EXHIBIT 4.1
EXECUTION COPY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
▇▇▇ Acquisition Corp.
to be merged into
AmeriPath, Inc.
Issuer
10 1/2% Senior Subordinated Notes Due 2013
------------------------
INDENTURE
Dated as of March 27, 2003
------------------------
U.S. Bank National Association
Trustee
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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) ..................................................... 7.06
(b) (2) ..................................................... 7.06; 7.07
(c) ..................................................... 13.02
(d) ..................................................... 7.06
314 (a) ..................................................... 4.02; 4.12;
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
(c) ..................................................... 9.04
3l7 (a) (l) ..................................................... 6.08
(a) (2) ..................................................... 6.09
(b) ..................................................... 2.04
318 (a) ..................................................... 13.01
(b) ..................................................... N.A.
(c) ..................................................... 13.01
N.A. means Not Applicable.
----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this
Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions ...................................................1
SECTION 1.02. Other Definitions ............................................32
SECTION 1.03. Incorporation by Reference of TIA ............................33
SECTION 1.04. Rules of Construction ........................................33
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating ..............................................34
SECTION 2.02. Execution and Authentication .................................35
SECTION 2.03. Registrar and Paying Agent ...................................35
SECTION 2.04. Paying Agent To Hold Money in Trust ..........................36
SECTION 2.05. Securityholder Lists .........................................37
SECTION 2.06. Transfer and Exchange ........................................37
SECTION 2.07. Replacement Securities .......................................38
SECTION 2.08. Outstanding Securities .......................................38
SECTION 2.09. Temporary Securities .........................................38
SECTION 2.10. Cancellation .................................................39
SECTION 2.11. Defaulted Interest ...........................................39
SECTION 2.12. CUSIP Numbers ................................................39
SECTION 2.13. Additional Securities ........................................40
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee ...........................................40
SECTION 3.02. Selection of Securities To Be Redeemed .......................41
SECTION 3.03. Notice of Redemption .........................................41
SECTION 3.04. Effect of Notice of Redemption ...............................42
SECTION 3.05. Deposit of Redemption Price ..................................42
SECTION 3.06. Securities Redeemed in Part ..................................42
2
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities ........................................43
SECTION 4.02. SEC Reports ..................................................43
SECTION 4.03. Limitation on Indebtedness ...................................44
SECTION 4.04. Limitation on Restricted Payments ............................49
SECTION 4.05. Limitation on Restrictions on
Distributions from Restricted Subsidiaries ................53
SECTION 4.06. Limitation on Sales of Assets
and Subsidiary Stock ......................................55
SECTION 4.07. Limitation on Affiliate Transactions .........................60
SECTION 4.08. Limitation on the Sale or Issuance
of Capital Stock of Restricted Subsidiaries ...............62
SECTION 4.09. Change of Control ............................................63
SECTION 4.10. Limitation on Line of Business
and Operations ............................................64
SECTION 4.11. Future Guarantors ............................................65
SECTION 4.12. Contribution Contingent Note Collateral Account ..............65
SECTION 4.13. Compliance Certificate .......................................65
SECTION 4.14. Further Instruments and Acts .................................65
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 When Company May Merge or TRANSFER ASSETS ....................66
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default ............................................69
SECTION 6.02. Acceleration .................................................71
SECTION 6.03. Other Remedies ...............................................72
SECTION 6.04. Waiver of Past Defaults ......................................72
SECTION 6.05. Control by Majority ..........................................73
SECTION 6.06. Limitation on Suits ..........................................73
SECTION 6.07. Rights of Holders to Receive Payment .........................74
SECTION 6.08. Collection Suit by Trustee ...................................74
SECTION 6.09. Trustee May File Proofs of Claim .............................74
SECTION 6.10. Priorities ...................................................74
SECTION 6.11. Undertaking for Costs ........................................75
SECTION 6.12. Waiver of Stay or Extension Laws .............................75
3
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee ............................................75
SECTION 7.02. Rights of Trustee ............................................77
SECTION 7.03. Individual Rights of Trustee .................................78
SECTION 7.04. Trustee's Disclaimer .........................................78
SECTION 7.05. Notice of Defaults ...........................................78
SECTION 7.06. Reports by Trustee to Holders ................................78
SECTION 7,07. Compensation and Indemnity ...................................79
SECTION 7.08. Replacement of Trustee .......................................80
SECTION 7.09. Successor Trustee by Merger ..................................81
SECTION 7.10. Eligibility; Disqualification ................................81
SECTION 7.11. Preferential Collection of Claims Against Company ............82
ARTICLE 8
DISCHARGE OF
INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance .............82
SECTION 8.02. Conditions to Defeasance .....................................83
SECTION 8.03. Application of Trust Money ...................................84
SECTION 8.04. Repayment to Company .........................................85
SECTION 8.05. Indemnity for Government Obligations .........................85
SECTION 8.06. Reinstatement ................................................85
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders ...................................85
SECTION 9.02. With Consent of Holders ......................................86
SECTION 9.03. Compliance with TIA ..........................................88
SECTION 9.04. Revocation and Effect of Consents and Waivers ................88
SECTION 9.05. Notation on or Exchange of Securities ........................88
SECTION 9.06. Trustee To Sign Amendments ...................................88
SECTION 9.07. Payment for Consent ..........................................89
4
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement To Subordinate .....................................89
SECTION 10.02. Liquidation, Dissolution, Bankruptcy .........................89
SECTION 10.03. Default on Senior Indebtedness
of the Company ............................................90
SECTION 10.04. Acceleration of Payment of Securities. .......................92
SECTION 10.05. When Distribution Must Be Paid Over ..........................92
SECTION 10.06. Subrogation ..................................................92
SECTION 10.07. Relative Rights ..............................................92
SECTION 10.08. Subordination May Not Be Impaired
by Company ................................................93
SECTION 10.09. Rights of Trustee and Paying Agent ...........................93
SECTION 10.10. Distribution or Notice to Representative .....................94
SECTION 10.11. Article 10 Not To Prevent Events
of Default or Limit Right To Accelerate ...................94
SECTION 10.12. Trust Moneys Not Subordinated ................................94
SECTION 10.13. Trustee Entitled To Rely .....................................94
SECTION 10.14. Trustee To Effectuate Subordination ..........................95
SECTION 10.15. Trustee Not Fiduciary for Holders
of Senior Indebtedness of the Company .....................95
SECTION 10.16. Reliance by Holders of Senior
Indebtedness of the Company on Subordination Provisions ...96
ARTICLE 11
SUBSIDIARY GUARANTIES
SECTION 11.01. Subsidiary 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 Subsidiary Guarantor .............................100
SECTION 11.07. Contribution ................................................100
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTIES
SECTION 12.01. Agreement to Subordinate ....................................101
SECTION 12.02. Liquidation, Dissolution, Bankruptcy ........................101
SECTION 12.03. Default on Senior Indebtedness of
5
Subsidiary Guarantor ........................................102
SECTION 12.04. Demand for Payment ..........................................103
SECTION 12.05. When Distribution Must Be Paid Over .........................104
SECTION 12.06. Subrogation .................................................104
SECTION 12.07. Relative Rights .............................................104
SECTION 12.08. Subordination May Not Be Impaired by
the Subsidiary Guarantors ................................104
SECTION 12.09. Rights of Trustee and Paying Agent ..........................105
SECTION 12.10. Distribution or Notice to Representative ....................105
SECTION 12.11. Article 12 Not To Prevent Events of Default or
Limit Right To Demand Payment ............................106
SECTION 12.12. Trustee Entitled To Rely ....................................106
SECTION 12.13. Trustee To Effectuate Subordination .........................107
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Subsidiary Guarantor .....................107
SECTION 12.15. Reliance by Holders of Senior Indebtedness of
Subsidiary Guarantors on Subordination Provisions\ .......107
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TIA Controls ................................................107
SECTION 13.02. Notices .....................................................108
SECTION 13.03. Communication by Holders with
Other Holders ............................................108
SECTION 13.04. Certificate and Opinion as to Conditions Precedent ..........109
SECTION 13.05. Statements Required in Certificate or Opinion ...............109
SECTION 13.06. When Securities Disregarded .................................109
SECTION 13,07. Rules by Trustee, Paying Agent and Registrar ................110
SECTION 13.08. Legal Holidays ..............................................110
SECTION 13.09. Governing Law ...............................................110
SECTION 13.10. No Recourse Against Others ..................................110
SECTION 13.11. Successors ..................................................110
SECTION 13.12. Multiple Originals ..........................................110
SECTION 13.13. Table of Contents; Headings .................................111
Rule l44A/Regulation S Appendix
Exhibit 1 - Form of Security
Exhibit A - Form of Exchange Security or Private Exchange Security
6
Annex A - Form of Supplemental
Indenture
INDENTURE dated as of March 27, 2003, among ▇▇▇ ACQUISITION
CORP., a Delaware corporation, which will foe merged with and into
AMERIPATH, INC., a Delaware corporation, with AMERIPATH, INC.
continuing as the surviving corporation (the "Company"), AMERIPATH
HOLDINGS, INC., a Delaware corporation, the SUBSIDIARY GUARANTORS
listed on the signature pages hereto and U.S. Bank National
Association (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities, Private Exchange Securities and Additional
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) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or (3) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary; PROVIDED,
HOWEVER that any such Restricted Subsidiary described in clause (2) or (3) above
is primarily engaged in a Related Business.
"Additional Securities" means, subject to the Company's compliance
with Section 4.03, 10 1/2% Senior Subordinated Notes Due 2013 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;
2
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Sections 4.04, 4.06 and 4.07 only, "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 the Company
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.
"AmeriPath Indemnity" means AmeriPath Indemnity Ltd., a Cayman Islands
corporation, and its successors.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company 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 a Restricted Subsidiary (other
than directors' qualifying shares or 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 the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary
(other than, in the case of clauses (1), (2) and (3) above, (A) a disposition by
a Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (B) for purposes of Section 4.06 only,
(x) a disposition that constitutes a Restricted Payment (or would constitute a
Restricted Payment but for the exclusions from the definition thereof) and that
is not prohibited by Section 4.04 or a Permitted Investment and (y) a
disposition of all or substantially all the assets of the Company in accordance
with Section 5.01, (C) the disposition of cash or Temporary Cash Investments,
(D) any sale or disposition deemed to occur in connection with creating or
granting any Liens, (E) sales or grants of licenses or sublicenses to use the
patents, trade secrets, know-how and other intellectual property of the Company
or its Restricted Subsidiaries to the extent such license does not interfere
with the business
3
of the Company or any Restricted Subsidiary, (F) any exchange of tangible assets
with a fair market value of less than $5,000,000 for like-kind tangible assets
to be used in connection with a Related Business, but only to the extent that
such exchange qualifies for nonrecognition of gain or loss under Section 1031 of
the Code, (G) any sale or disposition of obsolete inventory or worn out assets
permitted pursuant to the
Indenture, (H) any disposition of the Capital Stock of
a Consolidated Managed Subsidiary so long as such Consolidated Managed
Subsidiary does not cease to be a Consolidated Managed Subsidiary as a result of
such disposition and (I) a disposition of assets with a fair-market value of
less than $1,000,000).
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended); PROVIDED, HOWEVER, that if such Sale/Leaseback Transaction
results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby shall be determined in accordance with the definition of "Capital Lease
Obligation".
"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 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" with respect to a Person means the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board; PROVIDED, HOWEVER, that for purposes of Section 4.09 this
definition shall not include any such committees.
"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
4
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.
"Change of Control" means the occurrence of any of the following
events:
(1) prior to the earlier to occur of (A) the first public offering
of common stock of Parent or (B) the first public offering of common stock
of the Company, the Permitted Holders cease to be the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of the
Voting Stock of Parent or the Company, whether as a result of issuance of
securities of Parent or the Company, any merger, consolidation, liquidation
or dissolution of Parent or the Company, or any direct or indirect transfer
of securities by Parent or otherwise (for purposes of this clause (1) and
clause (2) below, the Permitted Holders shall be deemed to beneficially
own, any Voting Stock of a Person (the "specified person") held by any
other Person (the "parent entity") so long as the Permitted Holders
beneficially own (as so defined), directly or indirectly, in the aggregate
a majority of the voting power of the Voting Stock of the parent entity);
(2) any "person" (as such term is used in Sections 13(d) and 14
(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in clause (1) above, except that
for purposes of this clause (2) 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 the Company; PROVIDED, HOWEVER, that
the Permitted Holders beneficially own (as defined in
5
clause (l) above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company
than such other person and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority
of the Board of Directors of the Company (for the purposes of this clause
(2), such other person shall be deemed to beneficially own any Voting Stock
of a specified person held by a parent entity, if such other person is the
beneficial owner (as defined in this clause (2)), directly or indirectly,
of more than 35% of the voting power of the Voting Stock of such parent
entity and the Permitted Holders beneficially own (as defined in clause (1)
above), directly or indirectly, in the aggregate a lesser percentage of the
voting power of the Voting Stock of such parent entity and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
entity);
(3) individuals who on the Issue Date constituted the Board of
Directors of the Company or the Parent Board (together with any new
directors whose election by such Board of Directors of the Company or the
Parent Board or whose nomination for election by the shareholders of the
Company or Parent, as the case may be, was approved or nominated by (1) a
vote of a majority of the directors of the Company or of Parent, as the
case may be, then still in office who were either directors on the Issue
Date or whose election or nomination for election was previously so
approved or (2) Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ IX, L.P.) cease for any
reason to constitute a majority of the Board of Directors of the Company or
the Parent Board then in office;
(4) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(5) the merger or consolidation of Parent or the Company with or
into another Person or the merger of another Person with or into Parent or
the Company, or the sale of all or substantially all the assets of Parent
or the Company (determined on a consolidated basis) to another Person other
than (i) a transaction in which the survivor or transferee is a Person that
is controlled by the Permitted Holders or (ii) a transaction following
which (A) in the case of a merger or consolidation transaction, holders of
securities that represented 100% of the Voting Stock of Parent or
6
the Company 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 (B) in the
case of a sale of assets transaction, each transferee becomes an obligor in
respect of the Securities and a Subsidiary of the transferor of such
assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of:
(x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending prior to the date of such
determination for which internal financial statements of the Company are
then available to
(y) Consolidated Interest Expense for such four fiscal quarters;
PROVIDED, HOWEVER, that:
(1) if the Company 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, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period,
(2) if the Company 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 (in each
7
case other than Indebtedness Incurred under any revolving credit facility
unless such Indebtedness has been permanently repaid and has not been
replaced) on the date of the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio, 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 the
Company or such Restricted Subsidiary has not earned the interest income
actually earned 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 the Company or any
Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to EBITDA (if positive)
directly attributable to the assets which are 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
the Company or any Restricted Subsidiary repaid, repurchased, defeased,
assumed by a third party (to the extent the Company and its Restricted
Subsidiaries are no longer liable for such Indebtedness) or otherwise
discharged with respect to the Company 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 to the Indebtedness
of such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale),
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any
8
Indebtedness) as if such Investment or acquisition 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 the
Company 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 the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition 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 the Company.
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 if such Interest Rate Agreement has a remaining term in excess
of 12 months). If any Indebtedness is incurred under a revolving credit facility
and is being given pro forma effect, the interest on such Indebtedness shall be
calculated based on the average daily balance of such Indebtedness for the four
fiscal quarters subject to the pro forma calculation (but, in the case of any
Indebtedness Incurred under a revolving credit facility and Incurred other than
pursuant to clause (b)(1) of Section 4.03, only to the extent such Indebtedness
is Incurred solely for working capital purposes or other general corporate
purposes in the ordinary course of business and not, in any case, to support
directly or indirectly any acquisitions).
"Consolidated Interest Expense" means, for any period, the total
interest expense (excluding any such interest expense with respect to Existing
Contingent Notes) of the Company and its consolidated Restricted Subsidiaries,
PLUS, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication,
9
(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 Hedging Obligations,
(7) dividends accrued in respect of all Preferred Stock held by
Persons other than the Company or a Wholly Owned Subsidiary (other than
dividends payable solely in Capital Stock (other than Disqualified Stock)
of the Company); PROVIDED, HOWEVER, that such dividends shall 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 Preferred
Stock (expressed as a decimal) for such period (as estimated by the chief
financial officer of the Company in good faith),
(8) interest incurred in connection with Investments in
discontinued operations,
(9) interest accruing on any Indebtedness of any other Person to
the extent such Indebtedness is Guaranteed by (or secured by the assets of)
the Company or any Restricted Subsidiary, and
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Managed Subsidiary" means any Managed Entity the
accounts of which are consolidated with the Company and its Subsidiaries in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there shall
not be included in such Consolidated Net Income:
10
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend,
interest payment or other distribution (subject, in the case of a
dividend or other distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (3) below), and
(B) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause);
and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
11
(4) any gain or loss realized upon the sale or other disposition
of any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any sale-and-leaseback arrangement) which are
not sold or otherwise disposed of in the ordinary course of business and
any gain or loss realized upon the sale or other disposition of any Capital
Stock of any Person;
(5) extraordinary gains or losses; and
(6) the cumulative effect of a change in accounting principles;
in each case for such period. Notwithstanding the foregoing, for the purpose 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 the Company or a Restricted
Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or
returns increase the amount of Restricted Payments permitted under such section
pursuant to Section 4.04(a)(3)(D). For purposes of clause (3) above, a
Consolidated Managed Subsidiary shall not be deemed to be subject to
restrictions on the payment of dividends or the making of distributions to the
Company with respect to any amount that the Company or any Subsidiary Guarantor
has earned, but due to payment timing considerations has not yet received, from
such Consolidated Managed Subsidiary pursuant to a management services or
similar agreement.
"Contingent Note Reserve" means the cash collateral account of Parent,
and any replacement thereto, which is under the control of the agent for the
lenders under the Credit Agreement and which relates to the prefunding of
obligations in respect of the Existing Contingent Notes.
"Credit Agreement" means the Credit Agreement dated as of the Issue
Date by and among Parent, the Company, certain of its Subsidiaries, the lenders
referred to therein and Credit Suisse First Boston, as Administrative Agent,
together with the documents related thereto (including the term loans, revolving
loans, swingline loans and letters of credit made or issued thereunder, 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, maturity, terms, conditions, covenants and other provisions) from
time to time, and any agreement (and related document) governing
12
Indebtedness incurred to Refinance, in whole or in part, the borrowings, letters
of credit 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 lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement with respect to 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" means, with respect to a Person, (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 committed to lend up to, at least $75.0 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 if 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
13
of the Stated Maturity of the Securities shall not constitute Disqualified Stock
if (1) 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 in Sections 4.06 and 4.09 and (2) 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 shall be calculated in accordance with
the terms of such 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 shall be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"EBITDA" 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 the Company and its consolidated
Restricted Subsidiaries,
(2) Consolidated Interest Expense,
(3) depreciation and amortization expense of the Company and its
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in
a prior period),
(4) all other non-cash charges of the Company and its consolidated
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 non-recurring fees, charges or other expenses made or
Incurred in connection with the
14
Transactions that are paid or otherwise accounted for within 90 days of the
consummation of the Transactions,
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and 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 and
only if a corresponding amount would be permitted at the date of determination
to be dividended to the Company or a Subsidiary Guarantor (or, in the case of
Consolidated Managed Subsidiary, paid to the Company or a Subsidiary Guarantor
pursuant to a management services or other similar agreement) by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Securities" has the meaning provided in the Appendix.
"Existing Contingent Notes" means the contingent notes issued by
AmeriPath, Inc. or any of its Subsidiaries in connection with acquisitions prior
to the Issue Date and any earn-out obligations Incurred prior to the Issue Date
which are similar in nature thereto but which are not represented by actual
notes.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value shall be determined in good faith by the Board
of Directors of the Company, whose determination shall be conclusive and
evidenced by a resolution of such Board of Directors; PROVIDED, HOWEVER, that
for purposes of Section 4.04(a)(3)(B), if the Fair Market Value of the
property or assets in question is so determined to be in excess of $15.0
million, such determination must be confirmed by an Independent Qualified
Party. For purposes of determining Fair Market Value of Capital Stock, the
value of the Capital Stock of a Person
15
shall be based upon such Person's property and assets, exclusive of goodwill or
any similar intangible asset.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Company that is not a Domestic Restricted Subsidiary.
"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 the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC. All ratios and computations based on GAAP contained in this Indenture
shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
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 other 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);
16
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.
"Guaranty Agreement" means a supplemental indenture, substantially in
the form of Annex A to this Indenture, pursuant to which a Subsidiary Guarantor
guarantees the Company's obligations with respect to the Securities on the terms
provided for in this Indenture.
"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 Capital Stock of a Person
existing at the time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or 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) the obligation to pay a premium in respect of Indebtedness
arising in connection with the issuance of a notice of redemption or the
making of a mandatory offer to purchase such Indebtedness
shall not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
17
(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 and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into by
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 (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock of
such Person or any Preferred Stock of any Subsidiary of such Person, the
principal amount of such Capital Stock to be determined in accordance with
this Indenture (but excluding, in each case, any accrued dividends);
(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 property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser
18
of the value of such property or 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.
Notwithstanding the foregoing, in connection with the purchase by the Company or
any Restricted Subsidiary of any business, the term "Indebtedness" shall 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 45 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 shall 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 standing; PROVIDED, HOWEVER, that
such firm is not an Affiliate of the Company. With respect to any contract or
series of related contracts for the rendering of services entered into in the
ordinary course of business by the Company or any Restricted Subsidiary with any
other Person, "Independent Qualified Party" also shall include any Person who,
in the good faith judgment of the Board of Directors of the Company, has
sufficient expertise and industry knowledge to qualify as an expert with respect
to such contract or contracts; PROVIDED, HOWEVER, that such Person is not an
Affiliate of the Company.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement with
respect to exposure to interest rates.
19
"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 the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; PROVIDED, HOWEVER,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary equal to an amount (if positive) equal to (x)
the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; 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 of the
Company.
"Issue Date" means March 27, 2003.
"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).
"Managed Entity" means any professional association or corporation
that employs or contracts with physicians engaged in a pathology practice and
has entered
20
into a long-term management agreement with the Company or any Restricted
Subsidiary.
"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 non-cash form), in each case net of:
(1) all legal, accounting, investment banking, brokerage title and
recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be
paid or accrued as a liability under GAAP, as a consequence of such Asset
Disposition,
(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,
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries or Managed Entities as
a result of such Asset Disposition, and
(4) the deduction of appropriate amounts provided by the seller as
a reserve, in accordance with GAAP, for adjustments in respect of the sale
price of the assets that were the subject of such Asset Disposition or 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 the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock or Indebtedness, 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
21
fees actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"Obligations" means, with respect to any Indebtedness, all obligations
for principal, premium, interest, penalties, fees, indemnifications, expenses,
reimbursements, damages and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Circular" means the final offering circular dated March 13,
2003 used in connection with the offering of the Initial Securities.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Parent" means AmeriPath Holdings, Inc., a Delaware corporation, and
its successors.
"Parent Board" means the Board of Directors of Parent or any committee
thereof duly authorized to act on behalf of such Board; PROVIDED, HOWEVER, that
for purposes of Section 4.09 this definition shall not include any such
committees.
"Permitted Holders" means (i) Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ IX, L.P.
and its Affiliates (including, without limitation, any investment partnership
under common control with Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ IX, L.P.), (ii) any
officer, director, employee, partner, member or stockholder of the manager or
general partner of the foregoing Persons and (iii) any Related Parties with
respect to any of the foregoing Persons. Except for a Permitted Holder
specifically identified by name, in determining whether Voting Stock is owned by
a Permitted Holder, only Voting Stock acquired by a Permitted Holder in its
described capacity will be treated as "beneficially owned" by such Permitted
Holder.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
22
(1) the Company, a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary;
PROVIDED, HOWEVER, that the primary business of such Restricted Subsidiary
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 Restricted Subsidiary;
PROVIDED, HOWEVER, that such Person's primary business is a Related
Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; PROVIDED, HOWEVER,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) 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;
(6) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary;
(7) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company
or any Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.06;
(9) any Person where such Investment was acquired by the Company
or any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts
23
receivable or (b) as a result of a foreclosure by the Company or any of its
Restricted Subsidiaries with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default;
(10) any Person to the extent such Investments consist of prepaid
expenses, negotiable instruments held for collection and lease, utility and
workers' compensation, performance and other similar deposits made in the
ordinary course of business by the Company or any Restricted Subsidiary;
(11) any Person to the extent such Investments consist of Hedging
Obligations or Guarantees thereof otherwise permitted under Section 4.03;
(12) any Person to the extent that such Investments consist of
non-cash consideration received in the form of securities, notes or similar
obligations in connection with dispositions of obsolete or worn out assets
permitted to be disposed of pursuant to this Indenture;
(13) any Investment to the extent acquired in exchange for the
issuance of Capital Stock of Parent;
(14) payments to AmeriPath Indemnity, or any successor or
additional captive insurance subsidiary established by the Company or its
Subsidiaries, in an amount not to exceed the estimated actuarial
self-insurance requirements of the Company and the Restricted Subsidiaries
and any reasonable general corporate and overhead expenses of such captive
insurance companies, as determined in good faith by the Company's chief
financial officer;
(15) payments subject to reimbursement that are made by the Company
or any Restricted Subsidiary in the ordinary course of business on behalf
of any Managed Entity that is not a Consolidated Managed Subsidiary in
connection with the provision of services to such Managed Entity;
(16) any Person to the extent such Investment in such Person
existed on the Issue Date and any Investment that replaces, refinances or
refunds such an Investment, PROVIDED that the new Investment is in an
amount that does not exceed that amount replaced, refinanced or refunded
and is made in the same Person as the Investment replaced, refinanced or
refunded; and
24
(17) Persons to the extent such Investments, when taken together
with all other Investments made pursuant to this clause (17) outstanding on
the date such Investment is made, do not exceed $10.0 million.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred 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 (i) an underwritten primary public
offering of common stock of the Company or Parent pursuant to an effective
registration statement under the Securities Act or (ii) any private placement of
common stock of the Company or Parent to any Person who is not a Permitted
Holder or any Affiliate thereof.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, 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;
25
(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 accrued interest thereon and fees and
expenses, including any premium and defeasance costs) under the
Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated in right
of payment to the Securities, such Refinancing Indebtedness is subordinated
in right of payment to the Securities at least to the same extent as the
Indebtedness being Refinanced;
PROVIDED FURTHER, HOWEVER, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company, (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary,
"Related Business" means any business in which the Company or its
Restricted Subsidiaries was engaged on the Issue Date and any business related,
ancillary or complementary to any business of the Company or its Restricted
Subsidiaries in which the Company or its Restricted Subsidiaries was engaged on
the Issue Date.
"Related Parties" means, with respect to any specified Person at any
specified time,
(1) if a natural person, (A) any spouse, parent or lineal
descendant (including by adoption) of such Person or (B) the
estate of such Person during any period in which such estate
holds Capital Stock of Parent or of the Company for the
benefit of any Person referred to in clause (1)(A) above and
(2) if a trust, corporation, partnership, limited liability
company or other entity, any other Person that controls such
Person at such time. For the purposes of this definition,
"control" when used with respect to any Person means the power
to direct the
26
management and policies of such Person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Representative" means, with respect to a Person, any trustee, agent
or representative (if any) for an issue of Senior Indebtedness of such Person
or, if the holders of any Senior indebtedness do not have a trustee, agent or
representative, the holders of a majority of outstanding principal amount of
such Senior Indebtedness.
"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 the Company or a Restricted Subsidiary, and other than
pro rata dividends or other distributions made by a Subsidiary that is not
a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)),
(2) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including in connection with
any merger or consolidation and including the exercise of any option to
exchange any Capital Stock (other than into Capital Stock of the Company
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
or Existing Contingent Notes of such Person (other than the purchase,
repurchase or other acquisition of Subordinated Obligations or Existing
Contingent Notes purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due
within
27
one year of the date of such purchase, repurchase or other acquisition), or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facility
contained in the Credit Agreement and any other facility or financing
arrangement that Refinances, in whole or in part, any such revolving credit
facility.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Company or a Restricted Subsidiary whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Initial Securities, the Exchange Securities,
the Private Exchange Securities and the Additional Securities issued under this
Indenture.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Senior Indebtedness" means, with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the Issue
Date or thereafter Incurred, and
(2) all other Obligations of such Person (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 Indebtedness described in
clause (1) above,
unless, in the case of clauses (1) and (2) above, in the instrument creating or
evidencing the same or pursuant to
28
which the same is outstanding, it is provided that such Indebtedness or other
obligations are subordinate or PARI PASSU in right of payment to the Securities
or the Subsidiary Guaranty of such Person, as the case may be; PROVIDED,
HOWEVER, that Senior Indebtedness shall not include:
(1) any obligation of such Person to the Company or any
Subsidiary;
(2) any liability for Federal, state, local or other taxes owed or
owing by such Person;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities);
(4) any Indebtedness or other obligation of such Person which is
subordinate or junior in any respect to any other Indebtedness or other
Obligation of such Person, including the Existing Contingent Notes; or
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture; PROVIDED, HOWEVER,
that such Indebtedness shall be deemed not to have been Incurred in
violation of this Indenture for purposes of this clause (5) if (x) the
Holders of such Indebtedness or their Representative or the Company shall
have furnished to the Trustee an opinion of nationally recognized
independent legal counsel addressed to the Trustee (which legal counsel
may, as to matters of fact, rely upon an Officers' Certificate) to the
effect that the Incurrence of such Indebtedness does not violate the
provisions of this Indenture or (y) such Indebtedness consists of
Indebtedness under the Credit Agreement and Holders of such Indebtedness or
their Representative (A) had no actual knowledge at the time of the
Incurrence that the Incurrence of such Indebtedness violated this Indenture
and (B) shall have received an Officers' Certificate to the effect that the
Incurrence of such Indebtedness does not violate provisions of this
Indenture.
"Senior Subordinated Indebtedness" means, with respect to a Person,
the Securities (in the case of the Company), the Subsidiary Guaranty (in the
case of a Subsidiary Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank PARI PASSU with the
Securities or such Subsidiary
29
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 the Company 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).
"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 Subsidiary Guaranty of such Person, as the case may be, pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership 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. With
respect to the Company, "Subsidiary" also shall include each Consolidated
Managed Subsidiary.
"Subsidiary Guarantor" means each Restricted Subsidiary of the Company
that executes this Indenture as a guarantor on the Issue Date and each other
Subsidiary of the Company that thereafter guarantees the Securities pursuant to
the terms of this Indenture, in each case until such Subsidiary is released from
its obligations under its Subsidiary Guaranty pursuant to the terms of this
Indenture.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Securities.
30
"Temporary Cash Investments" means any of the following:
(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 demand and time deposit accounts, certificates
of deposit and money market deposits maturing within 270 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, at the time of making of such investment, 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 180
days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-l" (or higher) according to Standard and Poor's Ratings
Group, Inc. and
(5) investments in securities with maturities of one year 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 at the time of the
making of such investment, rated at least "A" by Standard & Poor's Ratings
Group, Inc. or "A" by ▇▇▇▇▇'▇ Investors Service, Inc.
31
"Term Loan Facility" means the term loan facility contained in the
Credit Agreement and any other facility or financing arrangement that Refinances
in whole or in part any such term loan facility.
"Transactions" means the merger contemplated by the Agreement and Plan
of Merger dated as of December 8, 2002, among Parent, ▇▇▇ Acquisition Corp. and
AmeriPath, Inc. and each of the other transactions contemplated thereby, all as
more fully described in the Offering Circular.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Issue Date.
"Trustee" means U.S. Bank National Association, until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant 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) AmeriPath Indemnity;
(2) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board
of Directors of the Company in the manner provided below; and
(3) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; PROVIDED, HOWEVER, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.04.
32
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that immediately
after giving effect to such designation (A) the Company could Incur $1.00 of
additional Indebtedness under Section 4.03 (a) and (B) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors of the Company 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 the
Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
"Affiliate Transaction" ................ 4.07 (a)
"Appendix" ............................. 2.01
"Bankruptcy Law" .................... .. 6.01
"Blockage Notice" ...................... 10.03;
12.03
"Change of Control Offer" .............. 4.09 (b)
"covenant defeasance option" ........... 8.01 (b)
"CUSIP" ................................ 2.12
"Custodian" .............. ... ..... ... 6.01
"Event of Default" ..................... 6.01
"Exchange Securities: ..... ............ Appendix
"Initial Securities .................... Appendix
"ISIN" ................................. 2.12
33
"legal defeasance option" .............. 8.01 (b)
"Legal Holiday" ........................ 13.08
"Non-payment Default" .................. 10.03;
12.03
"Offer" ................................ 4.06 {b)
"Offer Amount" ......................... 4.06(c) (2)
"Offer Period" ......................... 4.06(c) (2)
"Paying Agent" ......................... 2.03
"Payment Blockage Period" .............. 10.03;
12.03
"Payment Default" ...................... 10.03;
12.03
"Private Exchange Securities" .......... Appendix
"Purchase Date" ........................ 4.06{c) (1)
"Registrar" ............................ 2.03
"Securities Obligations" ............... 11.01
"Successor Company" .................... 5. 01 (a) (1)
"Transfer Restricted Securities", ...... Appendix
SECTION 1.03. INCORPORATION BY REFERENCE OF TIA. 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
fol1owing meanings;
"Commission" means the SEC;
"indenture securities" means the Securities and the Subsidiary
Guaranties;
"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, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by reference in the TIA 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;
34
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate
or junior to secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) secured Indebtedness shall not be deemed to be subordinate or
junior to any other secured Indebtedness merely because it has a junior
priority with respect to the same collateral;
(8) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(9) 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
(10) 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
Securities are set forth in the Rule 144A/Regulation S Appendix attached hereto
(the "Appendix"), which is hereby incorporated in and expressly made part of
this Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
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
35
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 the Appendix and Exhibit A are part of
the terms of this Indenture.
SECTION 2.02. EXECUTION AND AUTHENTICATION. One Officer shall
sign the Securities for the Company by manual or facsimile signature.
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 shall authenticate and deliver Securities as set forth in
the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by the Trustee, a copy of which shall be
furnished to the Company. 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 co-registrar. The term "Paying Agent"
includes any additional paying agent.
36
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent 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 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 or Registrar.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; PROVIDED, HOWEVER,
that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Company and the Trustee.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. On or prior to
each due date of the principal of 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 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
37
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 all Securityholders and shall otherwise comply
with TIA ss. 312(a). 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 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(1) of the Uniform Commercial Code are met. When Securities are presented
to the Registrar 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.
To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's
request. The Company or the Registrar may require a Holder, among other things,
to pay a sum sufficient to pay all taxes, assessments or other governmental
charges in connection with any transfer or exchange pursuant to this Section.
The Company shall not be required to make and the Registrar need not register
transfers or exchanges of Securities selected for redemption (except, in the
case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Subsidiary Guarantors, the Trustee, the Paying Agent,
and the 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 (subject to paragraph 2 of the Securities) interest,
if any, on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of the Company, any Subsidiary Guarantor, the
Trustee, the Paying Agent, or the Registrar shall be affected by notice to the
contrary.
38
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.
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 and the 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 2.08 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.
SECTION 2.09. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company
39
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 numbers assigned by the Committee on Uniform Securities Identification
Procedures ("CUSIP") and corresponding International Securities Identification
Numbers ("ISIN") (if then generally in use) and, if so, the Trustee shall use
CUSIP numbers 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
not be affected by any defect in or omission of such numbers. The Company
40
shall promptly notify the Trustee of any change in the CUSIP or ISIN numbers.
SECTION 2.13. 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, any Additional
Securities and all Exchange Securities or Private Exchange 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 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 of such
Additional Securities; PROVIDED, HOWEVER, that no Additional Securities may
be issued at a price that would cause such Additional Securities to have
"original issue discount" within the meaning of Section 1273 of the Code;
and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Securities as set forth in
the Appendix to this Indenture 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 3.01 at least 45 days but not
41
more than 60 days before the redemption date unless the Trustee consents to a
shorter period. Such notice shall be accompanied by an Officers' Certificate
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
or cause to be mailed 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;
42
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms 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, 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 3.03.
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. On or prior to the
redemption date, the Company shall deposit with the Trustee or the Paying Agent
(or, if the Company or a Subsidiary is the Trustee or 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. The Trustee or the
Paying Agent will promptly return to the Company any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary to
pay the redemption price of and accrued interest on all Securities to be
redeemed.
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.
43
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay
or cause to be paid the principal of and interest on the Securities on the dates
and in the manner provided in the Securities and in this Indenture. Principal
and interest shall be considered paid on the date due if on such date the
Trustee or the Paying Agent 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. SEC REPORTS.
(a) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the SEC (to the extent the SEC will accept such filings) and, in
any event, shall provide the Trustee and Securityholders with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, at the times specified for the filings of such
information, documents and reports under such Sections; PROVIDED, HOWEVER, (x)
if the Company is exempt from the requirements of Section 13(a) or 15(d) of the
Exchange Act under Section 12h-5 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) or provide such
annual reports and such information, documents and other reports to the Trustee
and the Securityholders so long as (i) Parent files such annual reports and such
information, documents and other reports with the SEC, (ii) Parent, the Company
and each Subsidiary Guarantor are in compliance with the requirements set forth
in Rule 3-10 of Regulation S-X under the Exchange Act and (iii) the Company
provides the Trustee and Securityholders with such annual reports and such
information, documents and other reports and (y) if the Issue Date occurs prior
to March 31, 2003, the Company shall not be required to prepare, file
44
with the SEC or provide the Trustee or securityholders a Form 10-K for the year
ended December 31, 2002.
(b) At any time that any of the Company's Subsidiaries are
Unrestricted Subsidiaries, the quarterly and annual financial information
required by Section 4.02(a) shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(c) The Company shall furnish to the Holders of the Securities and to
prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long any Securities are not freely transferable under the Securities Act.
(d) The Company shall comply with the other provisions of
TIA Section 314(a).
SECTION 4.03. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness; PROVIDED,
HOWEVER, that the Company and its Restricted Subsidiaries shall be entitled to
Incur Indebtedness if, on the date of such Incurrence and after giving effect
thereto on a PRO FORMA basis, no Default has occurred and is continuing and the
Consolidated Coverage Ratio exceeds (i) 2.00 to 1,00, if such Incurrence occurs
on or prior to March 31, 2005, or (ii) 2.25 to 1.00, if such Incurrence occurs
after such date.
(b) Notwithstanding Section 4.03(a), the Company and the Restricted
Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness incurred by the Company and the Restricted
Subsidiaries pursuant to any Revolving Credit Facility; PROVIDED, HOWEVER,
that, immediately after giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this Section 4.03
(b)(1) and then outstanding does not exceed the greater of (A) $65.0
million less the sum of all principal payments with respect to such
Indebtedness pursuant to Section 4.06(a)(3)(A) that are
45
accompanied by corresponding permanent commitment reductions and (B) 85% of
the book value of the accounts receivable of the Company and its Restricted
Subsidiaries;
(2) Indebtedness Incurred by the Company and its Restricted
Subsidiaries pursuant to any Term Loan Facility; PROVIDED, HOWEVER, that,
after giving effect to any such Incurrence, the aggregate principal amount
of all Indebtedness Incurred under this Section 4.03(b)(2) and then
outstanding does not exceed $225.0 million less the aggregate sum of all
principal payments actually made from time to time after the Issue Date
with respect to such Indebtedness (other than principal payments made from
any permitted Refinancings thereof);
(3) Indebtedness owed to and held by the Company or a Wholly Owned
Subsidiary; PROVIDED, HOWEVER, that (A) any subsequent issuance or transfer
of any Capital Stock that results in any such Wholly Owned Subsidiary
ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or a Wholly Owned Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such Indebtedness
by the obligor thereon, (B) if the Company 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
and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash
of all obligations of such obligor with respect to its Subsidiary Guaranty;
(4) the Securities (other than any Additional Securities);
(5) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) , (3) or (4) of this Section
4.03(b));
(6) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Subsidiary was acquired by the
Company or another Restricted Subsidiary (other than Indebtedness Incurred
in connection with, 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 Subsidiary became a Subsidiary or was
acquired by the Company); PROVIDED,
46
HOWEVER, that on the date of such acquisition after giving PRO FORMA effect
thereto, the Consolidated Coverage Ratio exceeds 2.00 to 1.00;
(7) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (4), (5) or (6) of this
Section 4.03 (b) or this Section 4.03 (b)(7);
(8) Hedging Obligations consisting of Interest Rate Agreements
directly related to Indebtedness permitted to be Incurred by the Company
and its Restricted Subsidiaries pursuant to this Indenture and Hedging
Obligations consisting of Currency Agreements directly related to foreign
exchange exposure of the Company and its Restricted Subsidiaries;
(9) obligations in respect of performance, bid and surety bonds and
completion guarantees and repayment obligations in connection with
self-insurance requirements, or judgment, appeal, surety, performance or
other like bonds, provided by the Company or any Restricted Subsidiary in
the ordinary course of business;
(10) 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 five Business Days of its
Incurrence;
(11) Indebtedness consisting of the Subsidiary Guaranty of a
Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor or the
Company of Indebtedness Incurred pursuant to Section 4.03(a) or pursuant to
Clause (1), (2), (3), (4) or (5) of this Section 4.03 (b) or pursuant to
clause (7) of this Section 4.03(b) to the extent the Refinancing
Indebtedness Incurred thereunder directly or indirectly Refinances
Indebtedness Incurred pursuant to Section 4.03(a) or pursuant to clause (4)
or (5) of this Section 4.03(b);
(12) Indebtedness (including Capital Lease Obligations) Incurred by
the Company or any of its Restricted Subsidiaries to finance the purchase,
lease, construction or improvement of property (real or personal) or
equipment (whether through the direct purchase of assets or the Capital
Stock of any Person owning such assets) at the time of, or within 180 days
47
after, such purchase, lease or improvement in an aggregate principal amount
which, when added together with the amount of Indebtedness previously
incurred pursuant to this Section 4.03(b)(12) and then outstanding
(including any Refinancing Indebtedness with respect thereto) does not
exceed $5.0 million;
(13) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Subsidiary, other than Guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary; PROVIDED, HOWEVER, that the maximum
aggregate liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds actually received by the Company or the
Restricted Subsidiary in connection with such disposition; and
(14) Indebtedness of the Company or of any of its Restricted
Subsidiaries in an aggregate principal amount at any one time outstanding
which, when taken together with all other Indebtedness of the Company and
its Restricted Subsidiaries outstanding on the date of such Incurrence
(other than indebtedness permitted by clauses (1) through (13) of this
Section 4.03(b) or Section 4.03 (a)) does not exceed $25.0 million.
(c) Notwithstanding the foregoing, neither the Company nor any
Subsidiary Guarantor shall 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 Subsidiary Guarantor unless such
Indebtedness shall be subordinated to the Securities or the applicable
Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.03:
(1) any Bank Indebtedness Incurred on the Issue Date shall be deemed
to have been Incurred under Section 4.03(b) (1) and (b) (2) ;
(2) in the event that an item of Indebtedness (or any portion
thereof) meets the criteria of more than one of the types of Indebtedness
described in Section 4.03(a) or (b), the Company, in its sole discretion,
shall classify such item of Indebtedness
48
(or any portion thereof) at the time of Incurrence and shall only be
required to include the amount and type of such Indebtedness in Section
4.03(a) or one of the clauses in Section 4.03 (b);
(3) the Company shall be entitled to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness described in
Section 4.03(a) or (b); and
(4) other than indebtedness classified pursuant to Section 4.03(d)
(1), following the date of its Incurrence, any Indebtedness originally
classified as Incurred pursuant to one of the clauses in Section 4.03(b)
may later be reclassified by the Company such that it will be deemed as
having been Incurred pursuant to another clause in Section 4.03(b) above,
as applicable, to the extent that such reclassified Indebtedness could be
Incurred pursuant to such new paragraph or clause at the time of such
reclassification.
(e) Notwithstanding Sections 4.03(a) and (b), neither the Company
nor any Subsidiary Guarantor shall Incur (1) any Indebtedness if such
Indebtedness is subordinate or junior in any respect to any Senior
Indebtedness of the Company or such Subsidiary Guarantor, as applicable,
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness of the
Company or such Subsidiary Guarantor, as applicable, or (2) any Secured
Indebtedness that is not Senior Indebtedness of such Person unless
contemporaneously therewith such Person makes effective provision to secure
the Securities or the relevant Subsidiary Guaranty, as applicable, equally
and ratably with such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien; PROVIDED, HOWEVER, that the Existing
Contingent Notes will not be secured by any assets of Parent, the Company or
any Subsidiary of the Company at any time, except for Liens securing the
Existing Contingent Notes that arise by operation of law.
(f) Notwithstanding Sections 4.03(a) and (b), a Consolidated
Managed Subsidiary will not Incur any Indebtedness (other than Indebtedness
owed to the Company or any Subsidiary Guarantor) unless such Consolidated
Managed Subsidiary is a Subsidiary Guarantor at the time of such Incurrence.
49
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company 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); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the issue Date would exceed the sum of (without
duplication):
(A) 50% of the Consolidated Net Income 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 prior
to the date of such Restricted Payment for which internal financial
statements are then available, 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 and Fair Market
Value of property or assets (other than Indebtedness) received by the
Company 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 the Company and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit
of their employees) and 100% of any cash capital contribution received
by the Company from its shareholders subsequent to the Issue Date, in
each case other than any such Net Cash Proceeds or cash capital
contributions that are attributable to releases of cash from the
Contingent Note Reserve to pay for principal, interest and other
obligations relating to the Existing Contingent Notes; PLUS
50
(C) the amount by which Indebtedness of the Company is reduced
on the Company's balance sheet upon the conversion or exchange
subsequent to the Issue Date of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash, or the fair value
of any other property, distributed by the Company upon such conversion
or exchange); PROVIDED,. HOWEVER, that the foregoing amount shall
not exceed the Net Cash Proceeds received by the Company or any
Restricted Subsidiary from the sale of such Indebtedness (excluding
Net Cash Proceeds from sales to a Subsidiary of the Company or to an
employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees); PLUS
(D) an amount equal to the sum of (x) the net reduction in the
Investments (other than Permitted Investments) made by the Company 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 and distributions to the extent
included in Consolidated Net Income), in each case received by the
Company or any Restricted Subsidiary, and (y) to the extent such
Person is an Unrestricted Subsidiary, the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets of such 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 the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.04 (a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock of
the Company
51
(other than Disqualified Stock and other than Capital Stock issued or sold
to a Subsidiary of the Company or an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries for the benefit
of their employees) or a substantially concurrent cash capital contribution
received by the Company from its shareholders; provided, HOWEVER, that (A)
such Restricted Payment shall be excluded in the calculation of the amount
of Restricted Payments and (B) the Net Cash Proceeds from such sale or such
cash capital contribution (to the extent so used for such Restricted
Payment) shall be excluded from the calculation of amounts under Section
4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or any Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations
of such Person which is permitted to be Incurred pursuant to Section 4.03;
PROVIDED, HOWEVER, that such purchase, repurchase, redemption, defeasance
or other acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section 4,04; PROVIDED, HOWEVER, that at the time of payment of
such dividend, no other Default shall have occurred and be continuing (or
result therefrom); PROVIDED FURTHER, HOWEVER, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of Parent or any
of its Subsidiaries (or dividends made to Parent to consummate any such
repurchase or other acquisition of Capital Stock) 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 Parent Board 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 repurchases
52
and other acquisitions in any calendar year shall not exceed the lesser of
(A) the sum of (x) $500,000 and (y) the aggregate amount of Restricted
Payments permitted (but not made) in prior calendar years pursuant to this
Section 4.04(b)(4) and (B) $2.5 million; PROVIDED FURTHER, HOWEVER, that
such repurchases and other acquisitions shall be excluded in the
calculation of the amount of Restricted Payments;
(5) dividends to Parent to be used by Parent solely to pay its
franchise taxes and other fees required to maintain its corporate existence
and to pay for general corporate and overhead expenses (including salaries
and other compensation of employees) incurred by Parent in the ordinary
course of its business; PROVIDED, HOWEVER, that such dividends shall not
exceed $250,000 in any calendar year; PROVIDED FURTHER, HOWEVER, that such
dividends shall be excluded in the calculation of the amount of Restricted
Payments;
(6) dividends, distributions or advances to Parent to be used by
Parent to pay Federal, state and local taxes payable by Parent and directly
attributable to (or arising as a result of) the operations of the Company
and the Restricted Subsidiaries; PROVIDED, HOWEVER, that (A) the amount of
such dividends shall not exceed the amount that the Company and its
Restricted Subsidiaries would be required to pay in respect of such
Federal, state or local taxes were the Company to pay such taxes as a
stand-alone taxpayer and (B) such dividends pursuant to this Section
4.04(b)(6) are used by Parent for such purposes within 10 days of the
receipt of such dividends; PROVIDED FURTHER, HOWEVER, that such dividends
shall be excluded in the calculation of the amount of Restricted Payments;
(7) upon the occurrence of a Change of Control and within 60 days
after the completion of the offer to repurchase the Securities pursuant to
Section 4.09 (including the purchase of all Securities tendered), any
purchase or redemption of Subordinated Obligations of the Company required
pursuant to the terms thereof as a result of such Change of Control at a
purchase or redemption price not to exceed 101% of the outstanding
principal amount thereof, plus accrued and unpaid interest thereon, if any;
PROVIDED, HOWEVER, that (A) at the time of such purchase or redemption, no
Default shall have occurred and be continuing (or would result therefrom),
(B) the Company would be able to Incur an additional $1.00 of Indebtedness
pursuant to Section 4.03(a) after giving pro forma effect to such
53
Restricted Payment, (C) such purchase or redemption shall not be made,
directly or indirectly, from the proceeds of (or made in anticipation of)
any Issuance of Indebtedness by the Company or any Subsidiary and (D) such
purchase or redemption shall be included in the calculation of the amount
of Restricted Payments;
(8) payments to former stockholders of AmeriPath, Inc. in connection
with the exercise of appraisal rights arising as a result of the
Transactions under applicable law; PROVIDED, HOWEVER, that any such
Restricted Payment shall be excluded in the calculation of the amount of
Restricted Payments; and
(9) Restricted Payments in an amount which, when taken together with
all Restricted Payments made pursuant to this Section 4.04(b)(9), does not
exceed $10.0 million; PROVIDED, HOWEVER, that at the time of each such
Restricted Payment, no Default shall have occurred and be continuing (or
result therefrom) and such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company 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 the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c),
(A) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(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 the Company
(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
54
Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date;
(C) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in Section 4.05(1) (A) or 4.05(1) (B) or this
Section 4.05(1) (C) or contained in any amendment to an agreement
referred to in Section 4.05(1) (A) or 4.05(1) (B) or this Section
4.05(1) (C); PROVIDED, HOWEVER, that the encumbrances and
restrictions, taken as a whole, 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) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all or substantially all the Capital
stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition;
(E) any restriction arising under applicable law, regulation
or order;
(F) any encumbrance or restriction contained in the terms of
any Indebtedness of the Company or any Restricted Subsidiary not
Incurred in violation of this Indenture; PROVIDED, HOWEVER, that such
encumbrances or restrictions, taken as a whole, are no more
restrictive in the aggregate than those contained in this Indenture,
as determined in good faith by the Company's Board of Directors, whose
determination shall be conclusive;
(G) any encumbrance or restriction contained in any agreement
or instrument governing Senior Indebtedness (including the Credit
Agreement) not Incurred in violation of this Indenture; PROVIDED,
HOWEVER, that such encumbrances or restrictions, taken as a whole, are
no more restrictive in the aggregate than those contained in the
Credit Agreement, as determined in good faith by the
55
Company's Board of Directors, whose determination shall be conclusive;
and
(H) any encumbrance or restriction imposed on any Consolidated
Managed Subsidiary by (and for the benefit of) the Company or any
Subsidiary Guarantor; and
(2) with respect to clause (c) only,
(A) any encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests or
contracts to the extent such provisions restrict the transfer of the
lease or the property leased thereunder or the contract;
(B) any encumbrance or restriction contained in security
agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the
transfer of the property subject to such Security agreements or
mortgages; and
(C) any encumbrance or restriction with respect to assets of a
Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of such assets.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition
unless:
(1) the Company 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) of the
shares and assets subject to such Asset Disposition;
(2) at least 75% of the consideration thereof received by the Company
or such Restricted Subsidiary is in the form of cash or cash equivalents;
and
(3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary, as
the case may be)
56
(A) FIRST, to the extent the Company elects (or is required by
the terms of any Indebtedness), to prepay, repay, redeem or purchase
Senior Indebtedness of the Company or a Subsidiary Guarantor or
Indebtedness (other than any Disqualified Stock) of a Wholly Owned
Subsidiary (in each case other than Indebtedness owed to the Company
or an Affiliate of the Company) within one year from the later of the
date of such Asset Disposition or the receipt of such Net Available
Cash;
(B) SECOND, to the extent of the balance of such Net Available
Cash after application in accordance with Section 4.06(a)(3)(A), to
the extent the Company elects, to acquire (or enter into a binding
agreement to acquire, so long as such acquisition shall be consummated
within 90 days after the end of the one-year period referred to below)
Additional Assets within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash; and
(C) THIRD, to the extent of the balance of such Net Available
Cash after application in accordance with Section 4.06(a)(3)(A) and
Section 4.06(a)(3) (B), to make an Offer to the holders of the
Securities (and to holders of other Senior Subordinated Indebtedness
of the Company or a Subsidiary Guarantor designated by the Company) to
purchase Securities (and such other Senior Subordinated Indebtedness
of the Company or a Subsidiary Guarantor) pursuant to and subject to
the conditions of Section 4.06(b);
PROVIDED, HOWEVER, that in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to Section 4.06(a)(3)(A) or
Section 4.06(a)(3)(C), the Company 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.
Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section 4.06(a) except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which is not
applied in accordance with this
57
Section 4.06(a) exceeds $10.0 million. Pending application of Net Available Cash
pursuant to this Section 4.06(a), such Net Available Cash shall be invested in
Temporary Cash Investments or applied to temporarily reduce revolving credit
indebtedness.
For the purposes of this Section 4.06(a), the following are deemed to
be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company (other than
obligations in respect of Disqualified Stock of the Company) or any
Restricted Subsidiary (other than obligations in respect of Disqualified
Stock or Preferred Stock of a Subsidiary Guarantor) and the release of the
Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition; and
(2) securities received by the Company or any Restricted Subsidiary
from the transferee that are converted by the Company or such Restricted
Subsidiary into cash within 90 days, to the extent of cash received in that
conversion.
(b) In the event of an Asset Disposition that requires the purchase
of Securities (and other Senior Subordinated Indebtedness of the Company or a
Subsidiary Guarantor) pursuant to Section 4.06(a)(3)(C), the Company shall
purchase Securities tendered pursuant to an offer by the Company for the
Securities (and such other Senior Subordinated Indebtedness of the Company or a
Subsidiary Guarantor) (the "Offer") at a purchase price of 100% of their
principal amount (or, if other than the Securities, 100% of their principal
amount or, in the event such other Senior Subordinated Indebtedness of the
Company or a Subsidiary Guarantor 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 or a Subsidiary Guarantor, such lesser price, if any, as may be
provided for by the terms of such Senior Subordinated Indebtedness) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in Section 4.06(c). If the aggregate purchase price
of Securities (and any other Senior Subordinated Indebtedness) tendered pursuant
to the Offer exceeds the Net Available Cash allotted to their purchase, the
Company shall select the Securities and other Senior Subordinated Indebtedness
to be purchased on a pro rata basis but in round denominations, which in the
case of the Securities will be denominations of $1,000 principal amount or
multiples thereof. The Company
58
shall not be required to make an Offer to purchase Securities (and other Senior
Subordinated Indebtedness of the Company or a Subsidiary Guarantor) pursuant to
this Section 4.06 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 an Offer
pursuant to Section 4.06, Net Available Cash will be deemed to be reduced by the
aggregate amount of such offer.
(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 his Securities purchased by the
Company either in whole or in part (subject to prorating as described in
Section 4.06(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 and all instructions and materials necessary to tender Securities
pursuant to the Offer, together with the information contained in Section
4.06(c)(3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to
the Trustee an Officers' Certificate as to (A) the amount of the Offer (the
"Offer Amount"), including information as to any other Senior Subordinated
Indebtedness included in the Offer, (B) the allocation of the Net Available
Cash from the Asset Dispositions pursuant to which such Offer is being made
and (C) the compliance of such allocation with the provisions of Section
4.06(a) and (b). On such date, the Company shall also irrevocably deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust) 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 Offer Amount to be held for payment in accordance with
the provisions of this Section 4.06.
59
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 reasonably 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 4.06.
(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.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by
the Company pursuant to and in accordance with the terms of this Section
4.06. A Security shall be deemed to have been accepted for purchase at the
time the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(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
60
this Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.07. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Company 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 the Company (an "Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less favorable to
the Company or such Restricted Subsidiary than those that could 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 the Company
disinterested with respect to such Affiliate Transaction have determined in
good faith that the criteria set forth in Section 4.07(a)(1) are satisfied
and have approved the relevant Affiliate Transaction as evidenced by a
resolution of such Board of Directors; and
(3) if such Affiliate Transaction involves an amount in excess of
$15.0 million, the Board of Directors of the Company 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 the Company and its Restricted Subsidiaries or is not less
favorable to the Company and its Restricted Subsidiaries 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. For purposes of this
clause (3) only, any contract or series of related contracts for the
rendering of services entered into in the ordinary course of business by
the Company or any Restricted Subsidiary with any other Person will not be
deemed to
61
be in excess of $15.0 million if, when entered into, (x) the payments made
by the Company and the Restricted Subsidiaries and (y) the value of
services performed by the Company and the Restricted Subsidiaries in
connection with such contract or series of related contracts do not exceed,
and are not then reasonably expected by the Board of Directors of the
Company in its good faith judgment to exceed, $15.0 million in any year.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Investment (other than a Permitted Investment) or other
Restricted Payment (or any transaction that would constitute a Restricted
Payment but for the exclusions from the definition thereof (other than
Permitted Investments)), in each case permitted to be made pursuant to
Section 4.04;
(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 of the Company;
(3) loans or advances to employees in the ordinary course of business
in accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed $2.5 million in the aggregate
outstanding at any one time;
(4) transactions and agreements between or among the Company and the
Restricted Subsidiaries;
(5) the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or its
Restricted Subsidiaries, and compensation and employee benefit arrangements
paid to, and indemnity provided for the benefit of, directors, officers, or
employees of the Company and its Restricted Subsidiaries in the ordinary
course of business;
(6) any transaction with a Restricted Subsidiary or joint venture or
similar entity which would constitute an Affiliate Transaction solely
because the Company or a Restricted Subsidiary owns an equity interest in
or otherwise controls such Restricted Subsidiary, joint venture or similar
entity;
62
(7) transactions or agreements between the Company and its Restricted
Subsidiaries, on the one hand, and any Managed Entity that is not a
Consolidated Managed Subsidiary, on the other hand; PROVIDED, HOWEVER, that
any such transactions or agreements are no less favorable, in the
aggregate, to the Company than arrangements in place as of the Issue Date;
(8) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company; and
(9) any transaction or agreement described in the Offering Circular
under "Certain Relationships and Related Transactions" and any amendment or
renewal thereof on terms no less favorable in the aggregate to the Company
and its Subsidiaries.
SECTION 4.08. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company
(a) shall not, and shall not permit any Restricted Subsidiary to,
sell, lease, transfer or otherwise dispose of any Capital Stock of any
Restricted Subsidiary to any Person (other than (x) the Company or a Wholly
Owned Subsidiary and (y) in the case of a Consolidated Managed Subsidiary,
another nominee shareholder (PROVIDED that such Consolidated Managed
Subsidiary does not cease to be a Consolidated Managed Subsidiary as a
result of such disposition)) and
(b) shall not permit any Restricted Subsidiary to issue any of its
Capital Stock (other than, if necessary, shares of its Capital Stock
constituting directors' or other legally required qualifying shares) to any
Person (other than to the Company or a Wholly Owned Subsidiary),
unless, in the case of either Section 4.08(a) or (b):
(i) immediately after giving effect to such issuance, sale or
other disposition, neither the Company nor any of its Subsidiaries own any
Capital Stock of such Restricted Subsidiary or
(ii) immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after
giving effect thereto is treated as a new Investment by the Company and
such Investment would be permitted to be made under Section 4.04 if made on
the date of such issuance, sale or other disposition.
63
SECTION 4.09. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company repurchase 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 due on the relevant interest payment date), in accordance
with the terms contemplated in Section 4.09(b). In the event that at the time of
such Change of Control the terms of any Senior Indebtedness of the Company
restrict or prohibit the purchase of Securities pursuant to this Section 4.09,
then prior to the mailing of the notice to Holders provided for in Section
4.09(b) below but in any event within 30 days following any Change of Control,
the Company shall (1) repay in full all such Senior Indebtedness or (2) obtain
the requisite consents under the agreements governing all such Senior
Indebtedness to permit the repurchase of the Securities as provided for in
Section 4.09(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 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 circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization, in each case after giving effect to such
Change of Control);
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company, consistent with
this Section 4.09, that a Holder must follow in order to have its
Securities purchased.
64
(c) 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 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 his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section 4.09 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 4.09,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in Section 4.09(b) and purchases all Securities validly tendered and not
withdrawn under such 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 repurchase of Securities pursuant to this
Section 4.09. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.09, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.09 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.10. LIMITATION ON LINE OF BUSINESS AND OPERATIONS. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, to engage in
any business other than a Related Business.
(b) The Company shall not permit any Consolidated Managed Subsidiary
that is not a Subsidiary Guarantor to engage in any activities, hold any assets
or conduct any business that is not directly related to the performance of
65
anatomic pathology services in the geographic territory in which such
Consolidated Managed Subsidiary operates.
SECTION 4.11. FUTURE GUARANTORS. The Company shall cause each future
Foreign Restricted Subsidiary that Guarantees any other Indebtedness of the
Company and each future Domestic Restricted Subsidiary that Incurs any
Indebtedness (other than in the case of any Consolidated Managed Subsidiary,
Indebtedness owed to the Company or any Subsidiary Guarantor) to, at the same
time, execute and deliver to the Trustee a Guaranty Agreement pursuant to which
such Restricted Subsidiary shall Guarantee payment of the Securities on the same
terms and conditions as those set forth in this Indenture.
SECTION 4.12. CONTINGENT NOTE COLLATERAL ACCOUNT CONTRIBUTION. The
Company and Parent shall comply with the provisions set forth in Section 9.17(a)
of the Credit Agreement, as in effect on the Issue Date, requiring Parent to
make additional common equity contributions to the Company in connection with
obligations of the Company and its Subsidiaries under the Existing Contingent
Notes. Except as provided in Section 9.17(b) of the Credit Agreement, as in
effect on the issue Date, Parent shall not make any Restricted Payment with the
proceeds from the Contingent Note Reserve or any other cash collateral account
relating to the Existing Contingent Notes until all Obligations under each
Existing Contingent Note have been satisfied in full.
SECTION 4.13. 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 4.14. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
66
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS.
(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 its assets 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 as a result of 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); and
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
PROVIDED, HOWEVER, that clause (3) shall not be applicable to (A) the Company or
a Restricted Subsidiary consolidating with, merging into, conveying,
transferring or leasing all or part of its properties and assets to the Company
or a Subsidiary Guarantor or (B) the Company or a Restricted Subsidiary merging
with an Affiliate of the Company solely for the purpose and with the sole effect
of reincorporating
67
the Company or a Restricted Subsidiary in another jurisdiction.
For purposes of this Section 5.01(a), the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company (other than to
the Company or any Wholly Owned Subsidiary), which properties and assets, if
held by the Company instead of such Subsidiaries, would constitute all or
substantially all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
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) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:
(1) except in the case of a Subsidiary Guarantor that has been
disposed of in its entirety to another Person (other than to the Company or
a Subsidiary of the Company), 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 its obligations under Section 4.06 in respect of
such disposition, the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws of
the jurisdiction under which such Subsidiary was organized or under the
laws of the United States of America, or any State thereof or the District
of Columbia, and such Person shall expressly assume, by a Guaranty
Agreement, in a form satisfactory to the Trustee, all the obligations of
such Subsidiary, if any, under its Subsidiary Guaranty;
(2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation
68
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 or
transfer and such Guaranty Agreement, if any, complies with this Indenture;
PROVIDED, HOWEVER, that this Section 5.01(b) shall not be applicable to any
Subsidiary Guarantor that consolidates with, merges with or into or conveys,
transfers or leases all or substantially all of its assets to the Company or
another Subsidiary Guarantor.
(c) Pursuant to this Indenture, so long as the Existing Contingent
Notes have not been satisfied in full and cash remains in the Contingent Note
Reserve, Parent agrees not to merge with or into, or convey, transfer or lease,
in one transaction or a series of transactions, all or substantially all of its
assets to any Person unless:
(1) the resulting, surviving or transferee Person (if not Parent)
shall be a Person organized and existing under the laws of the jurisdiction
under which Parent was organized or under the laws of the United States of
America, or any State thereof or the District of Columbia, and such Person
shall expressly assume all the obligations of Parent, if any, under this
Indenture;
(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 or
transfer and such assumption agreement, if any, complies with this
Indenture.
69
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(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 a period of 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 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 purchase shall be prohibited by Article 10;
(3) the Company or Parent fails to comply with its obligations
pursuant to Section 5.01;
(4) the Company or Parent fails to comply with Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 or 4.12 (other than a failure to
purchase Securities validly tendered when required under Section 4.06 or
4.09) and such failure continues for 30 days after the notice specified
below;
(5) the Company or any Subsidiary Guarantor fails to comply with any
of its agreements in the Securities or this Indenture (other than those
referred to in clause (1), (2), (3) or (4) above) and such failure
continues for 60 days after the notice specified below;
(6) Indebtedness of Parent (so long as the Existing Contingent Notes
have not been satisfied in full and cash remains in the Contingent Note
Reserve), the Company, any Subsidiary 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;
(7) Parent (so long as the Existing Contingent Notes have not been
satisfied in full and cash remains
70
in the Contingent Note Reserve), the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against Parent (so long as the Existing
Contingent Notes have not been satisfied in full and cash remains in
the Contingent Note Reserve), the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of Parent (so long as the Existing
Contingent Notes have not been satisfied in full and cash remains in
the Contingent Note Reserve), the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of Parent (so long as
the Existing Contingent Notes have not been satisfied in full and cash
remains in the Contingent Note Reserve), the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$10.0 million is entered against Parent (so long as the Existing Contingent
Notes have not been satisfied in full and cash remains in the Contingent
Note Reserve), the Company or any Significant Subsidiary, remains
outstanding for a
71
period of 60 consecutive days following the entry of such judgment or
decree and is not discharged, waived or the execution thereof stayed; or
(10) any Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty or, in
the case of a Subsidiary Guarantor that is not a Significant Subsidiary,
other than as a result of bankruptcy) or any Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guaranty, as the case may
be.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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) or (5) 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".
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 Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4) or (5) its status 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(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on
72
all the Securities to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately, PROVIDED that if
any Designated Senior Indebtedness is outstanding at such time, neither the
Company nor any Subsidiary Guarantor shall make any payment with respect to the
Securities until five Business Days after the Representatives of all the issues
of Designated Senior Indebtedness receive written notice of such acceleration
and, thereafter, any such payment shall be made only if the provisions of
Article 10 and 12 do not restrict payment at such time. If an Event of Default
specified in Section 6.01(7) or (8) with respect to the Company occurs, 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 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.
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
73
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 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
from such Holders 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 unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the
request during 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.
74
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 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 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 the
Subsidiary Guarantors, 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
75
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. 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
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 6.11 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 (to the
extent it may lawfully do so) 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 (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
76
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(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.
77
(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 7.01 and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE.
(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, without limiting the effect of Section 7.01(b),
the Trustee's conduct does not constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 4.01,
78
6.01(1) or 6.02(2) or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actually knowledge.
(g) Delivery of reports, information and documents to the Trustee
under Section 4.02 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
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 or Registrar 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, warranty or certification as to the
validity or adequacy of this Indenture or the Securities except as contained in
the Trustee's certificate of authentication. The Trustee shall not be
accountable for the Company's use of the proceeds from the issuance and sale of
the Securities and shall not be responsible for any statement of the Company,
any initial purchaser or placement agent or any other Person made in connection
with the issuance and sale of the Securities, whether oral or written and
whether contained in this Indenture, any offering document or any other
document, certificate or instrument.
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,
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in 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 for so long as
the Securities are outstanding, the Trustee shall mail to each
79
Securityholder a brief report dated as of May 15 that complies with TIA Section
313(a). The Trustee also shall comply with TIA $ 313(b). The Trustee will also
transmit by mail all reports required by TIA $ 313(c).
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 in accordance with TIA Section 313(d). The Company agrees
to notify promptly the Trustee whenever the Securities become listed on any
stock exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee from time to time such reasonable compensation as agreed to between
the Company and the Trustee for its acceptance of the responsibilities under
this Indenture. 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 disbursements, advancements and expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services except any such expense as may arise from its
negligence, willful misconduct or bad faith. 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 reasonable
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder. 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 and the Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel; PROVIDED, HOWEVER, the Company should not be required to pay
such fees and expenses if it assumes the Trustee's defense, and, in the
Trustee's reasonable judgment, there is no conflict of interest between the
Company and the Trustee in connection with such defense. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld or delayed, nor reimburse any expense nor indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by
80
the Trustee other than money or property held in trust to pay principal of and
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the resignation and removal of the Trustee and the discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(7) or (8) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
The Trustee will comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
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 shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to any Bankruptcy Law;
(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 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
81
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 7.08, 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.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310 (b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in
82
other securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (l) 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 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), 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.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the operation of
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Parent, Subsidiary Guarantors and
Significant Subsidiaries) and the limitations contained in Sections 5.01(a)(3)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
83
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(4), 6.01(6), 6.01(7), 6,01(8) and 6.01(9) (but, in the case of
Sections 6.01 (7) and (8), with respect only to Parent, Subsidiary Guarantors
and Significant Subsidiaries) or because of the failure of the Company to comply
with Section 5.01(a)(3). If the Company exercises its legal defeasance option or
its covenant defeasance option, each Subsidiary Guarantor, if any, shall be
released from all its obligations with respect to its Subsidiary Guaranty
simultaneously with the exercise of either such option.
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:
(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
84
Sections 6.01(7) or (8) 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 or 12;
(5) 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;
(6) 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
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
(7) 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 (and in
accordance with the provisions of) 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.
85
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 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. Parent, the Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder:
(l) to cure any ambiguity, omission, defect or inconsistency;
86
(2) to comply with Article 5;
(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
Subsidiary Guaranties, or to secure the Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company, Parent or a Subsidiary Guarantor;
(6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(7) to make any change that does not adversely affect the rights of
any Securityholder.
An amendment under this Section 9.01 may not make any change that
adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or a Subsidiary Guarantor then outstanding unless
the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.01 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 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company, the Subsidiary
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:
87
(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) change the provisions applicable to the redemption of any
Security contained in Article 3 or paragraphs 5 or 6 of the Securities;
(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 Holder'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 Holder's Securities;
(7) make any changes in the ranking or priority of any Security that
would adversely affect the Securityholders;
(8) make any change in Section 6.04 or 6.07 or the second sentence of
this Section 9.02; or
(9) make any change in, or release other than in accordance with
Section 11.06 or 8.01(b), any Subsidiary Guaranty that would adversely
affect the Securityholders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 may not make any change that
adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or of a Subsidiary Guarantor then outstanding unless
the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.02 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
88
therein, shall not impair or affect the validity of an amendment under this
Section 9.02.
SECTION 9.03. COMPLIANCE WITH TIA. Every amendment to this Indenture
or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives 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
or waiver 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
89
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 protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
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 to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness and other
Obligations 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 Obligations with respect to Senior Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter incurred) 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 that 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 10.12.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of the Company of any kind or character, whether
in cash, property or securities, to creditors upon any total or partial
liquidation or any total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership, winding-up, assignment for
the benefit of
90
creditors, marshalling of assets or similar proceeding relating to the Company
or its property, whether voluntary or involuntary:
(1) the holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash of all Obligations with respect
to all such Senior Indebtedness before Securityholders shall be entitled to
receive any payment or distribution of any kind or character with respect
to the Securities or for the acquisition of any Securities for cash,
property or otherwise; and
(2) until all 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 shares
of stock and any debt securities that are subordinated to such Senior
Indebtedness to at least the same extent as the Securities.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OF THE COMPANY The
Company shall not pay (in cash, property, securities or other assets), the
principal of, interest on or other Obligations owing with respect to the
Securities or make any deposit pursuant to Section 8.01 or 8.02 and may not
purchase, redeem or otherwise retire or acquire any Securities (collectively,
"pay the Securities") if either of the following (a "Payment Default") occurs
(1) any Obligations with respect to Senior Indebtedness of the Company are not
paid in full in cash when due or (2) any other default on Senior Indebtedness of
the Company occurs and the maturity of such 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 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 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 immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace
91
periods, the Company shall not pay the Securities for a period (a "Payment
Blockage Period") commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a "Blockage Notice") of such default from the
Representative of 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 immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section 10.03), unless the holders of such Designated Senior Indebtedness giving
such Blockage Notice or the Representatives of such Designated Senior
Indebtedness shall have accelerated the maturity of the 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 given 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.
For purposes of this Section 10.03, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness of the
Company initiating such Payment Blockage Period shall be, or be
92
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify in writing the holders of the Designated Senior
Indebtedness of the Company (or their Representatives) of the acceleration
(although the failure to give any such notice shall not affect the
subordinations of this Article 10). If any Designated Senior Indebtedness of the
Company is outstanding, neither the Company nor any Subsidiary Guarantor shall
pay the Securities until five Business Days after the Representatives of all the
issues of Designated Senior Indebtedness of the Company receive written notice
of such acceleration and, thereafter, the Company and the Subsidiary Guarantors
shall be entitled to pay the Securities (and the Securityholders may accept and
retain such payment) only if this Article 10 otherwise permits payment (and the
acceptance and retention) at that time.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
or payment is made to the Trustee or Securityholders that because of this
Article 10 should not have been made to (or received by) them, the Trustee or
Securityholders who receive the distribution or payment shall hold it in trust
for holders of Senior Indebtedness of the Company and pay it over to them or
their Representatives as their interests may appear.
SECTION 10.06. SUBROGATION. After all Senior Indebtedness of the
Company is paid in full in cash and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Article 10 to holders of 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.
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:
93
(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 or payments
otherwise payable to Securityholders.
SECTION 10.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Senior Indebtedness of the Company to enforce the subordination
of the Indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Trustee or the Securityholders and
without impairing or releasing the subordination provided in this Article 10 or
the obligations hereunder of the Trustee and the Securityholders to the holders
of such Senior Indebtedness, do any one or more of the following: (1) change the
manner, place, terms or time of payment or extend the time of payment of, or
renew or alter, such Senior Indebtedness or any instrument evidencing the same
or any agreement under which such Senior Indebtedness is outstanding; (2) sell,
exchange, impair, release or otherwise deal with any property pledged, mortgaged
or otherwise securing such Senior Indebtedness; (3) release any Person liable in
any manner for the collection or payment of such Senior Indebtedness; and (4)
exercise or refrain from exercising any rights against the Company or any other
Person.
SECTION 10.09. 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
94
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 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 (in its
capacity as such) under or pursuant to Section 7.07.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever any
Person is to make a distribution or give a notice to holders of Senior
indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 10.11. 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 in accordance with Section 6.02.
SECTION 10.12. 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 in accordance with 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 10.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely
95
(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
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 10.14. 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 10.15. TRUSTEE MOT_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
96
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 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF THE
COMPANY ON SUBORDINATION PROVISIONS. Each Securityholder by accepting a Security
(whether upon original issue or upon transfer, assignment or exchange thereof)
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
SUBSIDIARY GUARANTIES
SECTION 11.01. SUBSIDIARY GUARANTIES. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and 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 "Securities
Obligations"). Each Subsidiary Guarantor further agrees that the Securities
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article 11 notwithstanding any extension or renewal
of any Securities Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Securities Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Securities
97
Obligations. The obligations of each Subsidiary 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 (including any Subsidiary Guarantor) under this Indenture, the
Securities or any other agreement or otherwise;
(b) any extension or renewal of any such claim, demand, right or
remedy;
(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 Securities 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 Securities Obligations; or
(f) except as set forth in Section 11.06, any change in the ownership
of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary 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 Securities Obligations.
Each Subsidiary 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 Subsidiary Guarantor giving such Subsidiary Guaranty and
each Subsidiary Guaranty is made subject to such provisions of this Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Subsidiary 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
98
unenforceability of the Securities Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary 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 Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Securities
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
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Securities 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 Securities Obligation, each
Subsidiary 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 Securities Obligations,
(2) accrued and unpaid interest on such Securities Obligations (but
only to the extent not prohibited by law) and
(3) all other monetary Securities Obligations of the Company to the
Holders and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Securities Obligations guaranteed hereby
until payment in full of all Securities Obligations and all obligations to which
the Securities Obligations are subordinated as
99
provided in Article 12. Each Subsidiary 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 Securities Obligations Guaranteed hereby may
be accelerated as provided in Article 6 for the purposes of such Subsidiary
Guarantor's Subsidiary Guaranty herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of
the Securities Obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such
Securities Obligations as provided in Article 6, such Securities
Obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of this Section
11.01.
Each Subsidiary 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 11.01.
SECTION 11.02. LIMITATION ON LIABILITY. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Securities Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary 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 Subsidiary 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
100
further exercise of any right, power or privilege. The rights, remedies and
benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article 11 at law, in equity, by statute or
otherwise.
SECTION 11.05. MODIFICATION. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary 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 Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.06. RELEASE OF SUBSIDIARY GUARANTOR. Upon
(i) the sale (including any sale pursuant to any exercise of
remedies by a holder of Senior Indebtedness of the Company or of such
Subsidiary Guarantor) or other disposition (including by way of
consolidation or merger) of a Subsidiary Guarantor,
(ii) the sale or disposition of all or substantially all the assets
of such Subsidiary Guarantor or
(iii) upon the designation of such Subsidiary Guarantor as an
Unrestricted Subsidiary pursuant to the terms of this Indenture,
such Subsidiary Guarantor shall be deemed released from all obligations under
this Article 11 without any further action required on the part of the Trustee
or any Holder, in each case other than a sale or disposition to Parent or a
Subsidiary of Parent. In the case of clauses (i) and (ii) above, the Company
shall provide an Officers' Certificate to the Trustee to the effect that the
Company will comply with its obligations under Section 4.06. At the request of
the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
SECTION 11.07. CONTRIBUTION. Each Subsidiary Guarantor that makes a
payment under its Subsidiary Guaranty shall be entitled upon payment in full of
all guarantied obligations under this Indenture to a contribution from each
101
other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net assets
of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTIES
SECTION 12.01. AGREEMENT TO SUBORDINATE. Each Subsidiary Guarantor
agrees, and each Securityholder by accepting a Security agrees, that the
Indebtedness evidenced by such Subsidiary Guarantor's Subsidiary 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
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
incurred) and that the subordination is for the benefit of and enforceable by
the holders of such Senior Indebtedness. The Securities Obligations of a
Subsidiary Guarantor shall in all respects rank PARI PASSU with all other Senior
Subordinated Indebtedness of such Subsidiary Guarantor and only Senior
Indebtedness of such Subsidiary Guarantor (including such Subsidiary Guarantor's
Guarantee of Senior Indebtedness of the Company) shall rank senior to the
Securities Obligations of such Subsidiary Guarantor in accordance with the
provisions set forth herein.
SECTION 12.02. LIQUIDATION, DISSOLUTION. BANKRUPTCY. Upon any payment
or distribution of the assets of any Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon a total or
partial liquidation or a total or partial dissolution of such Subsidiary
Guarantor or in a bankruptcy, reorganization, insolvency, receivership,
winding-up, assignment for the benefit of creditors, marshalling of assets or
similar proceeding relating to such Subsidiary Guarantor or its property whether
voluntary or involuntary:
(1) the holders of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to receive payment in full in cash of all Obligations
with respect to all such Senior Indebtedness before Securityholders shall
be entitled to receive any payment or distribution of any kind or character
with respect to any Obligations of such Subsidiary Guarantor; and
(2) until the Senior Indebtedness of such Subsidiary Guarantor is
paid in full in cash, any payment or distribution to which Securityholders
would
102
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 shares of stock and any debt securities that are subordinated to
such Senior Indebtedness to at least the same extent as the Securities.
SECTION 12.03. DEFAULT ON SENIOR INDEBTEDNESS OF SUBSIDIARY GUARANTOR.
No Subsidiary Guarantor shall make any payment (in cash, property, securities or
other assets) with respect to its Subsidiary Guaranty or purchase, redeem or
otherwise retire, acquire or defease any Securities or other Securities
Obligations (collectively, "pay its Subsidiary Guaranty") if either of the
following (a "Payment Default") occurs (1) any Senior Indebtedness of such
Subsidiary Guarantor is not paid in full in cash when due or (2) any other
default on Senior Indebtedness of such Subsidiary Guarantor occurs and the
maturity of such 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 Senior Indebtedness has been
paid in full in cash; PROVIDED, HOWEVER, that any Subsidiary Guarantor shall be
entitled to make any payment with respect to its Subsidiary Guaranty without
regard to the foregoing if such Subsidiary Guarantor and the Trustee receive
written notice approving such payment from the Representatives of all 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 Subsidiary Guarantor
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Subsidiary
Guarantor shall not pay its Subsidiary Guaranty for a period (a "Payment
Blockage Period") commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a "Blockage Notice") of such default from the
Representative of 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 Subsidiary Guarantor
from the Person or Persons who gave such Blockage Notice;
103
(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 immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section 12.03), unless the holders of such Designated Senior Indebtedness giving
such Blockage Notice or the Representatives of such Designated Senior
Indebtedness shall have accelerated the maturity of such Designated Senior
indebtedness, any Subsidiary Guarantor shall be entitled to resume payments
pursuant to its Subsidiary Guaranty after termination of such Payment Blockage
Period. No Subsidiary Guaranty 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 Subsidiary Guarantor during
such period; PROVIDED, HOWEVER, that if any Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior Indebtedness
of such Subsidiary Guarantor (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.
For purposes of this Section 12.03, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness of such
Subsidiary Guarantor initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 12.04. DEMAND FOR PAYMENT. If a demand for payment is made on
a Subsidiary Guarantor pursuant to Article 11, the Trustee shall promptly notify
in writing the holders of the Designated Senior Indebtedness of such Subsidiary
Guarantor (or their Representatives) of such demand.
104
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to the Trustee as the Securityholders that because of this Article 12
should not have been made to (or received by) them, the Trustee or the
Securityholders who receive the distribution or payment shall hold it in trust
for holders of Senior Indebtedness of the applicable Subsidiary 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
Subsidiary Guarantor is paid in full in cash and until the Securities are paid
in full, Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness of such
Subsidiary Guarantor. A distribution made under this Article 12 to holders of
Senior Indebtedness which otherwise would have been made to Securityholders is
not, as between the relevant Subsidiary Guarantor and Securityholders, a payment
by such Subsidiary 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 Subsidiary
Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Securityholders,
the obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay its Subsidiary Guaranty to the extent set forth in
Article 11; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by such Subsidiary Guarantor under its
Subsidiary Guaranty, subject to the rights of holders of Senior
Indebtedness of such Subsidiary Guarantor to receive distributions
otherwise payable to Securityholders.
SECTION 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY THE SUBSIDIARY
GUARANTORS. No right of any holder of Senior Indebtedness of any Subsidiary
Guarantor to enforce the subordination of the Subsidiary Guaranty of such
Subsidiary Guarantor shall be impaired by any act or failure to act by such
Subsidiary Guarantor or by such Subsidiary Guarantor's failure to comply with
this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of a Subsidiary Guarantor may, at any time
and from time to time, without the consent of or notice to the Trustee or the
105
Securityholders, without incurring responsibility to the Trustee or the
Securityholders and without impairing or releasing the subordination provided in
this Article 12 or the obligations hereunder of the Trustee and the
Securityholders to the holders of such Senior Indebtedness, do any one or more
of the following: (1) change the manner, place, terms or time of payment or
extend the time of payment of, or renew or alter, such Senior Indebtedness or
any instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (2) sell, exchange, impair, release or otherwise
deal with any property pledged, mortgaged or otherwise securing such Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of such Senior Indebtedness; and (4) exercise or refrain from exercising
any rights against such Subsidiary Guarantor or any other Person.
SECTION 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 12.03, the Trustee or Paying Agent shall continue to make payments on
any Subsidiary Guaranty and shall not be charged with knowledge of the existence
of facts under this Article 12 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 Subsidiary Guarantor, the Registrar or co-registrar, the Paying Agent,
a Representative or a holder of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to give the notice; PROVIDED, HOWEVER, that, if an issue of
Senior Indebtedness of any Subsidiary 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 Subsidiary Guarantor with the same rights it
would have if it were not the Trustee. The Registrar and co-registrar and the
Paying Agent may do the same with like rights. The Trustee shall be entitled to
all the rights set forth in this Article 12 with respect to any Senior
Indebtedness of any Subsidiary 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 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever any
Person is to make a
106
distribution or give a notice to holders of Senior Indebtedness of any
Subsidiary Guarantor, such Person shall be entitled to make such distribution or
give such notice to their Representative (if any).
SECTION 12.11. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO DEMAND PAYMENT. The failure to make a payment pursuant to a Subsidiary
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 Subsidiary Guarantor pursuant to its Subsidiary Guaranty.
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 Subsidiary 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 Subsidiary 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 Subsidiary 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 Subsidiary 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
107
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 any Subsidiary
Guarantor as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF SUBSIDIARY GUARANTOR. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary 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
SUBSIDIARY 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 any Subsidiary Guarantor, 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 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. TIA 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.
108
SECTION 13.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to Parent, the Company or any Subsidiary Guarantor:
AmeriPath, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Reboul, MacMurray, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Phone; (▇▇▇) ▇▇▇-▇▇▇▇
Fax: {212} ▇▇▇-▇▇▇▇
if to the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention; Corporate Trust Administration
Parent, the Company, any Subsidiary 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
109
Company, each Subsidiary 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.
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
110
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee 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. if a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of
New
York.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. A director, officer,
manager, employee, incorporator, member, partner or stockholder, as such, of
Parent, the Company or any Subsidiary Guarantor shall not have any liability for
any obligations of Parent or the Company under the Securities or this Indenture
or any such Subsidiary Guarantor under any Subsidiary Guaranty, as the case may
be, 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 Parent, the Company or
any Subsidiary Guarantor 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.
111
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.
▇▇▇ ACQUISITION CORP.,
a Delaware corporation
by /s/ ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
-----------------------
Name: ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
Title: Vice President
AMERIPATH HOLDINGS, INC.,
a Delaware corporation,
as Parent,
by /s/ ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
-----------------------
Name: ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
Title: Vice President
3-GEN DIAGNOSTIC LABORATORIES, INC.
(a Utah corporation)
AMERIPATH 5-01(A)CORPORATION
(a Texas not-for-profit
corporation)
AMERIPATH CARROLLTON, INC.
(a Georgia corporation)
AMERIPATH CINCINNATI, INC.
(an Ohio corporation)
AMERIPATH CLEVELAND, INC,
(an Ohio corporation)
AMERIPATH CONSOLIDATED LABS, INC.
(a Florida corporation)
AMERIPATH FLORIDA, INC,
(a Florida corporation)
AMERIPATH KENTUCKY, INC.
(a Kentucky corporation)
AMERIPATH LUBBOCK 5.01(A)
CORPORATION
(a Texas not-for-profit
corporation)
AMERIPATH MARKETING USA, INC.
(a Florida corporation)
AMERIPATH MICHIGAN, INC.
(a Michigan corporation)
AMERIPATH MISSISSIPPI, INC.
(a Mississippi corporation)
AMERIPATH NEW ENGLAND, INC.
(a Delaware corporation)
AMERIPATH
NEW YORK, INC.
(a Delaware corporation)
AMERIPATH NORTH CAROLINA, INC.
(a North Carolina corporation)
AMERIPATH OHIO, INC.
(a Delaware corporation)
AMERIPATH ▇▇▇ 5.01(A) CORPORATION
(a Texas not-for-profit
corporation)
AMERIPATH PCC, INC.
(an Ohio corporation)
AMERIPATH PENNSYLVANIA, INC.
(a Pennsylvania corporation)
AMERIPATH PHILADELPHIA, INC.
(a New Jersey corporation)
AMERIPATH SC, INC.
(a South Carolina corporation)
AMERIPATH SEVERANCE 5.01(A)
CORPORATION
(a Texas not-for-profit
corporation)
AMERIPATH, WISCONSIN, INC.
(a Wisconsin corporation)
AMERIPATH YOUNGSTOWN LABS, INC.
(an Ohio corporation)
AMERIPATH YOUNGSTOWN, INC.
(an Ohio corporation)
ANATOMIC PATHOLOGY SERVICES, INC.
(an Oklahoma corporation)
ARIZONA PATHOLOGY GROUP, INC.
{an Arizona corporation)
ARLINGTON PATHOLOGY ASSOCIATION
5.01(A) CORPORATION
(a Texas not-for-profit
corporation)
▇▇▇ ▇. ▇▇▇▇▇▇, M.D., F.C.A.P., INC.
(a Mississippi corporation)
CALIFORNIA PATHOLOGY CONSULTANTS OF
AMERICA, INC.
(a Tennessee corporation)
CPA I, INC.
(a Tennessee corporation)
CPA II, INC.
(a Tennessee corporation)
DERMATOPATHOLOGY SERVICES, INC.
(an Alabama corporation)
DERMPATH, INC.
(a Delaware corporation)
DFW 5.01(A) CORPORATION
(a Texas not-for-profit
corporation)
DIAGNOSTIC PATHOLOGY MANAGEMENT
SERVICES, INC.
(an Oklahoma corporation)
GEORGIA PATHOLOGY CONSULTANTS OF
AMERICA, INC.
(a Tennessee corporation)
J. ▇▇▇▇▇ ▇▇▇▇▇, M.D., INC.
(a Georgia corporation)
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D.,
F.C.A.P., INC.
(a Mississippi corporation)
KAILASH ▇. ▇▇▇▇▇▇, M.D., INC.
(a Georgia corporation)
▇▇▇▇▇▇▇▇▇ ▇▇▇, M.D., INC.
(a Georgia corporation)
NAPA 5.01(A) CORPORATION
(a Texas not-for-profit
corporation)
OCMULGEE MEDICAL PATHOLOGY
ASSOCIATION, INC.
(a Georgia corporation)
▇'▇▇▇▇▇ MEDICAL PATHOLOGY
ASSOCIATION, INC.
(a Georgia corporation)
PATHOLOGY AFFILIATED SERVICES, INC.
(a Texas corporation)
PATHOLOGY CONSULTANTS OF AMERICA,
INC.
(a Tennessee corporation)
PATHSOURCE, INC.
(a Delaware corporation)
PCA OF COLUMBUS, INC.
(a Tennessee corporation)
PCA OF DENVER, INC.
(a Tennessee corporation)
PCA OF LOS GATOS, INC.
(a Tennessee corporation)
PCA OF MEMPHIS, INC.
(a Tennessee corporation)
PCA OF NASHVILLE, INC.
(a Tennessee corporation)
PCA OF ST. ▇▇▇▇▇ ▇▇, INC.
{a Tennessee corporation)
PCA SOUTHEAST II, INC.
(a Tennessee corporation)
PCA/APR ACQUISITION CORP.
(a Tennessee corporation)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., INC.
(a Georgia corporation)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., INC.
(a Georgia corporation)
SHOALS PATHOLOGY ASSOCIATES, INC.
(an Alabama corporation)
▇▇▇▇▇▇▇ PATHOLOGY 5.01(A)
CORPORATION
(a Texas not-for-profit
corporation)
STRIGEN, INC.
(a Utah corporation)
TID ACQUISITION CORP.
(a Delaware corporation)
TXAR 5.01(A) CORPORATION
(a Texas not-for-profit
corporation)
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ROCKY MOUNTAIN PATHOLOGY, L.L.C.
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
AMERIPATH, LLC
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
API NO. 2, LLC
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
AMERIPATH INDIANA, LLC
by: AMERIPATH,INC.
(as Managing Member)
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
COLUMBUS PATHOLOGY ASSOCIATES
by: CPA I, INC.
(as General Partner)
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NUCLEAR MEDICINE AND PATHOLOGY ASSOCIATES
by: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., INC.
(as General Partner)
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
AMERIPATH TEXAS, LP
by: AMERIPATH, LLC
(as General Partner)
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
U.S. Bank National Association,
as Trustee,
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
Capitalized terms used but not otherwise defined in this Appendix
shall have the meanings assigned in the Indenture. For the purposes of this
Appendix 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 Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or any
successor securities clearing agency.
"Definitive Security" means a certificated Security issued on the
Issue Date 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.
"Exchange Securities" means (1) the 10 1/2% Senior Subordinated
Notes Due 2013 issued pursuant to the Indenture in connection with a Registered
Exchange Offer 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.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.
"Initial Purchasers" means, with respect to the Initial Securities
issued on the Issue Date, Credit Suisse
2
First Boston LLC, Deutsche Bank Securities Inc. and Wachovia Securities, Inc.
"Initial Securities" means (1) $275,000,000 aggregate principal
amount of 10 1/2% Senior Subordinated Notes Due 2013 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 this initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 10 1/2% Senior Subordinated
Notes Due 2013 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 March 13,
2003, among the Company 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.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated March 27, 2003 among the Company, the Subsidiary 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.
3
"Rule 144A Securities" means all Securities offered and sold to
QIBs in reliance on Rule 144A.
"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 relating to restrictions on transfer relating to the
Securities Act set forth in Section 2.3(e).
1.2 OTHER DEFINITIONS
Defined in
Term Section:
---- -----------
Agent Members .................................................................... 2.1(b)
Global Security .................................................................. 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)
Temporary Regulation S Global Security ........................................... 2.1(a)
2. THE SECURITIES
2.1 (a) FORM AND DATING. The Securities will be offered and sold by
the Company pursuant to a Purchase Agreement. The Securities will be resold
initially only to (i) QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in Regulation
S) in reliance on Regulation S under the Securities Act ("Regulation S").
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. Securities initially resold pursuant to Rule 144A (collectively, the
"Rule 144A Global Security") shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form, and
Securities initially resold pursuant to Regulation S (collectively, the
4
"Temporary Regulation s Global Security") shall be issued initially in the form
of one or more temporary global securities in definitive, fully registered form,
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 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 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
5
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
or 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 $275,000,000 10 1/2% Senior Subordinated Notes
Due 2013 and (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, 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 this 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 shall register the transfer or make the exchange as requested if
its reasonable requirements for
6
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 its
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;
or
(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
7
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 Global
Security (in the case of a transfer pursuant to clause (b)(i)(C)) 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
regarding the Depository 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 of the
Company, a new Rule 144A Global Security or Permanent Regulation S Global
Security, as applicable, in the appropriate principal amount.
8
(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 Depository 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 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 (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, 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
9
(including the certification requirements set forth on the reverse of the
Securities intended to ensure that such transfers comply with Rule 144A,
Regulation S or another applicable exemption under the Securities Act, 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 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
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 UNITED STATES
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
10
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 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 OTHER JURISDICTIONS, 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 shall also bear the following additional
legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted 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).
(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
11
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 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, 4.06, 4.09 and 9.05 of the Indenture).
(iii) The Registrar shall not be required to register the transfer
of or exchange of (a) any Definitive Security selected for redemption in
whole or in part pursuant to Article 3 of the Indenture, except the
unredeemed portion of any Definitive Security being redeemed in part or (b)
any Security for a period beginning 15 Business Days before the mailing of
a notice of an offer to repurchase or redeem Securities or 15 Business 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 or the
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 or the 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
12
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
(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 CERTIFICATED 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
13
such Global Security, only if such transfer complies with Section 2.3 hereof and
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security and the Depository fails to
appoint a successor depositary or if at any time such Depository ceases to be a
"clearing agency" registered under the Exchange Act and, in either case, a
successor Depository 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 2.4 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 2.4 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 the Transfer Restricted Security shall, except as
otherwise provided by Section 2.3(e) hereof, bear the restricted securities
legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, 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) hereof, 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
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"),
NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL 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.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE
COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED
STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE
OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES 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) WITHIN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
ROLE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A,
2
(III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO 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 OTHER JURISDICTIONS, 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]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
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(b)(2) 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)
WITHIN 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 A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER
JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE, IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
3
WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATIONS GLOBAL SECURITY FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING
TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON
WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND
(C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904
OF REGULATION S, RULE 144 (IF AVAILABLE) OR ANOTHER APPLICABLE EXEMPTION UNDER
THE SECURITIES ACT (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR TO THE
EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST
TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK S.A./N.A.
OR CLEARSTREAM BANKING SOCIETE ANONYME.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
CUSIP______
No._______________ $__________
10 1/2% Senior Subordinated Note Due 2013
▇▇▇ ACQUISITION CORP., a Delaware corporation, promises to pay
to , or registered assigns, the principal sum of
Dollars on April 1, 2013.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
2
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
▇▇▇ ACQUISITION CORP.
by
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. Bank National Association,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
------------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY]
10 1/2% Senior Subordinated Note Due 2013
1. INTEREST
▇▇▇ Acquisition Corp., 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 of 0.25% per
annum (increasing by an additional 0.25% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 1.00%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. The Company will pay interest
semiannually on April 1 and October 1 of each year, commencing October 1, 2003.
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 March 27,
2003. Interest on overdue principal will be paid by the Issuer at 1% per annum
in excess of the rate shown above and the Issuer will pay interest on overdue
installments of interest at such higher rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT
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 March 15 or September 15 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, if any, 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,
2
premium, if any, 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. Bank National Association (the "Trustee"), will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent or Registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
March 27, 2003 (the "Indenture"), among the Company, AmeriPath Holdings, Inc.,
the guarantors party thereto 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 Securities issued on the Issue Date, any Additional Securities and any
Exchange Securities or Private Exchange Securities will be treated as a single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its 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; transfer or sell assets; guarantee indebtedness;
change their line of business; 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.
3
5. OPTIONAL REDEMPTION
Except as set forth below, the Company shall not be entitled to
redeem the Securities.
On and after April 1, 2008, the Company shall be entitled at its
option to redeem all or a portion of the Securities (which includes Additional
Securities, if any) 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 interest to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), if redeemed during the 12-month period
commencing on April 1 of the years set forth below:
Redemption
Period Price
------ ----------
2008 105.25%
2009 103.50%
2010 101.75%
2011 and thereafter 100.000%
In addition, prior to April 1, 2006, 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 originally issued at a
redemption price (expressed as a percentage of principal amount) of 110.50%,
plus accrued and unpaid interest to the redemption date, with the net cash
proceeds received by the Company from one or more Qualified Equity Offerings
(PROVIDED that, if the Qualified Equity Offering is an offering by Parent, a
portion of the Net Cash Proceeds thereof equal to the amount required to redeem
any such Notes is contributed to the equity capital of the Company or used to
acquire Capital Stock of the Company (other than Disqualified Stock) from the
Company); 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.
4
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 its registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. Securities in denominations of $1,000 principal amount or less may be
redeemed in whole but not in part. 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, any Holder of Securities will have the
right to cause the Company to repurchase all of the Securities of such Holder at
a repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (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.
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. SUBSIDIARY 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 Subsidiary Guarantors to
the extent set forth in the Indenture.
5
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
Company or the Registrar may require a Holder, among other things, to pay a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section. The Company
shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection 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 owner
of it for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee 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, and the obligations of the Subsidiary Guarantors under their
Subsidiary Guaranties, 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
6
majority in principal amount outstanding of the Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, Parent, the Company, the Subsidiary Guarantors and the Trustee
shall be entitled to amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, including Subsidiary Guaranties, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the Company
or the Subsidiary Guarantors, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make certain
changes in the subordination provisions, or to make any change that does not
adversely affect the rights of any Securityholder.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company,
Parent or any Subsidiary 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, Parent (so
long as the Existing Contingent Notes have not been satisfied in full and cash
remains in the Contingent Note Reserve), any Subsidiary Guarantor or any
Significant Subsidiary if the amount accelerated (or so unpaid) exceeds $10.0
million; (v) certain events of bankruptcy or insolvency with respect to the
Company, Parent (so long as the Existing Contingent Notes have not been
satisfied in full and cash remains in the Contingent Note Reserve) and the
Significant Subsidiaries; (vi) certain judgments or decrees for the payment of
money in excess of $10.0 million; and (vii) certain defaults with respect to the
Subsidiary 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 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.
7
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 not opposed to 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
A director, officer, manager, employee,incorporator, member,
partner or stockholder, as such, of the Company, any Subsidiary Guarantor or the
Trustee shall not have any liability for any obligations of the Company under
the Securities or the Indenture or any Subsidiary Guarantor under any Subsidiary
Guaranty, as the case may be, or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release 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).
8
20. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
21. 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.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
AmeriPath, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
9
--------------------------------------------------------------------------------
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 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;
(2) / / pursuant to an effective registration statement under the
Securities Act of 1933;
(3) / / inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933;
10
(4) / / outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933; or
(5) / / pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; PROVIDED, HOWEVER, that if box
(4) or (5) 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 of 1933, 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 (3) ABOVE IS CHECKED.
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 of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has
11
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
[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 Principal amount Signature of
Exchange in Principal in Principal of this global authorized officer
amount of the amount of the Security following of Trustee or
Global Security Global Security such decrease or Securities
increase) Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 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 4.06 or 4.09 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.
EXHIBIT A
[FORM OF FACE OP EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY] */**/
----------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Rule 144A/Regulation S Appendix 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 Rule 144A/Regulation S
Appendix and replace the Assignment Form included in this Exhibit A with the
Assignment Form included in such Exhibit 1.
CUSIP____________
No._____________ $________________
10 1/2% Senior Subordinated Note Due 2013
▇▇▇ ACQUISITION CORP., a Delaware corporation, promises to pay to
, or registered assigns, the principal sum of
Dollars on April 1, 2013.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
3
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
▇▇▇ ACQUISITION CORP.
by
------------------------
Name:
Title:
4
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. Bank National Association,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY]
10 1/2% Senior Subordinated Note Due 2013
1. INTEREST
▇▇▇ Acquisition Corp., 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, to the extent provided in the Registration Rights Agreement, if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum
(increasing by an additional 0.25% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 1.00%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured.](1) The Company will pay
interest semiannually on April 1 and October 1 of each year, commencing October
1, 2003.
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 March 27,
2003. Interest on overdue principal will be paid by the Issuer at 1% per annum
in excess of the rate shown above and the Issuer will pay interest on overdue
installments of interest at such higher rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT
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 March 15 or September 15 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
----------
1. Insert if at the date of issuance of the Exchange Security or Private
Exchange Security (as the case may be) any Registration Default has occurred
with respect to the related Initial Securities during the interest period in
which such date of issuance occurs.
2
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, if
any, 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, if any, 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. Bank National Association (the "Trustee"), will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent or Registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
March 27, 2003 (the "Indenture"), among the Company, AmeriPath Holdings, Inc.,
the guarantors party thereto 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. Section 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 Securities issued on the Issue Date, any Additional Securities and any
Exchange Securities or Private Exchange Securities will be treated as a single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its subsidiaries to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase
3
capital stock; make investments; issue or sell capital stock of subsidiaries;
engage in transactions with affiliates; transfer or sell assets; guarantee
indebtedness; change their line of business; 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.
On and after April I, 2008, the Company shall be entitled at its
option to redeem all or a portion of the Securities (which includes Additional
Securities, if any) 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 interest to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), if redeemed during the 12-month period
commencing on April 1 of the years set forth below:
Redemption
Period Price
------ ----------
2008 105.25%
2009 103.50%
2010 101.75%
2011 and thereafter 100.000%
In addition, prior to April 1, 2006, 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 originally issued at a
redemption price (expressed as a percentage of principal amount) of 110.50%,
plus accrued and unpaid interest to the redemption date, with the net cash
proceeds received by the Company from one or more Qualified Equity Offerings
(PROVIDED that, if the Qualified Equity Offering is an offering by Parent, a
portion of the Net Cash Proceeds thereof equal to the amount required to redeem
any such Notes is contributed to the equity capital of the Company or used to
acquire Capital Stock of the Company (other than Disqualified Stock) from the
Company); PROVIDED, HOWEVER,
4
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.
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 its registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. Securities in denominations of $1,000 principal amount or less may be
redeemed in whole but not in part. 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, any Holder of Securities will have the
right to cause the Company to repurchase all of the Securities of such Holder at
a repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (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.
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.
5
9. SUBSIDIARY 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 Subsidiary Guarantors to
the extent set forth in the Indenture.
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
Company or the Registrar may require a Holder, among other things, to pay a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section. The Company
shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection 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 owner
of it for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee 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, and the obligations of the Subsidiary Guarantors under their
Subsidiary Guaranties, 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.
6
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, Parent, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, including Subsidiary Guaranties, or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company or the Subsidiary Guarantors, or to comply with
any request of the SEC in connection with qualifying the Indenture under the
Act, or to make certain changes in the subordination provisions, or to make any
change that does not adversely affect the rights of any Securityholder.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company,
Parent or any Subsidiary 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, Parent (so
long as the Existing Contingent Notes have not been satisfied in full and cash
remains in the Contingent Note Reserve), any Subsidiary Guarantor or any
Significant Subsidiary if the amount accelerated (or so unpaid) exceeds $10.0
million; (v) certain events of bankruptcy or insolvency with respect to the
Company, Parent (so long as the Existing Contingent Notes have not been
satisfied in full and cash remains in the Contingent Note Reserve) and the
Significant Subsidiaries; (vi) certain judgments or decrees for the payment of
money in excess of $10.0 million; and (vii) certain defaults with respect to
7
the Subsidiary 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 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 not opposed to 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
A director, officer, manager, employee, incorporator, member,
partner or stockholder, as such, of the Company, any Subsidiary Guarantor or the
Trustee shall not have any liability for any obligations of the Company under
the Securities or the Indenture or any Subsidiary Guarantor under any Subsidiary
Guaranty, as the case may be, or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release 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.
8
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
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
[21. 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.](2)
22. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF
NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
AmeriPath, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
----------
2. Delete if this Security is not being issued in exchange for an Initial
Security.
9
--------------------------------------------------------------------------------
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 4.06 or 4.09 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 4.06 or 4.09 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.
ANNEX A
[FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
[ ] among [ ] (the "Subsidiary Guarantor"), a [ ] and a subsidiary of AmeriPath,
Inc., a Delaware corporation (or its permitted successor) (the "Company"), the
Company, AmeriPath Holdings, Inc., a Delaware corporation ("Holdings"), the
other Subsidiary Guarantors and U.S. Bank National Association, as Trustee under
the Indenture (the "Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of March 27, 2003, providing
for the issuance of 10-1/2% Senior Subordinated Notes due 2013 (the
"Securities");
WHEREAS, pursuant to Section 4.11 of the Indenture, the Company may
cause a Domestic Restricted Subsidiary that Incurs Indebtedness (other than, in
the case of any Consolidated Managed Subsidiary, Indebtedness owed to the
Company or any Subsidiary Guarantor), or a Foreign Subsidiary that enters into a
Guarantee of any Indebtedness of the Company, to execute and deliver to the
Trustee a Guaranty Agreement pursuant to which such Restricted Subsidiary will
Guarantee payment of the Securities on the same terms and conditions as those
set forth in the Indenture; and
WHEREAS, pursuant to Section 9.01(4) of the Indenture, the Trustee
is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Subsidiary Guarantor, Holdings the other Subsidiary Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Securities as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used herein but not
defined shall have the meanings assigned to them in the Indenture.
SECTION 2. GUARANTIES. The Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally with the other
Subsidiary Guarantors, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of and interest
2
on the Securities when due, whether at maturity, by acceleration, by redemption
or otherwise, and all other monetary obligations of the Company under the
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under the
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Guaranteed Obligations"). The Subsidiary Guarantor further agrees
that the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from the Subsidiary Guarantor and that the
Subsidiary Guarantor will remain bound under this Supplemental Indenture
notwithstanding any extension or renewal of any Guaranteed Obligation.
The Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. The Subsidiary Guarantor waives notice
of any default under the Securities or the Guaranteed Obligations. The
obligations of the Subsidiary 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 the
Indenture, this Supplemental 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 the
Indenture, this Supplemental Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Guaranteed Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (f) except as set forth in Section 11.06 of the
Indenture, any change in the ownership of the Subsidiary Guarantor.
The Subsidiary Guarantor further agrees that its Subsidiary
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 Guaranteed Obligations.
The Subsidiary Guaranty is, to the extent and in the manner set
forth in Article 12 of the Indenture, 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 Subsidiary
3
Guarantor and the Subsidiary Guaranty is made subject to the provisions of the
Indenture.
Except as expressly set forth in Section 8.01(b), 11.02 and 11.06
of the Indenture, the obligations of the Subsidiary Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of the Subsidiary 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 the Indenture, this Supplemental Indenture, the Securities or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Guaranteed
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Subsidiary Guarantor or would otherwise operate as a discharge of the
Subsidiary Guarantor as a matter of law or equity.
The Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against the
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, the
Subsidiary 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 Guaranteed Obligations, (2) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (3) all other
monetary Guaranteed Obligations of the Company to the Holders and the Trustee.
4
The Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in respect of any Guaranteed Obligations guaranteed
hereby until payment in full of all Guaranteed Obligations and all obligations
to which the Guaranteed Obligations are subordinated as provided in Article 12
of the Indenture. The Subsidiary Guarantor agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the Guaranteed Obligations may be accelerated as provided in Article 6 of the
Indenture for the purposes of the Subsidiary Guarantor's Subsidiary Guaranty
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations, and (y) in the event
of any declaration of acceleration of such Guaranteed Obligations as provided in
Article 6 of the Indenture, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantor for
the purposes of this Supplemental Indenture.
The Subsidiary 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 2.
SECTION 3. LIMITATION ON LIABILITY. Any term or provision of this
Supplemental Indenture to the contrary notwithstanding, the maximum aggregate
amount of the Guaranteed Obligations by the Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Supplemental Indenture, as it relates to the Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance, fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 4. SUCCESSORS AND ASSIGNS. This Supplemental Indenture
shall be binding upon the Subsidiary Guarantor and its successors and assigns
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party in
this Supplemental 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 Supplemental Indenture.
SECTION 5. 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 Supplemental Indenture shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any
5
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Supplemental Indenture at law, in equity, by statute
or otherwise.
SECTION 6. MODIFICATION. No modification, amendment or waiver of
any provision of this Supplemental Indenture, nor the consent to any departure
by the Subsidiary 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 the Subsidiary Guarantor in any case
shall entitle the Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 7. RELEASE. Upon
(i) the sale (including any sale pursuant to any exercise of
remedies by a holder of Senior Indebtedness of the Company or of such
Subsidiary Guarantor) or other disposition (including by way of
consolidation or merger) of the Subsidiary Guarantor,
(ii) the sale or disposition of all or substantially all the
assets of the Subsidiary Guarantor or
(iii) upon the designation of the Subsidiary Guarantor as an
Unrestricted Subsidiary pursuant to the terms of the Indenture,
the Subsidiary Guarantor shall be deemed released from all obligations under
this Supplemental Indenture without any further action required on the part of
the Trustee or any Holder, in each case other than a sale or disposition to
Parent or a Subsidiary of Parent, PROVIDED, HOWEVER, in the case of clauses (i)
and (ii) above, the Company provides an Officers' Certificate to the Trustee to
the effect that the Company will comply with its obligations under Section 4.06
of the Indenture.
SECTION 8. CONTRIBUTION. The Subsidiary Guarantor shall be entitled
upon payment in full of all guarantied obligations under this Supplemental
Indenture to a contribution from each other Subsidiary Guarantor in an amount
equal to such other Subsidiary Guarantor's pro rata portion of such payment
based on the respective net assets
6
of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
SECTION 9. GOVERNING LAW. This Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporates, partner, stockholder, member or manager, as such, of the
Subsidiary Guarantor shall not have any liability for any obligations of Parent
or the Company under the Securities or the indenture or of the Subsidiary
Guarantor under its Subsidiary Guaranty, the Indenture or this Supplemental
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder waives and
releases all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 11. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. One signed copy is enough
to prove this Supplemental Indenture.
SECTION 12. HEADINGS. The headings of the Sections of this
Supplemental 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 Supplemental
Indenture to be duly executed as of the date first written above.
[SUBSIDIARY GUARANTOR]
by
----------------------
Name:
Title:
7
AMERIPATH, INC
by
-------------------------
Name:
Title:
AMERIPATH HOLDINGS, INC
by
-------------------------
Name:
Title:
[OTHER SUBSIDIARY
GUARANTORS]
by
-------------------------
Name:
Title:
U.S. BANK NATIONAL
ASSOCIATION, as Trustee
by
-------------------------
Name:
Title: