the amount accelerated
(or so unpaid) exceeds $10 million; (v) certain events of bankruptcy or
insolvency with respect to the Company, any Guarantor and the Significant
Subsidiaries; (vi) certain judgments or decrees for the payment of money in
excess of $10 million; and (vii) certain defaults with respect to Guaranties. If
an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and
12
payable by notice in writing to the Company and the Trustee, and upon such
declaration the Securities will be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Securities being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor or the Trustee shall have any liability for any
obligations of the Company or any Guarantor under the Securities, any Guaranty
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
18. AUTHENTICATION
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
13
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
and corresponding ISINs to be printed on the Securities and has directed the
Trustee to use CUSIP numbers and corresponding ISINs in notices of redemption as
a convenience to Securityholders. No representation is made as to the accuracy
of such numbers either as printed on the Securities or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
21. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
22. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITY HOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
UNITED SURGICAL PARTNERS HOLDINGS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: INVESTOR RELATIONS
14
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _______________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------- -----------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
after the later of the date of original issuance of such Securities and the last
date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities are
being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) / / to the Company; or
(2) / / in the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities
Act) that purchases for its own account or for the
account of a qualified institutional buyer to whom
notice is given that such transfer is being made in
reliance on Rule 144A, in
15
each case pursuant to and in compliance with
Rule 144A under the Securities Act; or
(3) / / outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act in compliance with Rule 904 under the
Securities Act; or
(4) / / pursuant to the exemption from registration provided
by Rule 144 under the Securities Act; or
(5) / / pursuant to an effective registration statement
under the Securities Act.
If such transfer is being made pursuant to an offshore
transaction in accordance with Rule 904 under the Securities Act, the
undersigned further certifies that:
(i) the offer of the Securities was not made to a person in
the United States;
(ii) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(iii) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903 or Rule 904 of
Regulation S, as applicable;
(iv) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act;
(v) we have advised the transferee of the transfer
restrictions applicable to the Securities; and
(vi) if the circumstances set forth in Rule 904(B) under the
Securities Act, are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be
16
offered and sold during the distribution compliance period specified
in Rule 903 of Regulation S; pursuant to registration of the
Securities under the Securities Act; or pursuant to an available
exemption from the registration requirements under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; PROVIDED, HOWEVER,
that if box (3) or (4) is checked, the Trustee shall be entitled to
require, prior to registering any such transfer of the Securities, such
legal opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act such as the exemption
provided by Rule 144 under such Act.
------------------------
Signature
Signature Guarantee:
---------------------------- -------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
17
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
----------- -----------------------------
NOTICE: To be executed by
an executive officer
18
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Date of Amount of decrease Amount of increase in Principal amount of this Signature of authorized
Exchange in Principal amount Principal amount of Global Security officer of Trustee or
of this Global this Global Security following such decrease Securities Custodian
Security or increase
19
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.02 or 4.07 of the Indenture, check the box: / /
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.02 or 4.07 of the Indenture,
state the amount in principal amount: $o
Date: Your Signature
--------------- ----------------------
(Sign exactly as your
name appears on the
other side of this
Security.)
Signature Guarantee:
---------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]*/**/
No. $
------------- ---------
CUSIP No.
---------
ISIN No.
---------
10% Senior Subordinated Notes Due 2011
UNITED SURGICAL PARTNERS HOLDINGS, INC., a Delaware
corporation, promises to pay to __________, or registered assigns, the
principal sum of ________ Dollars on December 15, 2011.
Interest Payment Dates: June 15 and December 15,
commencing June 15, 2001.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: __________, 20___
UNITED SURGICAL PARTNERS HOLDINGS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
-----------------------------
Authorized Signatory
*/If the Security is to be issued in global form add the
Global Securities Legend from Exhibit 1 to Appendix A and the attachment from
such Exhibit 1 captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".
**/If the Security is a Private Exchange Security issued in
a Private Exchange to an Initial Purchaser holding an unsold portion of its
initial allotment, add the Restricted Securities Legend from Exhibit 1 to
Appendix A and replace the Assignment Form included in this Exhibit A with
the Assignment Form included in such Exhibit 1.
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
10% Senior Subordinated Note Due 2011
1. INTEREST
United Surgical Partners Holdings, Inc., a Delaware
corporation (such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the "COMPANY"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above; PROVIDED, HOWEVER, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs, additional interest
will accrue on this Security at a rate specified in the Registration Rights
Agreement. The Company will pay interest semiannually on June 15 and December
15 of each year, commencing June 15, 2002. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from [INSERT LAST INTEREST PAYMENT DATE ON WHICH
INTEREST WAS PAID ON THE INITIAL SECURITIES OR, IF NO INTEREST HAS BEEN PAID
ON THE INITIAL SECURITIES, INSERT THE DATE OF ORIGINAL ISSUANCE OF THE INITIAL
SECURITIES.] Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities
at the close of business on the June 1 or December 1 next preceding the
interest payment date even if Securities are canceled after the record date
and on or before the interest payment date. Holders must surrender Securities
to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company.
The Company will make all payments in respect of a certificated Security
(including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; PROVIDED, HOWEVER, that payments
on a certificated Security will be made by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, U.S. Trust Company of Texas, N.A., (the
"TRUSTEE"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated
as of December 19, 2001 (as such may be amended or supplemented from time to
time, "INDENTURE"), among the Company, the Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect
3
on the date of the Indenture (the "ACT"). Terms defined in the Indenture and
not defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with
Section 4.03 of the Indenture, to issue Additional Securities pursuant to
Section 2.13 of the Indenture. The Initial Securities issued on the Issue
Date, any Additional Securities and all Exchange Securities or Private
Exchange Securities issued in exchange therefor will be treated as a single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company, Parent and their subsidiaries to incur
additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; restrict dividends or other payments of
subsidiaries; and consolidate, merge or transfer all or substantially all of
its assets and the assets of its subsidiaries. These covenants are subject to
important exceptions and qualifications.
5. OPTIONAL REDEMPTION
Except as set forth below, the Company shall not be
entitled to redeem the Securities at its option prior to December 15, 2006.
On and after December 15, 2006, the Company shall be
entitled at its option to redeem all or a portion of the Securities upon not
less than 30 nor more than 60 days' notice, at the redemption prices
(expressed in percentages of principal amount on the redemption date), plus
accrued and unpaid interest thereon, if any, to the applicable redemption
date (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date), if redeemed
during the 12-month period commencing on December 15 of the years set forth
below:
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PERIOD Redemption
------ PRICE
----------
2006 105.000%
2007 103.333%
2008 101.667%
2009 100.000%
2010 100.000%
In addition, prior to December 15, 2004, the Company shall
be entitled at its option on one or more occasions to redeem Securities
(which includes Additional Securities, if any) in an aggregate principal
amount not to exceed 35% of the aggregate principal amount of the Securities
(which includes Additional Securities, if any) issued prior to the redemption
date at a redemption price (expressed as a percentage of principal amount) of
110.00%, plus accrued and unpaid interest to the redemption date, with the
net cash proceeds from one or more Qualified Equity Offerings; PROVIDED,
HOWEVER, that (1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains outstanding
immediately after the occurrence of each such redemption (other than
Securities held, directly or indirectly, by the Company or its Affiliates);
and (2) each such redemption occurs within 90 days after the date of the
related Qualified Equity Offering.
Pending the application of the Net Cash Proceeds of any
Qualified Equity Offering to redeem Securities in accordance with the
provisions of this paragraph, Parent or its Restricted Subsidiaries may
temporarily repay Senior Indebtedness of the Company or any Domestic
Guarantor with those Net Cash Proceeds.
The Company shall be entitled, at its option, at any time
as a whole prior to December 15, 2006, to redeem the Securities (which
includes the Additional Securities, if any) at a redemption price equal to
the sum of:
(1) the principal amount thereof, PLUS
(2) accrued and unpaid interest, if any, to the redemption
date, PLUS
(3) the Applicable Premium at the redemption date.
"APPLICABLE PREMIUM" means, with respect to any Security on
any redemption date, the greater of (1) 1.0% of
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the principal amount of such Security and (2) the excess of (a) the present
value at such redemption date of (i) the redemption price of such Security at
December 15, 2006 plus (ii) all required interest payments due on such
Security through December 15, 2006 (excluding accrued but unpaid interest),
computed using a discount rate equal to the Treasury Rate on such redemption
date plus 50 basis points, over (b) the principal amount of such Security.
"TREASURY RATE" means, as of any redemption date, the yield
to maturity as of such redemption date of United States Treasury securities
with a constant maturity (as compiled and published in the most recent
Federal Reserve Statistical Release H.15 (519) that has become publicly
available at least two Business Days prior to the redemption date (or, if
such statistical release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
redemption date to December 15, 2006; PROVIDED, HOWEVER, that if the period
from the redemption date to December 15, 2006 is not equal to the constant
maturity of a United States Treasury security for which a weekly average
yield is given, then the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such
yields are given, except that if the period from the redemption date to
December 15, 2006 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of
one year shall be used.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder of Securities
to be redeemed at the Holder's registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such
portions thereof) called for redemption.
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7. PUT PROVISIONS
Upon a Change of Control (as defined in Section 4.02 of the
Indenture), each Holder will have the right to require that the Company
purchase such Holder's Securities at a purchase price equal to 101% of the
principal amount of the Securities to be purchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on the related
interest payment date) as provided in, and subject to the terms of, the
Indenture.
Under certain circumstances as set forth in the Indenture,
the Company will be required to offer to purchase Securities with the Net
Available Cash from Asset Dispositions.
8. SUBORDINATION
The Securities are subordinated to Senior Indebtedness of
the Company, as defined in the Indenture. To the extent provided in the
Indenture, Senior Indebtedness of the Company must be paid before the
Securities may be paid. The Company agrees, and each Securityholder by
accepting a Security agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give it effect and appoints the
Trustee as attorney-in-fact for such purpose.
9. GUARANTY
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior subordinated basis by each of the Guarantors.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before
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the mailing of a notice of redemption of Securities to be redeemed or 15 days
before an interest payment date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as
the Security's owner for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time
shall be entitled to terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on
the Securities to redemption or maturity, as the case may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture,
(i) the Indenture and the Securities may be amended with the written consent
of the Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Securityholder, the Company, the
Guarantors and the Trustee shall be entitled to amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, to
comply with Article 5 of the Indenture, to provide for uncertificated
Securities in addition to or in place of certificated Securities, to add
guarantees with respect to the Securities, including Guaranties, or to secure
the Securities, to add additional covenants or surrender rights and powers
conferred on the Company or the Guarantors, to comply with any request of the
SEC in connection with qualifying the Indenture under the Act, or to make any
8
change that does not adversely affect the rights of any Securityholder in any
material respect or to evidence the release of a Guarantor.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default
in payment of interest on the Securities continued for 30 days; (ii) default
in payment of principal on the Securities at maturity, upon optional
redemption pursuant to paragraph 5 of the Securities, upon declaration of
acceleration or otherwise, or failure by the Company to redeem or purchase
Securities when required; (iii) failure by the Company, or any Guarantor to
comply with other agreements in the Indenture or the Securities, in certain
cases subject to notice and lapse of time; (iv) certain accelerations
(including failure to pay within any grace period after final maturity) of
other Indebtedness of the Company, any Guarantor or any Significant
Subsidiary if the amount accelerated (or so unpaid) exceeds $10 million; (v)
certain events of bankruptcy or insolvency with respect to the Company, any
Guarantor and the Significant Subsidiaries; (vi) certain judgments or decrees
for the payment of money in excess of $10 million; and (vii) certain defaults
with respect to Guaranties. If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the
Securities may declare all the Securities to be due and payable by notice in
writing to the Company and the Trustee, and upon such declaration the
Securities will be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or
security satisfactory to it. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.
9
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or stockholder
of the Company or any Guarantor or the Trustee shall have any liability for
any obligations of the Company or any Guarantor under the Securities, any
Guaranty or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. AUTHENTICATION
This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent) manually signs the
certificate of authentication on the other side of this Security.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
20. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures the Company has caused CUSIP
numbers and corresponding ISINs to be printed on the Securities and has
directed the Trustee to use CUSIP numbers and corresponding ISINs in notices
of redemption as a convenience to Securityholders. No representation is made
as to the accuracy of such numbers either as printed on the Securities or as
contained in any
10
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
21. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.
Each Holder of a Security, by acceptance hereof,
acknowledges and agrees to the provisions of the Registration Rights
Agreement, including the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
22. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITY HOLDER A COPY OF THE INDENTURE
WHICH HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE
MADE TO:
UNITED SURGICAL PARTNERS HOLDINGS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: INVESTOR RELATIONS
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------------------- -------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.02 or 4.07 of the Indenture, check the box: / /
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.02 or 4.07 of the Indenture,
state the amount in principal amount: $ -
Date: Your Signature:
--------------- ------------------------------------
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
----------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.