Exhibit 10.2
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SUN HEALTHCARE GROUP, INC.
ISSUER,
THE GUARANTORS NAMED HEREIN,
AND
U.S. BANK TRUST NATIONAL ASSOCIATION,
TRUSTEE
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INDENTURE
Dated as of May 4, 1998
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$125,000,000*
9 3/8% Senior Subordinated Notes due 2008
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* Subject to increase to up to $150,000,000 in the event an over-allotment
option is exercised
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Incorporation by Reference of TIA. . . . . . . . . . 18
SECTION 1.3. Rules of Construction. . . . . . . . . . . . . . . . 19
ARTICLE II
THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.1. Form and Dating. . . . . . . . . . . . . . . . . . . 20
SECTION 2.2. Execution and Authentication . . . . . . . . . . . . 20
SECTION 2.3. Registrar and Paying Agent . . . . . . . . . . . . . 21
SECTION 2.4. Paying Agent to Hold Assets in Trust . . . . . . . . 22
SECTION 2.5. Securityholder Lists . . . . . . . . . . . . . . . . 22
SECTION 2.6. Transfer and Exchange. . . . . . . . . . . . . . . . 22
SECTION 2.7. Replacement Securities . . . . . . . . . . . . . . . 28
SECTION 2.8. Outstanding Securities . . . . . . . . . . . . . . . 29
SECTION 2.9. Treasury Securities. . . . . . . . . . . . . . . . . 29
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . 29
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . 30
SECTION 2.13. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . 31
SECTION 2.14. Offer to Purchase by Application of Excess
Proceeds. . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III
REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.1. Right of Redemption. . . . . . . . . . . . . . . . . 34
SECTION 3.2. Notices to Trustee . . . . . . . . . . . . . . . . . 34
SECTION 3.3. Selection of Securities to Be Redeemed . . . . . . . 35
SECTION 3.4. Notice of Redemption . . . . . . . . . . . . . . . . 35
SECTION 3.5. Effect of Notice of Redemption . . . . . . . . . . . 36
SECTION 3.6. Deposit of Redemption Price. . . . . . . . . . . . . 36
SECTION 3.7. Securities Redeemed in Part. . . . . . . . . . . . . 37
ARTICLE IV
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.1. Payment of Securities. . . . . . . . . . . . . . . . 37
SECTION 4.2. Maintenance of Office or Agency. . . . . . . . . . . 37
i
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SECTION 4.3. Limitation on Restricted Payments. . . . . . . . . . 38
SECTION 4.4. Corporate and Partnership Existence. . . . . . . . . 40
SECTION 4.5. Payment of Taxes and Other Claims. . . . . . . . . . 40
SECTION 4.6. Maintenance of Properties and Insurance. . . . . . . 40
SECTION 4.7. Compliance Certificate; Notice of Default. . . . . . 41
SECTION 4.8. Reports. . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.9. Limitation on Status as Investment Company . . . . . 42
SECTION 4.10. Limitation on Transactions with Affiliates . . . . . 42
SECTION 4.11. Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock . . . 43
SECTION 4.12. Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries. . . . . . . . 45
SECTION 4.13. Limitations on Layering Indebtedness;
Redeemable Stock; Liens Securing Indebtedness. . . 46
SECTION 4.14. Limitation on Sales of Assets and Subsidiary
Stock. . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.15. Waiver of Stay, Extension or Usury Laws. . . . . . . 48
SECTION 4.16. Rule 144A Information Requirement. . . . . . . . . . 48
SECTION 4.17. Limitations on Lines of Business . . . . . . . . . . 48
ARTICLE V
SUCCESSOR CORPORATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.1. Limitation on Merger, Sale or Consolidation. . . . . 49
SECTION 5.2. Successor Corporation Substituted. . . . . . . . . . 50
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.1. Events of Default. . . . . . . . . . . . . . . . . . 50
SECTION 6.2. Acceleration of Maturity Date; Rescission
and Annulment. . . . . . . . . . . . . . . . . . . 52
SECTION 6.3. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . 54
SECTION 6.4. Trustee May File Proofs of Claim . . . . . . . . . . 54
SECTION 6.5. Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.6. Priorities . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.7. Limitation on Suits. . . . . . . . . . . . . . . . . 56
SECTION 6.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest. . . . . . . . . . 56
SECTION 6.9. Rights and Remedies Cumulative . . . . . . . . . . . 57
SECTION 6.10. Delay or Omission Not Waiver . . . . . . . . . . . . 57
ii
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SECTION 6.11. Control by Holders . . . . . . . . . . . . . . . . . 57
SECTION 6.12. Waiver of Existing or Past Default . . . . . . . . . 58
SECTION 6.13. Undertaking for Costs. . . . . . . . . . . . . . . . 58
SECTION 6.14. Restoration of Rights and Remedies . . . . . . . . . 58
ARTICLE VII
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.1. Duties of Trustee. . . . . . . . . . . . . . . . . . 59
SECTION 7.2. Rights of Trustee. . . . . . . . . . . . . . . . . . 60
SECTION 7.3. Individual Rights of Trustee . . . . . . . . . . . . 61
SECTION 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . 61
SECTION 7.5. Notice of Default. . . . . . . . . . . . . . . . . . 62
SECTION 7.6. Reports by Trustee to Holders. . . . . . . . . . . . 62
SECTION 7.7. Compensation and Indemnity . . . . . . . . . . . . . 62
SECTION 7.8. Replacement of Trustee . . . . . . . . . . . . . . . 63
SECTION 7.9. Successor Trustee by Merger, Etc. . . . . . . . . .. 64
SECTION 7.10. Eligibility; Disqualification. . . . . . . . . . . . 64
SECTION 7.11. Preferential Collection of Claims Against Company. . 64
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . . . 65
SECTION 8.1. Discharge; Option to Effect Legal Defeasance or
Covenant Defeasance. . . . . . . . . . . . . . . . 65
SECTION 8.2. Legal Defeasance and Discharge . . . . . . . . . . . 65
SECTION 8.3. Covenant Defeasance. . . . . . . . . . . . . . . . . 66
SECTION 8.4. Conditions to Legal or Covenant Defeasance . . . . . 66
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions. . . 67
SECTION 8.6. Repayment to the Company . . . . . . . . . . . . . . 68
SECTION 8.7. Reinstatement. . . . . . . . . . . . . . . . . . . . 68
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . 69
SECTION 9.1. Supplemental Indentures Without Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . 69
SECTION 9.2. Amendments, Supplemental Indentures and Waivers
with Consent of Holders. . . . . . . . . . . . . . 70
SECTION 9.3. Compliance with TIA. . . . . . . . . . . . . . . . . 71
SECTION 9.4. Revocation and Effect of Consents. . . . . . . . . . 71
iii
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SECTION 9.5. Notation on or Exchange of Securities. . . . . . . . 72
SECTION 9.6. Trustee to Sign Amendments, Etc. . . . . . . . . . . 72
SECTION 9.7. Agreement by Representative Under the Credit
Agreement. . . . . . . . . . . . . . . . . . . . . 72
ARTICLE X
RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE. . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.1. Repurchase of Securities at Option of the Holder
Upon a Change of Control . . . . . . . . . . . . . 73
ARTICLE XII
GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.2. Execution and Delivery of Guarantee. . . . . . . . . 77
SECTION 12.3. Certain Bankruptcy Events. . . . . . . . . . . . . . 78
SECTION 12.4. Limitation on Merger, Consolidation, Etc. of
Guarantors; Release of Certain Guarantors. . . . . 78
SECTION 12.5. Future Guarantors. . . . . . . . . . . . . . . . . . 78
ARTICLE XIII
SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.1. Securities Subordinated to Senior Debt. . . . . . . 79
SECTION 13.2. No Payment on Securities in Certain
Circumstances . . . . . . . . . . . . . . . . . . 80
SECTION 13.3. Securities Subordinated to Prior Payment of All
Senior Debt on Dissolution, Liquidation or
Reorganization. . . . . . . . . . . . . . . . . . 81
SECTION 13.4. Securityholders to Be Subrogated to Rights of
Holders of Senior Debt. . . . . . . . . . . . . . 82
SECTION 13.5. Obligations of the Company and the Guarantors
Unconditional . . . . . . . . . . . . . . . . . . 82
SECTION 13.6. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice . . . . . . . . . 83
SECTION 13.7. Application by Trustee of Assets Deposited with
It. . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.8. Subordination Rights Not Impaired by Acts or
Omissions of the Company, the Guarantors or
Holders of Senior Debt. . . . . . . . . . . . . . 84
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SECTION 13.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities . . . . . . . . . . . 84
SECTION 13.10. Right of Trustee to Hold Senior Debt. . . . . . . . 84
SECTION 13.11. Article XIII Not to Prevent Events of Default . . . 85
SECTION 13.12. No Fiduciary Duty of Trustee to Holders of
Senior Debt . . . . . . . . . . . . . . . . . . . 85
ARTICLE XIV
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 14.1. TIA Controls. . . . . . . . . . . . . . . . . . . . 85
SECTION 14.2. Notices . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 14.3. Communications by Holders with Other Holders. . . . 86
SECTION 14.4. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . 87
SECTION 14.5. Statements Required in Certificate or Opinion . . . 87
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar . . . . . 87
SECTION 14.7. Legal Holidays. . . . . . . . . . . . . . . . . . . 88
SECTION 14.8. Governing Law . . . . . . . . . . . . . . . . . . . 88
SECTION 14.9. No Adverse Interpretation of Other Agreements . . . 88
SECTION 14.10. No Recourse Against Others. . . . . . . . . . . . . 88
SECTION 14.11. Successors. . . . . . . . . . . . . . . . . . . . . 89
SECTION 14.12. Duplicate Originals . . . . . . . . . . . . . . . . 89
SECTION 14.13. Severability. . . . . . . . . . . . . . . . . . . . 89
SECTION 14.14. Table of Contents, Headings, Etc. . . . . . . . . . 89
SECTION 14.15. Qualification of Indenture. . . . . . . . . . . . . 89
SECTION 14.16. Registration Rights . . . . . . . . . . . . . . . . 90
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
EXHIBIT A
[FORM OF SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
v
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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.3
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7(a);
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
vi
TIA INDENTURE
SECTION SECTION
------- ---------
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b),
. . . . . . . . . . . . . . . . . . . . . . . . . . . . (c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
316(a)(last sentence). . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
__________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
vii
INDENTURE, dated as of May 4, 1998, by and among Sun Healthcare Group,
Inc., a Delaware corporation (the "COMPANY"), the Guarantors referred to below
and U.S. Bank Trust National Association, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's
9 3/8% Series A Senior Subordinated Notes due 2008 and the class of 9 3/8%
Series B Senior Subordinated Notes due 2008 to be exchanged for the 9 3/8%
Series A Senior Subordinated Notes due 2008:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"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 purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"APPROVED JURISDICTION" means the United States of America, Canada,
the United Kingdom and any other member nation of the Organization for Economic
Development and Cooperation.
"ASSET SALE" means (i) the sale, lease, conveyance or other
disposition of any assets, including, without limitation, by way of a sale and
leaseback or by merger or consolidation (PROVIDED that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole will be governed by the Section
5.1 or 11.1 and not by Section 4.14), and (ii) the issuance or sale by the
Company or any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause
(i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $5 million or (b)
for Net Proceeds in excess of $5 million. Notwithstanding the foregoing: (a)
a transfer of assets by the Company to a Subsidiary or by a Subsidiary to the
Company or to another Subsidiary, (b) an issuance of Equity Interests by a
Subsidiary to the Company or to another Subsidiary, and (c) a Nursing
Facility Swap will not be deemed to be an Asset Sale.
"ASSET SALE OFFER" shall have the meaning specified in Section 4.14.
"ASSET SALE PAYMENT" shall have the meaning specified in Section 4.14.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"CAREERSTAFF COMPANY" means (i) CareerStaff Unlimited, Inc., a
Delaware corporation and a Wholly Owned Subsidiary of the Company, and its
direct and indirect Wholly Owned Subsidiaries (collectively, "CareerStaff
Unlimited") so long as such persons conduct no material business except
acquiring, holding or selling equity or other interests in other CareerStaff
Companies or (ii) any Subsidiary of the Company (a) in which CareerStaff
Unlimited is the general partner, (b) which is no less than 5% and no more than
10% owned by persons that are not Affiliates of the Company and (c)
substantially all of whose business consists of temporary therapy staffing.
2
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the government of an
Approved Jurisdiction or any agency or instrumentality thereof having maturities
of not more than one year from the date of acquisition, (iii) certificates of
deposit with maturities of one year or less from the date of acquisition,
bankers' acceptances (or, with respect to foreign banks, similar instruments)
with maturities not exceeding one year and overnight bank deposits, in each case
with any domestic commercial bank organized under the laws of the United States
of America or any state thereof or the District of Columbia, or any United
States branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $500 million, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from ▇▇▇▇▇'▇ or
S&P and in each case maturing within one year after the date of acquisition, and
(vi) investments in money market funds which invest substantially all their
assets in securities of the types described in the foregoing clauses (i) through
(v).
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of
the Company and its Subsidiaries taken as a whole to any Person or group (as
such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
other than to a Person or group who, prior to such transaction, held a
majority of the voting power of the voting stock of the Company, (ii) the
acquisition by any Person or group (as defined above) of a direct or indirect
interest in more than 50% of the voting power of the voting stock of the
Company, by way of merger or consolidation or otherwise, or (iii) the first
day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL PAYMENT" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning specified in
Section 11.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMENCEMENT DATE" shall have the meaning specified in Section 2.14.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus,
without duplication, the sum of (i) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period,
3
to the extent such provision for taxes was included in computing such
Consolidated Net Income, (ii) the Fixed Charges of such Person and its
Subsidiaries for such period, to the extent that such Fixed Charges were
deducted in computing such Consolidated Net Income, (iii) depreciation and
amortization (including amortization of goodwill and other intangibles) of
such Person and its Subsidiaries for such period to the extent that such
depreciation and amortization were deducted in computing such Consolidated
Net Income, and (iv) other non-cash items of such Person and its Subsidiaries
for such period to the extent such non-cash items were deducted in computing
such Consolidated Net Income, less the amount of all cash payments made by
such person or any of its Subsidiaries during such period to the extent such
payments relate to non-cash charges that were added back in determining
Consolidated Cash Flow for such period or any prior period, in each case on a
consolidated basis and determined in accordance with GAAP. Notwithstanding
the foregoing, the provision for taxes on the income or profits of, the
depreciation and amortization of, and the other non-cash items of, a
Subsidiary of the referent Person shall be added to Consolidated Net Income
to compute Consolidated Cash Flow only to the extent (and in the same
proportion) that the Net Income of such Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such 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 that Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis; PROVIDED that (i) the Net Income, if
positive, of any Person that is not a Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a Wholly
Owned Subsidiary thereof, but in any case not in excess of such Person's pro
rata share of such Person's Net Income for such period, (ii) the Net Income, if
positive, of any Subsidiary shall be excluded to the extent that the declaration
or payment of dividends or similar distributions by that Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of Preferred Stock (other than Redeemable Stock), less all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made in accordance with
GAAP as a result of the acquisition of such business) subsequent to the date of
this Indenture in the book value of any asset
4
owned by such Person or a consolidated Subsidiary of such Person, and
excluding the cumulative effect of a change in accounting principles, all as
determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"CORPORATE TRUST OFFICE" means the office of the Trustee in the
Borough of Manhattan, The City of New York.
"COVENANT DEFEASANCE" shall have the meaning specified in Section 8.3.
"CREDIT AGREEMENT" means that certain Credit Agreement, dated as of
October 8, 1997, and as amended by the First Amendment thereto dated November
12, 1997 and the Second Amendment thereto dated March 27, 1997, by and among the
Company and NationsBank of Texas, N.A. and the other banks that are parties
thereto, providing for availability of up to $1.2 billion of loans to the
Company in the following components: (a) a revolving credit facility of up to
$500.0 million and (b) three term loans in the amounts of $200.0 million,
$250.0 million and $250.0 million, respectively, including any related notes,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, increased, modified, extended, renewed,
refunded, replaced or refinanced, in whole or in part, from time to time.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event or condition that is or with the passage of
time or the giving of notice or both would be an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DEFEASANCE TRUST" shall have the meaning specified in Section 8.4.
"DEFINITIVE SECURITIES" means Securities that are in the form of
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 3 and 6 thereof.
"DEPOSITORY" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.3 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
5
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" shall have the meaning specified in Section 6.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXCHANGE SECURITIES" means the 9 3/8% Series B Senior Subordinated
Notes due 2008, as supplemented from time to time in accordance with the terms
hereof, to be issued pursuant to this Indenture in connection with the offer to
exchange Securities for the Initial Securities that may be made by the Company
and the Guarantors pursuant to the Registration Rights Agreement that contains
the information referred to in footnotes 1 and 2 to the form of Security
attached hereto as Exhibit A.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture, until such amounts are
repaid.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that such
Person or any of its Subsidiaries incurs, assumes, guarantees, redeems or repays
any Indebtedness (other than revolving credit borrowings) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee, redemption or
repayment of Indebtedness, or such issuance or redemption of Preferred Stock, as
if the same had occurred at the beginning of the applicable Reference Period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Subsidiaries,
including through mergers or consolidations and including any related financing
transactions, during the Reference Period or subsequent to such Reference Period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the Reference Period, and (ii) the Consolidated Cash Flow and Fixed
Charges attributable to operations or businesses disposed of prior to the
Calculation Date shall be excluded (but in the case of Fixed Charges, only to
the extent that the obligations giving rise to such Fixed Charges would no
longer be obligations contributing to such Person's Fixed Charges subsequent to
the Calculation Date).
"FIXED CHARGES" means, with respect to any Person for any period, the
sum (without duplication and determined in each case in accordance with GAAP) of
(i) the consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of
6
all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letters of credit
or bankers' acceptance financings, and net payments (if any) pursuant to
Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Subsidiaries that was capitalized during such period, and
(iii) interest under any guarantee by such Person or any of its Subsidiaries
of Indebtedness of any other Person in the amount of interest attributable to
the Indebtedness guaranteed and (iv) the product of (a) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Subsidiary) on any series of Preferred Stock of such Person or any of its
Subsidiaries, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP; PROVIDED that in
the event any cash dividend payment is deductible for federal, state and/or
local tax purposes, the amount of the tax deduction relating to such cash
dividend payment for such period shall be subtracted from the Fixed Charges
for such Person for such period.
"FOREIGN COMPANIES" means any Subsidiary of the Company which (i) is
not organized under the laws of the United States, any state thereof or the
District of Columbia and (ii) conducts substantially all of its business
operations in a country other than the United States of America.
"FUTURE SUBSIDIARY GUARANTOR" shall have the meaning specified in
Section 12.5.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, applied on a consistent basis and as in effect from time to time.
"GLOBAL SECURITY" means a Security that contains the information
referred to in footnotes 3 and 8 to the form of Security attached hereto as
Exhibit A.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTEE" shall have the meaning provided in Section 12.1.
"GUARANTORS" means (i) the Present Subsidiary Guarantors and (ii) any
Future Subsidiary Guarantors that become Guarantors pursuant to the terms of
this Indenture, but excluding (a) any Persons whose Guarantees have been
released pursuant to the terms of this Indenture.
7
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts or currency swap agreements and (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Security
is registered on the Registrar's books.
"INCUR" or "INCUR" shall have the meaning specified in Section 4.11 of
this Indenture.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) any Redeemable Stock of such Person, (ii) any liabilities and obligations of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, (iii) all liabilities and
obligations of any other Person secured by a Lien on any asset of such Person,
whether or not such indebtedness is assumed by such Person (the amount thereof
being deemed to equal such asset's fair market value), and (iv) to the extent
not otherwise included, the guarantee by such Person of any liabilities or
obligations of any other Person of the kind described in the preceding clauses
(i)-(iii).
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INITIAL PURCHASERS" means Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇▇▇, Lufkin
& ▇▇▇▇▇▇▇▇ Securities Corporation, ▇.▇. ▇▇▇▇▇▇ Securities Inc., NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities LLC and ▇▇▇▇▇▇▇▇ & Co Inc., severally, and not jointly.
"INITIAL SECURITIES" means the 9 3/8% Series A Senior Subordinated
Notes due 2008, as supplemented from time to time in accordance with the terms
hereof, issued under this Indenture that contains the information referred to in
footnotes 1, 2, 4, 5, 6, 7 and 9 to the form of Security attached hereto as
Exhibit A.
"INTEREST PAYMENT DATE" means the stated due date of an installment of
interest on the Securities.
"INVESTMENT" by any Person in any other Person means (without
duplication) (i) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such Person (whether
8
for cash, property, services, securities or otherwise) of capital stock,
bonds, note s, debentures, partnership or other ownership interests or other
securities, including any options or warrants, of such other Person or any
agreement to make any such acquisition; (ii) the making by such Person of any
deposit with, or advance, loan or other extension of credit to, such other
Person (including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property
to such other Person) or any commitment to make any such advance, loan or
extension (but excluding accounts receivable or deposits arising in the
ordinary course of business); and (iii) other than guarantees of Indebtedness
of the Company or any Subsidiary to the extent permitted by Section 4.11, the
entering into by such Person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of
such other Person; PROVIDED THAT Investments shall not be deemed to include
extensions of trade credit by such Person or any of its Subsidiaries on
commercially reasonable terms in accordance with normal trade practices of
such Person or such Subsidiary, as the case may be.
"ISSUE DATE" means the date of the first issuance of the Securities
under this Indenture.
"JUNIOR SECURITY" means any Qualified Equity Interests and any
Indebtedness of the Company or a Guarantor, as applicable, that is subordinated
in right of payment to Senior Debt at least to the same extent as the Securities
or the Guarantee, as applicable, and has no scheduled installment of principal
due, by redemption, sinking fund payment or otherwise, on or prior to the
Maturity Date.
"LEGAL DEFEASANCE" shall have the meaning specified in Section 8.2.
"LEGAL HOLIDAY" shall have the meaning specified in Section 13.7.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"LIQUIDATED DAMAGES" means such liquidated damages as defined in the
Registration Rights Agreement.
"MATURITY DATE" means, when used with respect to any Security, the
date specified on such Security as the fixed date on which the final installment
of principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Offer to
Purchase).
9
"MAXIMUM SENIOR REVOLVING DEBT" means Senior Revolving Debt pursuant
to the Credit Agreement in an aggregate principal amount at any time outstanding
(with letters of credit being deemed to have a principal amount equal to the
maximum potential reimbursement obligation of the Company or any such Subsidiary
with respect thereto), and including any Permitted Refinancing Indebtedness
incurred to extend, renew, refinance, defease or refund any such Indebtedness,
incurred under clause (i)(a) of Section 4.11, not to exceed an amount equal to
$500.0 million.
"MAXIMUM SENIOR TERM DEBT" means loans outstanding with respect to any
term loan facilities contained in the Credit Agreement in an aggregate principal
amount at any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential reimbursement obligation of the
Company or any such Subsidiary with respect thereto), and including any
Permitted Refinancing Indebtedness incurred to extend, renew, refinance, defease
or refund any such Indebtedness, incurred under clause (i)(b) of Section 4.11,
not to exceed an amount equal to $400.0 million.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Services, Inc. and its successors.
"NET INCOME" means, with respect to any Person, the consolidated
net income (loss) of such Person, determined in accordance with GAAP,
excluding, however, the effect of any extraordinary or other material
non-recurring gain or loss outside the ordinary course of business (including
without limitation any gain from the sale or other disposition of assets
outside of the ordinary course of business or from the issuance or sale of
any Equity Interests), together with any related provision for taxes on such
extraordinary or other material non-recurring gain or loss.
"NET PROCEEDS" means the aggregate cash or Cash Equivalent proceeds
received by the Company or any of its Subsidiaries in respect of any Asset Sale,
net of the direct costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and any other expenses incurred or to be incurred by the Company or
a Subsidiary as a direct result of the sale of such assets (including, without
limitation, severance, relocation, lease termination and other similar
expenses), taxes actually paid or due and payable as a result thereof in the
year of sale or the immediately following year (after taking into account the
application of deductions, net operating losses and other tax attributes),
amounts required to be applied to the repayment of Indebtedness (other than
Subordinated Indebtedness) secured by a Lien on the asset or assets that were
the subject of such Asset Sale, any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP and all
distributions and other payments required to be made and actually made to
minority interests holders in Subsidiaries as a result of such Asset Sale;
PROVIDED, that if the instrument or agreement governing such Asset Sale requires
the transferor to maintain a portion of the purchase price in escrow (whether as
a reserve for adjustment of the purchase price or otherwise) or to provide for
indemnification of the transferee for specified liabilities in maximum specified
amount, the portion of the cash or Cash Equivalents that is actually placed in
escrow or segregated and set aside by the transferor for such indemnification
obligations shall not be deemed to be Net Proceeds until the escrow terminates
or the transferor ceases to segregate and set aside such funds, in whole or
10
in part, and then only to the extent of the proceeds released from escrow to
the transferor or that are no longer segregated and set aside by the
transferor.
"NON-CASH CONSIDERATION" means any non-cash or non-Cash Equivalent
consideration received by the Company or a Subsidiary of the Company in
connection with an Asset Sale and any non-cash or non-Cash Equivalent
consideration received by the Company or any of its Subsidiaries upon
disposition thereof.
"NON-QUALIFIED ASSET SALE" means an Asset Sale in which the Non-Cash
Consideration received by the Company and its Subsidiaries exceeds 20% of the
total consideration received in connection with such Asset Sale calculated in
accordance with clause (x), but not clause (y), of the proviso to the first
sentence of Section 4.14.
"NURSING FACILITY" means a nursing facility, hospital, outpatient
clinic, assisted living center, hospice, long-term care facility, subacute care
facility or other facility that is used or useful in the provision of healthcare
services.
"NURSING FACILITY SWAP" means an exchange of assets by the Company or
one or more Subsidiaries of the Company or of the Equity Interests of a
Subsidiary for one or more Nursing Facilities and/or one or more Related
Businesses or of the Equity Interests of any Person owning one or more Nursing
Facilities and/or one or more Related Businesses.
"OBLIGATIONS" means any principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFER AMOUNT" shall have the meaning specified in Section 2.14.
"OFFER PERIOD" shall have the meaning specified in Section 2.14.
"OFFICER" means, with respect to the Company or any Guarantor, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, the Secretary or the Assistant Secretary
of the Company or such Guarantor.
"OFFICERS' CERTIFICATE" means, with respect to the Company or such
Guarantor, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company or such Guarantor and otherwise complying
with the requirements of Sections 14.4 and 14.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
14.4 and 14.5.
"PAYING AGENT" shall have the meaning specified in Section 2.3.
11
"PAYMENT DEFAULT" means any failure to pay any scheduled installment
of principal on any Indebtedness within the grace period provided for such
payment in the documentation governing such Indebtedness.
"PAYMENT NOTICE" shall have the meaning specified in Section 13.2.
"PERMITTED LIENS" means (i) Liens in favor of the Company; (ii) Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company or becomes a
Subsidiary of the Company, PROVIDED that such Liens were in existence prior to
the contemplation of such merger, consolidation or acquisition and do not extend
to any assets other than those of the Person merged into or consolidated with
the Company or that becomes a Subsidiary of the Company; (iii) Liens on property
existing at the time of acquisition thereof by the Company or any Subsidiary of
the Company, PROVIDED that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any property other than
that acquired; (iv) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (v) Liens securing Senior Debt
outstanding under the Credit Agreement, Liens securing Existing Indebtedness,
and Liens on the Equity Interests in or assets of Foreign Companies securing
Indebtedness outstanding under Foreign Company credit agreements; (vi) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, PROVIDED that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (vii) Liens to secure Permitted Refinancing Indebtedness
incurred to refinance Indebtedness that was secured by a Lien permitted under
this Indenture and that was incurred in accordance with the provisions of this
Indenture, PROVIDED that such Liens do not extend to or cover any property or
assets of the Company or any of its Subsidiaries other than assets or property
securing the Indebtedness so refinanced; (viii) Purchase Money Liens; (ix) any
interest or title of a lessor under any Capital Lease Obligation otherwise
permitted by this Indenture; (x) Liens upon specific items of inventory or
equipment and proceeds of the Company or any Subsidiary securing its obligations
in respect of bankers' acceptances issued or created for its account (whether or
not under the Credit Agreement) to facilitate the purchase, shipment, or storage
of such inventory and equipment; (xi) Liens securing reimbursement obligations
with respect to letters of credit (whether or not issued under the Credit
Agreement) otherwise permitted under this Indenture and issued in connection
with the purchase of inventory or equipment by the Company or any Subsidiary in
the ordinary course of business; (xii) Liens to secure (or encumbering deposits
securing) obligations arising from warranty or contractual service obligations
of the Company or any Subsidiary, including rights of offset and setoff; (xiii)
Liens securing Acquired Debt otherwise permitted by this Indenture, PROVIDED
that (A) the Indebtedness secured shall not exceed the fair market value of the
assets so acquired (such fair market value to be determined in good faith by the
Board of Directors of the Company at the time of such acquisition) and (B) such
Indebtedness shall be incurred, and the Lien securing such Indebtedness shall be
created, within 12 months after such acquisition; (xiv) Liens securing Hedging
Obligations agreements relating to Indebtedness otherwise permitted under this
Indenture; (xv) other Liens on assets of the Company or any of its Subsidiaries
securing Indebtedness that
12
is permitted by the terms of this Indenture to be outstanding having an
aggregate principal amount at any one time outstanding not to exceed $5
million; (xvi) Liens on Medicare, Medicaid or other patient accounts
receivable of the Company or its Subsidiaries; (xvii) Liens on real estate
and related personal property (including, but not limited to, sale and
leasebacks of and mortgages on real estate and related personal property) not
to exceed an aggregate amount equal to $60 million per year; (xviii) Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and
other Liens imposed by law incurred in the ordinary course of business; (xix)
easements, rights-of-way, zoning restrictions, reservations, encroachments
and other similar encumbrances in respect of real property; and (xx) Liens
securing stay and appeal bonds or judgment Liens in connection with any
judgment not giving rise to a Default under this Indenture.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Subsidiaries (a) issued in exchange for, or the net
proceeds of which are used solely to extend, refinance, renew, replace, defease
or refund, in whole or in part, or (b) constituting an amendment, modification
or supplement to, or a deferral or renewal of ((a) and (b) above are,
collectively, a "Refinancing"), other Indebtedness of the Company or any of its
Subsidiaries; PROVIDED that: (i) the principal amount of such Permitted
Refinancing Indebtedness does not exceed the lesser of (A) the principal amount
of the Indebtedness so Refinanced and (B) if such Indebtedness being Refinanced
was issued with original issue discount, the accreted value thereof (determined
in accordance with GAAP) (plus, in each case, the amount of any reasonable
expenses incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final stated maturity later than the final stated maturity
of, and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being Refinanced); (iii)
if the Indebtedness being Refinanced is Subordinated Indebtedness, such
Permitted Refinancing Indebtedness has a final stated maturity later than the
final stated maturity of, and is subordinated in right of payment to, the
Securities on terms at least as favorable to the Holders as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (iv) if the obligor on the
Indebtedness being Refinanced is a Subsidiary that is not a Guarantor, such
Permitted Refinancing Indebtedness shall only be incurred by such Subsidiary.
"PERSON" or "PERSON" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership, limited
liability company, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.
"PLAN OF LIQUIDATION" means a plan that provides for, contemplates or
the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company otherwise
than as an entirety or substantially as an entirety and (ii) the distribution of
all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and all or substantially all of the remaining assets of the
Company to holders of Capital Stock of the Company.
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"PREFERRED STOCK" means an Equity Interest of any class or classes of
a Person (however designated) which is preferred as to payments of dividends, or
as to distributions upon any liquidation or dissolution, over Equity Interests
of any other class of such Person.
"PRESENT SUBSIDIARY GUARANTORS" means all the Subsidiaries of the
Company listed on Schedule I to this Indenture.
"PRINCIPAL" of any Indebtedness means the principal of such
Indebtedness plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"PROPERTY" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"PURCHASE AGREEMENT" means that certain Purchase Agreement dated April
29, 1998 by and among the Company, the Guarantors and the Initial Purchasers, as
such agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"PURCHASE DATE" shall have the meaning specified in Section 2.14.
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness of a Person to
any seller or other Person incurred to finance the acquisition or construction
(including in the case of a Capital Lease Obligation, the lease) of any asset or
property which is incurred within 180 days of such acquisition or completion of
construction and is secured only by the assets so financed.
"PURCHASE MONEY LIEN" means a Lien granted on an asset or property to
secure Purchase Money Indebtedness permitted to be incurred under this Indenture
and incurred solely to finance the acquisition of construction of such asset or
property; PROVIDED that such Lien encumbers only such asset or property and is
granted within 180 days of such acquisition or completion of construction.
"QUALIFIED EQUITY INTERESTS" shall mean all Equity Interests of the
Company other than Redeemable Stock of the Company.
"RECORD DATE" means a Record Date specified in the Securities whether
or not such Record Date is a Business Day, or, if applicable, as specified in
Section 2.12.
"REDEEMABLE STOCK" means any Equity Interest that, 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,
matures or is mandatorily redeemable (other than redeemable only for Qualified
Equity Interests of the issuer), pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date on which the Securities mature.
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"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to
Paragraph 5 in the form of Security attached hereto as Exhibit A, which shall
include, without duplication, in each case, accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date.
"REFERENCE PERIOD" with regard to any Person means the four full
fiscal quarters (or such lesser period during which such Person has been in
existence) for which internal financial statements are available ended
immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Securities or this Indenture.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the date hereof by and among the Initial Purchasers,
the Company and the Guarantors, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"RELATED BUSINESS" means the business conducted by the Company and
its Subsidiaries as of the date of this Indenture and any and all healthcare
service businesses that in good faith judgment of the Board of Directors of
the Company are materially related businesses. Without limiting the
generality of the foregoing, Related Business shall include the operation of
Nursing Facilities, long-term and specialty healthcare services, skilled
nursing care, subacute care, rehabilitation programs, pharmaceutical
services, health maintenance organizations, insurance companies, preferred
provider organizations or any other form of managed care business, health
care information services business, distribution of medical supplies,
geriatric care and home healthcare or other businesses which provide
ancillary services to long-term and specialty healthcare facilities.
"REPRESENTATIVE" means NationsBank of Texas, N.A., as
representative of the lenders party to the Credit Agreement, until a
successor replaces it pursuant to the Credit Agreement, and thereafter means
such successor.
"RESTRICTED INVESTMENT" means, in one or a series of related
transactions, any Investment, other than (i) Investments in Cash Equivalents,
(ii) Investments in a Subsidiary of the Company, (iii) Investments in any Person
that as a consequence of such Investment becomes a Subsidiary of the Company,
(iv) Investments existing on the date of this Indenture, (v) accounts
receivable, advances, loans, extensions of credit created or acquired in the
ordinary course of business, (vi) Investments made as a result of the receipt of
Non-Cash Consideration from an Asset Sale that was made pursuant to Section
4.14, (vii) Investments made as the result of the guarantee by the Company or
any of its Subsidiaries of Indebtedness of a Person or Persons other
15
than the Company or any Subsidiary of the Company that is secured by Liens on
assets sold or otherwise disposed of by the Company or such Subsidiary to
such Person or Persons, provided that such Indebtedness was in existence
prior to the contemplation of such sale or other disposition and that the
terms of such guarantee permit the Company or such Subsidiary to foreclose on
the pledged or mortgaged assets if the Company or such Subsidiary is required
to perform under such guarantee, and (viii) Investments in any Related
Business.
"RESTRICTED SECURITY" means a Security, unless or until it has been
(i) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering it or (ii) distributed to
the public pursuant to Rule 144 (or any similar provision then in force)
under the Securities Act; PROVIDED, that in no case shall an Exchange
Security issued in accordance with this Indenture and the terms and
provisions of the Registration Rights Agreement be a Restricted Security.
"S&P" means Standard & Poor's, a division of The McGraw Hill
Companies, and its successors.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the Initial Securities and, when
and if issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"SECURITIES CUSTODIAN" means the Trustee, as custodian with respect
to the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means the Person in whose name a
Security is registered on the Registrar's books.
"SENIOR DEBT" of the Company or any Guarantor means Indebtedness
(including any monetary obligation in respect of the Credit Agreement, and
interest, whether or not allowable, accruing on Indebtedness incurred
pursuant to the Credit Agreement after the filing of a petition initiating
any proceeding under any bankruptcy, insolvency or similar law) of the
Company or such Guarantor unless, by the terms of the instrument creating or
evidencing such indebtedness, it is expressly designated not to be senior in
right of payment to the Securities or the applicable Guarantee; PROVIDED that
in no event shall Senior Debt include (i) Indebtedness to any Subsidiary of
the Company or any officer, director or employee of the Company or any
Subsidiary of the Company, (ii) Indebtedness incurred in violation of the
terms of this Indenture, (iii) Indebtedness to trade creditors, (iv)
Redeemable Stock and (v) any liability for taxes owed or owing by the Company
or such Guarantor.
16
"SENIOR REVOLVING DEBT" means revolving credit loans and letters of
credit outstanding from time to time under the Credit Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 or Regulation
S-X, promulgated pursuant to the Act, as such Regulation is in effect on the
date of this Indenture.
"SPECIAL RECORD DATE" for payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"STOCKHOLDERS' EQUITY" means, with respect to any Person as of any
date, the stockholders' equity of such Person determined in accordance with
GAAP as of the date of the most recent available internal financial
statements of such Person, and calculated on a pro forma basis to give effect
to any acquisition or disposition by such person consummated or to be
consummated since the date of such financial statements and on or prior to
the date of such calculation.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment to the Securities or such
Subsidiary's Guarantee of the Securities, as applicable.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, joint venture, trust or other Person of which (or in which) more
than 50% of (i) the outstanding capital stock having voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether at the time capital of any other class or classes shall or might have
voting power upon the occurrence of any contingency), (ii) the ownership
interests having voting power to elect persons performing functions similar
to the board of directors, (iii) the interest in the capital or profits of
such partnership or joint venture, (iv) the beneficial interest of such
trust, or (v) the equity interest of such other Person, is at the time
directly or indirectly owned by such Person, by such Person and one or more
of its Subsidiaries or by one or more of such Person's Subsidiaries.
"SUN SYSTEMS, INC." means Sun Systems, Inc., a Delaware
corporation, in which the Company expects to have the right to acquire a
majority of the outstanding Equity Interests.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S.
Code Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture, except as provided in Section 9.3.
"TRANSFER RESTRICTED SECURITIES" means Securities that bear or are
required to bear the legend set forth in Section 2.6.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
17
"TRUST OFFICER" means any officer within the corporate trust
division (or any successor group) of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect
to a particular corporate trust matter, any other officer of the Trustee to
whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"U.K. CREDIT AGREEMENTS" means (i) that certain Facility Agreement,
dated as of August 30, 1996, between Ashbourne plc, Ashbourne Homes
(Developments) Limited, Ashbourne Homes plc, Larstrike Limited, Sedbury Park
Limited (collectively, the "Ashbourne Group"), The Governor and Company of
the Bank of Scotland, and the other banks and financial institutions that are
parties thereto, providing for L25,000,000 in aggregate principal amount of
revolving credit; (ii) that certain Facility Agreement, dated as of August
30, 1996, between the Ashbourne Group, Midland Bank plc, and the other banks
and financial institutions that are parties thereto, providing for
L25,000,000 in aggregate principal amount of revolving credit and (iii) that
certain Credit Facility Agreement with Lloyds Bank plc in the aggregate
principal amount of up to L14.0 million, including in (i), (ii) and (iii)
above, any related notes, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, increased,
modified, extended, renewed, refunded, replaced or refinanced, in whole or in
part, from time to time.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America
for the payment of which obligation or guarantee the full faith and credit of
the United States of America is pledged.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity, or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one twelfth)
that will elapse between such date and the making of such payment, by (ii)
the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
18
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company, each
Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision; and
(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
19
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto,
which Exhibit is part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not
contained in the form of Security attached as Exhibit A hereto shall be
delivered in writing to the Trustee. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby. The Company's seal shall be impressed, affixed, printed
or reproduced on the Securities and may be in facsimile.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless
and the Company shall nevertheless be bound by the terms of the Securities
and this Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Initial Securities for original
issue in the aggregate principal amount of up to $125,000,000 (or up to
$150,000,000 if the over-allotment option is exercised) and shall
authenticate Exchange Securities for original issue in the aggregate
principal amount of up to $125,000,000 (or up to $150,000,000 if the
over-allotment option is exercised), in each case upon a written order of the
Company in the form of an Officers' Certificate; PROVIDED that such Exchange
Securities shall be issuable only upon the valid surrender for cancellation
of Initial Securities of a like aggregate principal amount in accordance with
the Registration Rights Agreement. The Officers' Certificate shall specify
the amount of Securities to be authenticated and the date on which the
Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $125,000,000 (or
$150,000,000 if the over-
20
allotment option is exercised), except as provided in Section 2.7. Upon the
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Securities in substitution of Securities
originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating Agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
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 an Agent to deal with the Company, any Affiliate of the
Company, or any of their respective Subsidiaries.
Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiples thereof.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), and an office or
agency where Securities may be presented for payment ("PAYING AGENT"), and
where notices and demands to or upon the Company in respect of the Securities
may be served. The Company may act as Registrar or Paying Agent, except
that, for the purposes of Articles III, VIII, XI, and Section 4.14 hereof and
as otherwise specified in this Indenture, neither the Company nor any
Affiliate of the Company shall act as 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 and the term "Paying Agent"
includes any additional Paying Agent. The Company hereby initially appoints
the Trustee as Registrar and Paying Agent, and by its acknowledgment and
acceptance on the signature page hereto, the Trustee hereby initially agrees
so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent (including the Paying Agent) not a party to this
Indenture, which agreement shall implement the provisions of this Indenture
that relate to such Agent, and shall furnish a copy of each such agreement to
the Trustee. The Company shall promptly notify the Trustee in writing 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.
The Company initially appoints The Depository Trust Company
("DTC"), to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
21
Upon the occurrence of an Event of Default described in Section
6.1(viii) or (ix) hereof, the Trustee shall, or upon the occurrence of any
other Event of Default by notice to the Company, the Registrar and the Paying
Agent, the Trustee may assume the duties and obligations of the Registrar and
the Paying Agent hereunder.
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, premium, if any, or interest on, the Securities
(whether such assets have been distributed to it by the Company or any other
obligor on the Securities), and shall notify the Trustee in writing of any
Default in making any such payment. If either of the Company or a Subsidiary
of the Company acts as Paying Agent, it shall segregate such assets and hold
them as a separate trust fund for the benefit of the Holders or the Trustee.
The Company at any time may require a Paying Agent to distribute all assets
held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default or any
Event of Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for
any assets distributed. Upon distribution to the Trustee of all assets that
shall have been delivered by the Company to the Paying Agent, the Paying
Agent (if other than the Company) shall have no further liability for such
assets.
SECTION 2.5. 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 Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee or any Paying Agent is not the Registrar, the Company shall furnish
to the Trustee on or before the third Business Day preceding each Interest
Payment Date and at such other times as the Trustee or any such Paying Agent
may request in writing a list in such form and as of such date as the Trustee
or any such Paying Agent reasonably may require of the names and addresses of
Holders and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES.
When Definitive Securities are presented to the 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,
22
the Registrar shall register the transfer or make the exchange as requested
if its reasonable requirements for such transaction are met; PROVIDED,
HOWEVER, that the Definitive Securities surrendered for registration of
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, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
(ii) in the case of Transfer Restricted Securities that
are Definitive Securities, shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is 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 (in substantially the form set forth on the reverse
of the Security); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (within the
meaning of Rule 144A promulgated under the Securities Act), that is
aware that any sale of Securities to it will be made in reliance on
Rule 144A under the Securities Act and that is acquiring such
Transfer Restricted Security for its own account or for the account
of another such "qualified institutional buyer," a certification
from such Holder to that effect (in substantially the form set
forth on the reverse of the Security); or
(C) if such Transfer Restricted Security is being
transferred pursuant to an exemption from registration in
accordance with Rule 144, or outside the United States in an
offshore transaction in compliance with Rule 904 under the
Securities Act, or pursuant to an effective registration statement
under the Securities Act, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the
Security); or
(D) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the registration
requirements of the Securities Act and with all applicable
securities laws of the States of the United States, a certification
from such Holder to that effect (in substantially the form set
forth on the reverse of the Security) and an Opinion of Counsel
reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act.
(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 Global Security except upon
satisfaction of the requirements set forth below. Upon receipt
23
by the Trustee of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the
reverse of the Security, that such Definitive Security is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under the
Securities Act; and
(ii) whether or not such Definitive Security is a
Transfer Restricted Security, written instructions directing the Trustee
to make, or to direct the Securities Custodian to make, an endorsement
on the Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security,
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 Depositary and the
Securities Custodian, the aggregate principal amount of Securities
represented by the Global Security to be increased accordingly. If no Global
Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate a new Global Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any) and
the procedures of the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL
SECURITY FOR A DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Security, and upon receipt by
the Trustee of a written instruction or such other form of instructions
as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest in a Transfer Restricted
Security only, the following additional information and documents (all
of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the beneficial
owner, a certification from the transferor that effect (in
substantially the form set forth on the reverse of the Security); or
24
(B) if such beneficial interest is being transferred to
a "qualified institutional buyer" (within the meaning of Rule 144A
promulgated under the Securities Act), that is aware that any sale
of Securities to it will be made in reliance on Rule 144A under the
Securities Act and that is acquiring such beneficial interest in
the Transfer Restricted Security for its own account or the account
of another such "qualified institutional buyer", a certification to
that effect from the transferor (in substantially the form set
forth on the reverse of the Security); or
(C) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with Rule
144, or outside the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act, or pursuant to
an effective registration statement under the Securities Act, a
certification from the transferor to that effect (in substantially
the form set forth on the reverse of the Security); or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act and in accordance with all applicable securities
laws of the States of the United States, a certification to that
effect from the transferor (in substantially the form set forth on
the reverse of the Security) or an Opinion of Counsel from the
transferee or transferor reasonably acceptable to the Company and
to the Registrar to the effect that such transfer is in compliance
with the Securities Act,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian,
the aggregate principal amount of the Global Security to be reduced and,
following such reduction, the Company will execute and, upon receipt of
an authentication order in the form of an Officers' Certificate, the
Trustee's authenticating Agent will authenticate and deliver to the
transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Securities to the persons in whose names
such Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL
SECURITIES. Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in subsection (f) of this Section 2.6), a
Global Security may not be transferred as a whole except by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
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(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE
OF DEPOSITARY. If at any time:
(i) the Depositary for the Securities notifies the
Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Securities and a successor Depositary for the
Global Securities is not appointed by the Company within ninety days
after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive
Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive
Securities, will, or its authenticating Agent will, authenticate and deliver
Definitive Securities, in an aggregate principal amount equal to the
principal amount of the Global Securities, in exchange for such Global
Securities.
(g) LEGENDS.
(i) Except as permitted by the following paragraph (ii),
each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the following
form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT)(A "QIB"), OR (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING
THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL
NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING
INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES
ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE
DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLI-
26
ANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE STATE SECURITIES LAWS OR (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF 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 Act or an effective
registration statement under the Act:
(A) in the case of any Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(B) any such Transfer Restricted Security represented by
a Global Security shall not be subject to the provisions set forth
in (i) above (such sales or transfers being subject only to the
provisions of Section 2.6(c) hereof; PROVIDED, HOWEVER, that with
respect to any request for an exchange of a Transfer Restricted
Security that is represented by a Global Security for a Definitive
Security that does not bear a legend, which request is made in
reliance upon Rule 144, the Holder thereof shall certify in writing
to the Registrar that such request is being made pursuant to Rule
144 (such certification to be substantially in the form set forth
on the reverse of the Security).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY.
At such time as all beneficial interests in a Global Security have either
been exchanged for Definitive Securities, redeemed, repurchased or cancelled,
such Global Security shall be returned to or
27
retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged
for Definitive Securities, redeemed, repurchased or cancelled, the principal
amount of Securities represented by such Global Security shall be reduced and
an endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES
OF DEFINITIVE SECURITIES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee or any authenticating agent of
the Trustee shall authenticate Definitive Securities and Global
Securities at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes, assessments, or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.2 (fourth
paragraph), 2.10, 3.7, 2.14 (subparagraph 8), 9.5, or 11.1 hereof.
(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 III, 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 pursuant to Article XI or Section
4.14 hereof or redemption of Securities pursuant to Article III hereof and
ending at the close of business on the day of such mailing.
(iv) 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 Depositary participants or beneficial owners of interests
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 thereof.
SECTION 2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other
28
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced. In the case of any lost Security that
will become due and payable within 30 days, the Company can choose to pay
such Security rather than replacing such Security. The Company may charge
such Holder for its reasonable, out-of-pocket expenses in replacing a
Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected
by the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security, except as provided in
Section 2.9 hereof.
If a Security is replaced pursuant to Section 2.7 hereof (other
than a mutilated Security surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a BONA FIDE purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement
thereof pursuant to Section 2.7 hereof.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or an Affiliate of the Company) holds cash sufficient
to pay all of the principal and interest and premium, if any, due on the
Securities payable on that date and payment of the Securities called for
redemption is not otherwise prohibited, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver
or consent, Securities owned by the Company or Affiliates of the Company
shall be disregarded, except that, for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, amendment,
supplement, waiver or consent, only Securities that a Trust Officer of the
Trustee knows are so owned shall be disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until Definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but
may have variations that the Company reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the
29
Company shall prepare and the Trustee shall, upon receipt of a written order
of the Company in the form of an Officers' Certificate, authenticate
Definitive Securities in exchange for temporary Securities. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as permanent Securities authenticated and
delivered hereunder.
SECTION 2.11. 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, transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent (other than the Company or an Affiliate of the
Company), and no one else, shall cancel and, unless directed otherwise, shall
dispose of all Securities surrendered for transfer, exchange, payment or
cancellation. The Trustee shall provide evidence of destruction to the
Company. Subject to Section 2.7 hereof, the Company may not issue new
Securities to replace Securities that have been paid or delivered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities cancelled as provided in this Section 2.11
hereof, except as expressly permitted in the form of Securities and as
permitted by this Indenture.
SECTION 2.12. DEFAULTED INTEREST.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus any
interest payable on the defaulted interest at the rate and in the manner
provided in Section 4.1 hereof and the Security (herein called "DEFAULTED
INTEREST"), shall forthwith cease to be payable to the registered holder on
the relevant Record Date, or, as applicable, the Special Record Date (as
defined below), and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Securities (or
their respective predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee and the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit
with the Paying Agent an amount of cash equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Paying Agent for such deposit prior to
the date of the proposed payment, such cash when deposited to be held in
trust for the benefit of the
30
persons entitled to such Defaulted Interest as provided in this clause
(1). Thereupon the Paying Agent shall fix a special record date for the
payment of such Defaulted Interest (a "SPECIAL RECORD DATE"), which
shall be not more than 15 days, and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt
by the Paying Agent of the notice of the proposed payment. The Paying
Agent Trustee shall promptly notify the Company and the Trustee of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at his address as it appears in the Security
register not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective predecessor Securities) are registered
on such Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee and the Paying Agent of the proposed payment
pursuant to this clause, such manner shall be deemed practicable by the
Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon the registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED 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 will
promptly notify the Trustee of any change in the "CUSIP" numbers.
SECTION 2.14. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that the Company shall commence an Asset Sale Offer
pursuant to Section 4.14 hereof, it shall follow the procedures specified below.
31
No later than 10 days following the date on which the aggregate amount
of Excess Proceeds exceeds $25 million, the Company shall notify the Trustee of
such Asset Sale Offer and provide the Trustee with an Officers' Certificate
setting forth, in addition to the information to be included therein pursuant to
Section 4.14 hereof, the calculations used in determining the amount of Net
Proceeds to be applied to the purchase of Securities. The Company shall
commence or cause to be commenced such Asset Sale Offer on a date no later than
20 days after such notice (the "COMMENCEMENT DATE").
The Asset Sale Offer shall remain open for at least 20 Business Days
after the Commencement Date relating to such Asset Sale Offer and shall remain
open for no more than such 20 Business Days, except to the extent required by
applicable law (as so extended, the "OFFER PERIOD"). No later than three
Business Days after the termination of the Offer Period (the "PURCHASE DATE"),
the Company shall purchase the principal amount (the "OFFER AMOUNT") of
Securities required to be purchased in such Asset Sale Offer pursuant to Section
4.14 hereof or, if less than the Offer Amount has been tendered, all Securities
tendered in response to the Asset Sale Offer, in each case for an amount in cash
equal to the Asset Sale Payment (as defined herein).
If the Purchase Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest shall
be paid to the Person in whose name a Security is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Securities pursuant to the Asset Sale Offer.
On the Commencement Date of any Asset Sale Offer, the Company shall
send or shall cause to be sent by first class mail, a notice to each of the
Holders at their last registered address, with a copy to the Trustee and the
Paying Agent, offering to repurchase the Securities held by such Holder pursuant
to the procedure specified in such notice. Such notice, which shall govern the
terms of the Asset Sale Offer, shall contain all instructions and materials
necessary to enable the Holders to tender Securities pursuant to the Asset Sale
Offer and shall state:
(1) that the Asset Sale Offer is being made
pursuant to this Section 2.14 and Section
4.14 hereof and the length of time the Asset
Sale Offer shall remain open;
(2) the Offer Amount, the Asset Sale Payment and
the Purchase Date;
(3) that any Security not tendered or accepted
for payment shall continue to accrue
interest;
(4) that, unless the Company defaults in the
payment of the Purchase Price, any Security
accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest
after the Purchase Date;
(5) that Holders electing to have a Security
purchased pursuant to any Asset Sale Offer
shall be required to surrender the Security,
with the form
32
entitled "Option of Holder to
Elect Purchase" on the reverse of the
Security completed, to the Company, a
depositary, if appointed by the Company, or a
Paying Agent at the address specified in the
notice prior to the close of business on the
Business Day next preceding the Purchase
Date;
(6) that Holders shall be entitled to withdraw
their election if the Company, depositary or
Paying Agent, as the case may be, receives,
not later than the close of business on the
Business Day next preceding the termination
of the Offer Period, a facsimile transmission
or letter setting forth the name of the
Holder, the principal amount of the Security
the Holder delivered for purchase and a
statement that such Holder is withdrawing his
election to have such Security purchased;
(7) that, if the aggregate principal amount of
Securities surrendered by Holders exceeds the
Offer Amount, the Trustee shall select the
Securities to be purchased on a PRO RATA
basis (with such adjustments as may be deemed
appropriate by the Trustee so that only
Securities in denominations of $1,000, or
integral multiples thereof, shall be
purchased); and
(8) that Holders whose Securities were purchased
only in part shall be issued new Securities
equal in principal amount to the unpurchased
portion of the Securities surrendered.
On the Purchase Date, the Company shall, to the extent lawful, (i)
accept for payment, on a PRO RATA basis to the extent necessary, an aggregate
principal amount equal to the Offer Amount of Securities and other Indebtedness
ranking on a parity with the Securities whose provisions require the Company to
make an offer to purchase or redeem such Indebtedness with proceeds from any
asset sales tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Securities and other Indebtedness or portions
thereof so tendered, (ii) deposit with the Paying Agent an amount equal to the
Purchase Price in respect of all Securities and other Indebtedness or portions
thereof so tendered but which does not exceed the Offer Amount and (iii) deliver
or cause to be delivered to the Trustee the Securities and other Indebtedness so
accepted together with an Officers' Certificate stating the aggregate principal
amount of Securities and other Indebtedness or portions thereof being purchased
by the Company. The Paying Agent shall promptly mail to each Holder of
Securities so tendered payment in an amount equal to the Purchase Price for such
Securities and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) a new Security to such Holder equal in principal
amount to any unpurchased portion of the Securities surrendered, if any;
PROVIDED that each such new Security shall be in a principal amount of $1,000 or
an integral multiple thereof. The Company shall publicly announce the results
of the Asset Sale Offer on or as soon as practicable after the Purchase Date.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and
33
regulations are applicable in connection with the purchase
of Securities and other Indebtedness as a result of the Asset Sale Offer. To
the extent the provisions of any such rule conflict with the provisions of this
Indenture relating to an Asset Sale Offer, the Company shall comply with the
provisions of such rule and be deemed not to have breached its obligations
relating to the Asset Sale Offer by virtue thereof.
ARTICLE III
REDEMPTION
SECTION 3.1. RIGHT OF REDEMPTION.
Redemption of Securities, as permitted by the provisions of this
Indenture, shall be made in accordance with such provisions and this Article
III. The Company will not have the right to redeem any Securities prior to May
1, 2003. On or after May 1, 2003, the Company will have the right to redeem all
or any part of the Securities pursuant to paragraph 5 thereof, in each case
(subject to the right of Holders of record on a Record Date to receive interest
due on an Interest Payment Date that is on or prior to such Redemption Date, and
subject to the provisions set forth in Section 3.5), including accrued and
unpaid interest and Liquidated Damages, if any, thereon to the Redemption Date.
Except as provided in this paragraph and paragraph 5 of the
Securities, the Securities may not otherwise be redeemed at the option of the
Company.
SECTION 3.2. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee and the Paying Agent in writing of
the Redemption Date and the principal amount of Securities to be redeemed and
whether it wants the Paying Agent to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee and
the Paying Agent for cancellation, it shall so notify the Trustee, in the form
of an Officers' Certificate, and the Paying Agent of the amount of the reduction
and deliver such Securities with such notice.
The Company shall give each notice to the Trustee and the Paying Agent
provided for in this Section 3.2 at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee and the Paying
Agent). Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
34
SECTION 3.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
PRO RATA basis, by lot or by such other method as the Trustee shall determine to
be appropriate and fair and in such manner as complies with any applicable
Depositary, legal and stock exchange requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
and the Paying Agent in writing of the Securities selected for redemption and,
in the case of any Security selected for partial redemption, the principal
amount thereof to be redeemed. Securities in denominations of $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal
to $1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.4. NOTICE OF REDEMPTION.
At least 30 days, but not more than 60 days prior to the Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee, the Paying Agent and each Holder whose Securities are
to be redeemed. At the Company's request, the Paying Agent shall give the
notice of redemption in the Company's name and at the Company's expense. Each
notice for redemption shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued
and unpaid interest and Liquidated Damages, if any, to be paid upon such
redemption;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless (a) the Company defaults in its obligation
to deposit with the Paying Agent cash which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms
will provide the amount to fund the Redemption Price in accordance with
Section 3.6 hereof or (b) such redemption payment is prohibited, interest
on Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price, including accrued
and unpaid interest to the Redemption Date, upon surrender to the Paying
Agent of the Securities called for redemption and to be redeemed;
35
(6) if any Security is being redeemed in part, the portion
of the principal amount, equal to $1,000 or any integral multiple thereof,
of such Security to be redeemed and that, after the Redemption Date, and
upon surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section
3.4 and pursuant to the optional redemption provisions of Paragraph 5 of
the Securities.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4
hereof, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest to the Redemption Date. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price,
including interest, if any, accrued and unpaid to the Redemption Date; PROVIDED
that if the Redemption Date is after a regular Record Date and on or prior to
the Interest Payment Date, to which such Record Date relates, the accrued
interest shall be payable to the Holder of the redeemed Securities registered on
the relevant Record Date; and PROVIDED, FURTHER, that if a Redemption Date is a
Legal Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate of the Company) cash
sufficient to pay the Redemption Price of all Securities to be redeemed on such
Redemption Date (other than Securities or portions thereof called for redemption
on that date that have been delivered by the Company to the Trustee for
cancellation). The Paying Agent shall promptly return to the Company any cash
so deposited which is not required for that purpose upon the written request of
the Company.
If the Company complies with the preceding paragraph and payment of
the Securities called for redemption is not prohibited for any reason, interest
on the Securities to be redeemed will cease to accrue on the applicable
Redemption Date, whether or not such Securities are presented for payment.
Notwithstanding anything herein to the contrary, if any Security surrendered for
redemption in the manner provided in the Securities shall not be so paid upon
36
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall continue to accrue and be paid from the
Redemption Date until such payment is made on the unpaid principal, and, to the
extent lawful, on any interest not paid on such unpaid principal, in each case
at the rate and in the manner provided in Section 4.1 hereof and the Security.
SECTION 3.7. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest (and Liquidated
Damages, if any) on the Securities on the dates and in the manner provided
herein and in the Securities. An installment of principal of or interest (and
Liquidated Damages, if any) on the Securities shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders, (on or before
10:00 a.m. New York City time to the extent necessary to provide the funds to
the Depository in accordance with the Depository's procedures) on that date cash
deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest (and Liquidated Damages, if any) at the rate specified
in the Securities compounded semi-annually, to the extent lawful.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Securities and this Indenture
may be served. The Company and the Guarantors shall give prompt written notice
to the Trustee and the Paying Agent of the location, and any change in the
location, of such office or agency. If at any time the Company and the
Guarantors shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee and the Paying Agent with the address thereof,
37
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 14.2 hereof.
The Company and the Guarantors may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee and the Paying Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company and the Guarantors hereby initially designates the Corporate Trust
Office of the Trustee as such office.
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on account of the Equity Interests of the Company or any of its
Subsidiaries (other than (x) dividends or distributions to the extent payable in
Qualified Equity Interests of the Company, (y) dividends or distributions to the
extent payable to the Company or any Subsidiary of the Company, and
(z) dividends or distributions by any Wholly Owned Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company, or any of its Subsidiaries; (iii) make any principal
payment on, or purchase, redeem, defease or otherwise acquire or retire for
value any Subordinated Indebtedness, except at the original final stated
maturity date thereof; or (iv) make any Restricted Investment (all such payments
and other actions set forth in clauses (i) through (iv) above being collectively
referred to as "RESTRICTED PAYMENTS"), unless, at the time of and after giving
effect to such Restricted Payment (the amount of any such Restricted Payment, if
other than cash or Cash Equivalents, shall be the fair market value (as
reasonably determined and evidenced by a resolution of the Board of Directors
set forth in an Officers' Certificate delivered to the Trustee prior to the
making of such Restricted Payment) of the asset(s) proposed to be transferred by
the Company or such Subsidiary, as the case may be, pursuant to such Restricted
Payment):
(a) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the Reference
Period immediately preceding the date of such Restricted Payment,
have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.11; and
38
(c) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its
Subsidiaries after March 31, 1997 (excluding Restricted Payments
permitted by clauses (x), (y) and (z) of the next succeeding
paragraph), is less than the sum (without duplication) of (i) 50%
of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing after March 31, 1997 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (ii) 100% of the aggregate
net cash proceeds received by the Company from the issue or sale
(other than to a Subsidiary of the Company) since March 31, 1997 of
(A) Qualified Equity Interests of the Company or (B) debt securities
of the Company or any of its Subsidiaries that were issued after
March 31, 1997 and have been converted into or exchanged for
Qualified Equity Interests of the Company, plus (iii) to the extent
that any Restricted Investment that was made after July 8, 1997 is
sold for cash or otherwise liquidated or repaid for cash, the lesser
of (A) the cash return to the Company and its Subsidiaries of capital
with respect to such Restricted Investment (net of taxes and the
cost of disposition, if any) or (B) the initial amount of such
Restricted Investment.
The immediately preceding paragraph will not prohibit the following
Restricted Payments: (u) dividends or distributions paid by any Subsidiary of
the Company to holders of Capital Stock of such Subsidiary other than the
Company or another Subsidiary of the Company, PROVIDED that such dividends
and distributions are paid (1) on a PRO RATA basis to each holder of Capital
Stock of such Subsidiary or (2) in the case of payment by a Career Staff
Company, in accordance with the partnership agreement thereof; (v) the
payment of any dividend within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have otherwise complied
with the provisions of this Indenture; (w) the payment of up to an aggregate
of $22.5 million for the redemption or other acquisition of any of the
outstanding 6-1/2% Convertible Subordinated Debentures due 2003; (x) the
redemption, repurchase, retirement or other acquisition of any Equity
Interests of the Company issued after July 8, 1997 in exchange for, or out of
the net cash proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of Qualified Equity Interests of the Company,
PROVIDED that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (c)(ii) of the preceding paragraph; (y) the defeasance,
redemption or repurchase of Subordinated Indebtedness issued after July 8,
1997 with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness or in exchange for or out of the net cash proceeds from the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Qualified Equity Interests of the Company, PROVIDED that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph; and (z) any purchase or defeasance of Subordinated
Indebtedness to the extent required upon a change of control (as defined
therein) by the indenture or other agreement or instrument pursuant to which
such Subordinated Indebtedness was issued, but only if the Company has
complied with its obligations
39
under the provisions of Section 11.1 hereof; PROVIDED that in the case of
each of clauses (u), (v), (w), (x), (y) and (z) of this paragraph no Default
or Event of Default shall have occurred or be continuing at the time of such
Restricted Payment or would occur as a consequence thereof.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which
the calculations required by this Section 4.3 were computed.
SECTION 4.4. CORPORATE AND PARTNERSHIP EXISTENCE.
Subject to Article V, the Company and the Guarantors shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their respective corporate or partnership existence, as the case may
be, and the corporate or partnership existence, as the case may be, of each
of their Subsidiaries in accordance with the respective organizational
documents of each of them and the rights (charter and statutory) and
corporate franchises of the Company, the Guarantors and each of their
respective Subsidiaries; PROVIDED, HOWEVER, that neither the Company nor any
Guarantor shall be required to preserve, with respect to themselves, any
right or franchise, and with respect to any of their respective Subsidiaries,
any such existence, right or franchise, if (a) the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and (b) the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS.
Except with respect to immaterial items, the Company and the
Guarantors shall, and shall cause each of their Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied
or imposed upon the Company, any Guarantor or any of their Subsidiaries or
any of their respective properties and assets and (ii) all lawful claims,
whether for labor, materials, supplies, services or anything else, which have
become due and payable and which by law have or may become a Lien upon the
property and assets of the Company, any Guarantor or any of their
Subsidiaries; PROVIDED, HOWEVER, that neither the Company nor any Guarantor
shall be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity
is being contested in good faith by appropriate proceedings and for which
disputed amounts adequate reserves have been established in accordance with
GAAP.
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company and the Guarantors shall cause all material properties,
in the good faith opinion of the Company, used or useful to the conduct of
their business and the business of each of their Subsidiaries to be
maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments
and improvements thereof,
40
all as in their reasonable judgment may be necessary, so that the business
carried on in connection therewith may be properly conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section 4.6 shall prevent the Company
or any Guarantor from discontinuing any operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or
disposal is (a), in the judgment of the Board of Directors of the Company,
desirable in the conduct of the business of the Company and (b) not adverse
in any material respect to the Holders.
The Company and the Guarantors shall provide, or cause to be
provided, for themselves and each of their Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Company is adequate and appropriate for
the conduct of the business of the Company, the Guarantors and such
Subsidiaries in a prudent manner, with (except for self-insurance) reputable
insurers or with the government of the United States of America or an agency
or instrumentality thereof, in such amounts, with such deductibles, and by
such methods as shall be customary, in the reasonable, good faith opinion of
the Company and adequate and appropriate for the conduct of the business of
the Company, the Guarantors and such Subsidiaries in a prudent manner for
entities similarly situated in the industry, unless the Company determines
that failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition
or results of operations of the Company, such Guarantors or such Subsidiary.
SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 120
days after the end of its fiscal year an Officers' Certificate, one of the
signers of which shall be the principal executive, principal financial or
principal accounting officer of the Company, complying with Section 314(a)(4)
of the TIA and stating that a review of its activities and the activities of
its Subsidiaries, if any, during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture (without regard to notice requirements or
grace periods) and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company,
any Guarantor or any Subsidiary of the Company to comply with any conditions
or covenants in this Indenture and, if such signer does know of such a
failure to comply, the certificate shall describe such failure with
particularity. The Officers' Certificate shall also notify the Trustee
should the relevant fiscal year end on any date other than the current fiscal
year end date.
(b) The Company shall, so long as any of the Securities
are outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto. The Trustee shall not be deemed to have knowledge of
any Default, any Event of Default or any such fact unless one of its Trust
Officers receives written notice thereof from the Company or any of the
Holders.
41
SECTION 4.8. REPORTS.
Whether or not the Company is required by the rules and regulations
of the Commission, so long as any Securities are outstanding, the Company
will furnish to the Trustee and all Holders, within 15 days after it is or
would have been required to file such with the Commission, all quarterly and
annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants. In addition, whether or not required by the rules
and regulations of the Commission but only to the extent permitted thereby,
the Company will file a copy of all such information and reports with the
Commission for public availability and make such information available to
securities analysts and prospective investors upon request. Notwithstanding
anything contrary herein the Trustee shall have no duty to review such
documents for purposes of determining compliance with any provisions of this
Indenture.
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company and the Guarantors shall not and shall not permit any
of their Subsidiaries to become an "investment company" (as that term is
defined in the Investment Company Act of 1940, as amended), or otherwise
become subject to regulation under the Investment Company Act.
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE
TRANSACTION"), or any series of related Affiliate Transactions, unless (i)
such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Subsidiary than those that could have been obtained
in a comparable transaction by the Company or such Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with
respect to an Affiliate Transaction, or any series of related Affiliate
Transactions, involving aggregate consideration in excess of $2.5 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to an
Affiliate Transaction, or any series of related Affiliate Transactions,
involving aggregate consideration in excess of $5.0 million, an opinion as to
the fairness to the Company or such Subsidiary of such Affiliate Transaction
from a financial point of view issued by an investment banking firm of
national standing; PROVIDED that the following shall not be deemed to be
Affiliate Transactions: (w) transactions or payments pursuant to any
employment arrangements, director or officer indemnification agreements or
employee or director benefit plans entered into by the Company or any of its
Subsidiaries in the ordinary course of
42
business of the Company or such Subsidiary, (x) transactions between or among
the Company and/or any of its Subsidiaries, (y) any transaction or series of
related transactions pursuant to terms entered into prior to the date of this
Indenture and (z) Restricted Payments by the Company which are permitted by
Section 4.3 and are made on a PRO RATA basis to each stockholder of the
Company.
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (individually and collectively, "INCUR") after the date of
this Indenture any Indebtedness (including Acquired Debt), and the Company
will not permit any of its Subsidiaries to issue any shares of Preferred
Stock; PROVIDED that the Company and its Subsidiaries may incur Indebtedness
(including Acquired Debt) or issue Preferred Stock if (a) no Default or Event
of Default shall have occurred and be continuing at the time of, or would
occur after giving effect on a pro forma basis to, such incurrence of
Indebtedness or issuance of Preferred Stock and (b) the Fixed Charge Coverage
Ratio for the Reference Period immediately preceding the date on which such
additional Indebtedness is incurred or such Preferred Stock is issued would
have been at least 2.0 to 1 for incurrences on or prior to June 30, 1999,
2.25 to 1 for incurrences after June 30, 1999 and on or prior to June 30,
2000 and 2.5 to 1 thereafter, in each case determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Preferred Stock issued at
the beginning of such Reference Period. Indebtedness consisting of
reimbursement obligations in respect of a letter of credit will be deemed to
be incurred when the letter of credit is first issued.
The foregoing paragraph will not prevent:
(i) the incurrence under this clause (i) by the Company or any of
its Subsidiaries (other than the Foreign Companies) of (a) Maximum Senior
Revolving Debt, less the aggregate amount of all Net Proceeds of Asset
Sales applied to permanently reduce the commitments with respect to such
Indebtedness pursuant to Section 4.14 hereof after the Issue Date and (b)
Maximum Senior Term Debt less the aggregate amount of all principal
payments made with respect to such Senior Maximum Term Debt;
(ii) the incurrence by the Foreign Companies of Senior Revolving Debt
pursuant to the U.K. Credit Agreements in an aggregate principal amount at
any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential reimbursement obligation of
the Foreign Companies with respect thereto and including any Permitted
Refinancing Indebtedness incurred under this clause (ii) to extend, renew,
refinance, defense, or refund any such Indebtedness) not to exceed an
amount equal to L75.0 million (or the equivalent amount thereof, at the
time of incurrence, in other foreign currencies), less the aggregate
amount of all Net Proceeds of
43
Assets Sales applied to permanently reduce the commitments with respect
to such Indebtedness pursuant to Section 4.14 hereof after the Issue Date;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Securities (including the over-allotment
option to purchase up to an additional $25,000,000 principal amount of the
Securities);
(iv) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund,
Indebtedness that was permitted by this Indenture to be incurred
(including, without limitation, Existing Indebtedness);
(v) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and/or any
Subsidiaries; PROVIDED that in the case of such Indebtedness of the
Company or the Guarantors, such obligations shall be unsecured and
subordinated in all respects to the Company's and the Guarantors'
obligations pursuant to the Securities and the Guarantees and a new
incurrence shall be deemed to occur for purposes of this covenant
upon any such Subsidiary ceasing to be a Subsidiary such that such
Indebtedness is no longer intercompany Indebtedness between or among
the Company and/or any Subsidiaries;
(vi) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate or currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by this Indenture to be outstanding or any
receivable or liability the payment of which is determined by reference to
a foreign currency; PROVIDED that the notional principal amount of any
such Hedging Obligation does not exceed the principal amount of the
Indebtedness or the amount of such receivable or liability to which such
Hedging Obligation relates;
(vii) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by performance bonds, warranty or contractual
service obligations, standby letters of credit or appeal bonds, in each
case to the extent incurred in the ordinary course of business of the
Company or such Subsidiary in accordance with customary industry
practices, in amounts and for the purposes customary in the Company's
industry; and
(viii) the incurrence by the Company or any of the Guarantors or
the Foreign Companies of Indebtedness (in addition to Indebtedness
permitted by any other clause of this paragraph) in an aggregate principal
amount at any time outstanding (including any Indebtedness issued to
extend, refinance, replace, defease or refund such Indebtedness) not to
exceed $75.0 million (or the equivalent amount thereof, at the time of
incurrence, in other foreign currencies).
For purposes of determining any particular amount of Indebtedness
under this covenant and so as to avoid duplication, guarantees, Liens or
obligations with respect to letters
44
of credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included. For purposes of determining
compliance with this covenant, (i) in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness permitted by
the second paragraph of this covenant, except as specifically stated
otherwise and only at the time of such incurrence the Company, such Guarantor
or such Subsidiary shall classify such item of Indebtedness, and only be
required to include the amount and type of such Indebtedness as being
incurred in one of the categories of permitted Indebtedness described above
and (ii) the outstanding principal amount on any date of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness
less the remaining unamortized portion of the original issue discount of such
Indebtedness on such date.
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction on the ability of
any Subsidiary to (i)(a) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to or on behalf of the Company or
any of its Subsidiaries or (iii) transfer any of its properties or assets to
or on behalf of the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of this Indenture, (b) this Indenture
or any indenture or similar instrument governing Indebtedness ranking on a
parity with the Securities, PROVIDED that such restrictions are no more
restrictive than those contained in this Indenture, (c) applicable law, (d)
any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Subsidiaries as in effect at the time of such
acquisition or merger (except to the extent incurred in connection with or in
contemplation of such acquisition or merger or in violation of Section 4.11,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired or merged, (e) customary non-assignment
provisions in leases entered into in the ordinary course of business, (f)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii)
above solely on the property so acquired, (g) Permitted Refinancing
Indebtedness, PROVIDED that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive
than those contained in and do not apply to any other assets or person than
was covered by the agreements governing the Indebtedness being refinanced, or
(h) the Credit Agreement, the U.K. Credit Agreements and future Foreign
Company credit agreements, including related documentation as the same is in
effect on July 8, 1997 and as amended or replaced from time to time (and
Senior Debt under other credit agreements with lender banks or other
financial institutions that are no more restrictive than the Credit
Agreement), PROVIDED that no such future Foreign Company credit agreement and
no such amendment or replacement is more restrictive as to the matters
enumerated above than the Credit Agreement, the U.K. Credit Agreements (in
the case of amendments or replacements thereof) and
45
related documentation as in effect on July 8, 1997. Nothing contained in
this Section 4.12 shall prevent the Company or any Subsidiary of the Company
from creating, incurring, assuming or suffering to exist any Permitted Liens
or entering into agreements in connection therewith that impose restrictions
on the transfer or disposition of the property or assets subject to such
Permitted Liens.
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS; REDEEMABLE STOCK;
LIENS SECURING INDEBTEDNESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist (a) any
(i) Redeemable Stock, or (ii) Indebtedness that is subordinate in right of
payment to any other Indebtedness of the Company or a Guarantor (other than
Existing Indebtedness, Acquired Debt (except to the extent incurred in
connection with or in contemplation of such acquisition or merger or in
violation of Section 4.11) and Indebtedness incurred in compliance with
clause (v) of Section 4.11) unless, by its terms, such Redeemable Stock or
Indebtedness (A) has an original final stated maturity subsequent to the
Maturity Date and a Weighted Average Life to Maturity longer than that of the
Securities and (B) is subordinate in right of payment to, or ranks PARI PASSU
with, the Securities or the Guarantee, as applicable, or (b) any Lien (except
Permitted Liens) on any asset now owned or hereafter acquired, or on any
income or profits therefrom or assign or convey any right to receive income
therefrom securing any Indebtedness of the Company or any of its Subsidiaries
unless all payments due under this Indenture, the Securities and the
Guarantees (as applicable) are secured on an equal and ratable basis with the
Obligations so secured (or, if the Obligations so secured constitute
Subordinated Indebtedness, on a senior basis) until such time as such
Obligations are no longer secured by a Lien.
SECTION 4.14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, in one or a series of related transactions, consummate an Asset Sale
unless (i) the Company (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value (as reasonably determined and evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 80% of the consideration therefor received by
the Company or such Subsidiary is in the form of cash or Cash Equivalents,
PROVIDED that for purposes of this provision, (x) the amount of (A) any
liabilities (as shown on the most recent balance sheet of the Company or such
Subsidiary or in the notes thereto) of the Company or such Subsidiary that
are assumed by the transferee of any such assets (other than liabilities that
are by their terms PARI PASSU with or subordinated to the Securities or the
guarantee of the Guarantors, as applicable) and (B) any securities or other
obligations received by the Company or any such Subsidiary from such
transferee that are immediately converted by the Company or such Subsidiary
into cash or Cash Equivalents (or as to which the Company or such Subsidiary
has received at or prior to the consummation of the Asset Sale a commitment
(which may be subject to customary conditions) from a nationally recognized
investment, merchant or commercial
46
bank to convert into cash or Cash Equivalents within 90 days of the
consummation of such Asset Sale and which are thereafter actually converted
into cash or Cash Equivalents within such 90-day period) will be deemed to be
cash or Cash Equivalents (and shall be deemed to be Net Proceeds for purposes
of the following provisions as and when reduced to cash or Cash Equivalents)
to the extent of the net cash or Cash Equivalents realized thereon and (y)
the fair market value of any Non-Cash Consideration received by the Company
or a Subsidiary in any Non-Qualified Asset Sale shall be deemed to be cash to
the extent that the aggregate fair market value (as reasonably determined and
evidenced by a resolution of the Board of Directors set forth in an Officers'
Certificate delivered to the Trustee) of all Non-Cash Consideration (measured
at the time received and without giving effect to any subsequent changes in
value) received by the Company or any of its Subsidiaries since the date of
this Indenture in all Non-Qualified Asset Sales does not exceed 5% of
Stockholders' Equity as of the date of such consummation. Notwithstanding the
foregoing, to the extent the Company or any of its Subsidiaries receives
Non-Cash Consideration as proceeds of an Asset Sale, such Non-Cash
Consideration shall be deemed to be Net Proceeds for purposes of (and shall
be applied in accordance with) the following provisions when the Company or
such Subsidiary receives cash or Cash Equivalents from a sale, repayment,
exchange, redemption or retirement of or extraordinary dividend or return of
capital on such Non-Cash Consideration.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Subsidiary may apply such Net Proceeds (i) to
purchase one or more Nursing Facilities or Related Businesses and/or a
controlling interest in the Capital Stock of a Person owning one or more
Nursing Facilities and/or one or more Related Businesses (and no other
material assets), (ii) to make a capital expenditure or to acquire other
tangible assets, in each case, that are used or useful in any business in
which the Company is permitted to be engaged pursuant to Section 4.17 hereof
or (iii) to permanently reduce Senior Debt (including, in the case of Senior
Revolving Debt, to correspondingly reduce commitments with respect thereto).
Pending the final application of any such Net Proceeds, the Company or such
Subsidiary may temporarily reduce Senior Revolving Debt. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $25 million, the Company
shall make an offer to all Holders and holders of any other Indebtedness of
the Company ranking senior to or on a parity with the Securities from time to
time outstanding with similar provisions requiring the Company to make an
offer to purchase or to redeem such Indebtedness with the proceeds from any
Asset Sales, pro rata in proportion to the respective principal amounts (or,
if applicable, accreted values of Indebtedness issued with an original issue
discount) of Securities and such other Indebtedness then outstanding
(collectively, an "ASSET SALE OFFER") to purchase the maximum principal
amount (or, if applicable, accreted values of Indebtedness issued with an
original discount) of the Securities and such other Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price in cash equal to 100%
of the principal amount thereof plus accrued and unpaid interest thereon and
Liquidated Damages, if any, to the date of purchase (the "ASSET SALE
PAYMENT"), in accordance with the procedures set forth in Section 2.14. To
the extent that the aggregate amount of (or, if applicable, accreted values
of Indebtedness issued with an original issue discount) Securities and such
other Indebtedness tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for
47
general corporate purposes not prohibited at the time under this Indenture.
If the aggregate principal amount of Securities and such other Indebtedness
surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Securities and such other Indebtedness will be purchased on a pro rata basis.
Upon completion of an Asset Sale Offer, the amount of Excess Proceeds shall
be reset at zero.
SECTION 4.15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law or any usury law or other law which would prohibit or
forgive the Company or any Guarantor from paying all or any portion of the
principal of, premium of, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
SECTION 4.16. RULE 144A INFORMATION REQUIREMENT.
The Company shall furnish to the Holders of the Securities,
securities analysts, and prospective purchasers of Securities designated by
the Holders of Transfer Restricted Securities, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act until such time as either the Company has concluded an offer
to exchange the Exchange Securities for the Initial Securities or a
registration statement relating to resales of the Securities has become
effective under the Securities Act. The Company shall also furnish such
information during the pendency of any suspension of effectiveness of such
resale registration statement.
SECTION 4.17. LIMITATIONS ON LINES OF BUSINESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage to any material extent in any business other than the ownership,
operation and management of Nursing Facilities and Related Businesses.
48
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or, directly or indirectly,
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person or group of affiliated Persons or adopt a
Plan of Liquidation unless (i) the Company is the surviving corporation or
the entity or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made or (in
the case of a Plan of Liquidation) the Person which receives the greatest
value from the Plan of Liquidation is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person
to which such sale, assignment, transfer, conveyance or other disposition
shall have been made or (in the case of a Plan of Liquidation) the Person
which receives the greatest value from the Plan of Liquidation assumes all
the obligations of the Company under the Securities and this Indenture
pursuant to a supplemental Indenture in form reasonably satisfactory to the
Trustee; (iii) immediately after giving effect to such transaction on a pro
forma basis, no Default or Event of Default exists; and (iv) the Company or
the entity or Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made or (in the case
of a Plan of Liquidation) the Person which receives the greatest value from
the Plan of Liquidation (A) will have Consolidated Net Worth immediately
after the transaction equal to or greater than the Consolidated Net Worth of
the Company immediately preceding the transaction and (B) will, at the time
of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the Reference Period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.11.
Upon any consolidation or merger or any such sale, assignment,
transfer, conveyance or other disposition (but not lease) or consummation of
a Plan of Liquidation in accordance with the foregoing, the successor
corporation formed by such consolidation or into which the Company is merged
or to which such transfer is made or, in the case or a Plan of Liquidation,
the entity which receives the greatest value from such Plan of Liquidation
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named therein as the Company, and the Company
shall be released from the obligations under the Securities and this
Indenture except with respect to any obligations that arise from, or are
related to, such transaction.
49
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets
of one or more Subsidiaries, the Company's interest in which constitutes all
or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which
the Company is merged or to which such transfer is made, shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor
corporation had been named herein as the Company, and when a successor
corporation duly assumes all of the obligations of the Company pursuant
hereto and pursuant to the Securities, the Company shall be released from
such obligations (except with respect to any obligations that arise from, or
are related to, such transaction).
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether
it shall be caused voluntarily or involuntarily or effected, without
limitation, 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):
(i) failure by the Company to pay any installment of
interest upon the Securities as and when the same becomes due and
payable, and the continuance of any such failure for a period of 30 days
(whether or not such payment is prohibited by Article XII or otherwise);
(ii) failure by the Company to pay all or any part of
the principal of or premium, if any, on the Securities when and as the
same becomes due and payable at maturity, upon redemption, by
acceleration, or otherwise, including, without limitation, default in
the payment of the Change of Control Payment in accordance with Article
XI or the Asset Sale Payment in accordance with Section 4.14 or
otherwise;
(iii) failure by the Company or any Guarantor for 30
days after written notice to comply with the provisions of Section 4.3
or 4.11 hereof;
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(iv) failure by the Company or any Guarantor to observe
or perform any other covenant or agreement contained in the Securities
or this Indenture (other than as specifically dealt with in paragraph
(i), (ii) or (iii) of this Section 6.1) and the continuance of such
failure for a period of 60 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Securities
outstanding, specifying such default or breach, requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
(v) any default occurs under any mortgage, indenture
or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries), whether such Indebtedness or
guarantee exists on the date of this Indenture or is thereafter created,
which default (a) constitutes a Payment Default or (b) results in the
acceleration of such Indebtedness prior to its final stated maturity
and, in each case, the principal amount of any Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or that has been so accelerated,
aggregates in excess of $20 million;
(vi) final unsatisfied judgments not covered by
insurance for the payment of money, or the issuance of any warrant of
attachment against any portion of the property or assets of the Company
or any of its Subsidiaries, aggregating in excess of $20 million, at any
one time shall be rendered against the Company or any of its
Subsidiaries and not be stayed, bonded or discharged for a period
(during which execution shall not be effectively stayed) of 60 days (or,
in the case of any such final judgment which provides for payment over
time, which shall so remain unstayed, unbonded or undischarged beyond
any applicable payment date provided therein);
(vii) any Guarantee by a Guarantor which is a
Significant Subsidiary shall cease for any reason not permitted by this
Indenture to be in full force and effect, or any such Guarantor, or any
person acting on behalf of any such Guarantor, shall deny or disaffirm
its obligations under its Guarantee;
(viii) a decree, judgment, or order by a court of
competent jurisdiction shall have been entered adjudicating the Company
or any of its Significant Subsidiaries as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the
Company or any of its Significant Subsidiaries under any bankruptcy or
similar law, and such decree or order shall have continued undischarged
and unstayed for a period of 60 days, PROVIDED, HOWEVER, that if the
entry of such order or decree is appealed and dismissed on appeal then
the Event of Default hereunder by reason of the entry of such judgment
or decree shall be deemed to have been cured; or a decree, judgment or
order of a court of competent jurisdiction appointing a receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency for the
Company, any of its Significant
51
Subsidiaries, or any substantial part of the property of any such
Person, or for the winding up or liquidation of the affairs of any such
Person, shall have been entered, and such decree, judgment, or order
shall have remained in force undischarged and unstayed for a period of
60 days; PROVIDED, HOWEVER, that if the entry of such order or decree is
appealed and dismissed on appeal then the Event of Default hereunder by
reason of the entry of such judgment or decree shall be deemed to have
been cured; or
(ix) the Company or any of its Significant Subsidiaries
shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent seeking reorganization under
any bankruptcy or similar law or similar statute, or shall consent to
the filing of any such petition, or shall consent to the appointment of
a Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any substantial part of its assets or property, or
shall make a general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become
due, fail generally to pay its debts as they become due, or take any
corporate action in furtherance of any of the foregoing.
If a Default occurs and is continuing, the Trustee must, within 90
days after the occurrence of such default, give to the Holders notice of such
default.
SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND
ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 6.1(viii) or (ix) above relating to the Company or any of its
Significant Subsidiaries) occurs and is continuing, then, and in every such
case, unless the principal of all of the Securities shall have already become
due and payable, either the Trustee or the Holders of at least 25% in
aggregate principal amount of then outstanding Securities, by a notice in
writing to the Company (and to the Trustee if given by Holders) (an
"ACCELERATION NOTICE"), may declare all of the principal of the Securities,
determined as set forth below, including in each case accrued interest
thereon, to be due and payable immediately; PROVIDED that so long as at least
$15 million of Senior Debt is outstanding under the Credit Agreement, no
acceleration of the maturity of the Securities shall be effective until the
earlier of (i) five days after notice of acceleration is received by the
Representative under the Credit Agreement (unless such Event of Default is
cured or waived prior thereto) and (ii) the date on which any Senior Debt
under the Credit Agreement is accelerated. In the event a declaration of
acceleration resulting from an Event of Default described in Section 6.1(v)
above has occurred and is continuing, such declaration of acceleration shall
be automatically annulled if such default is cured or waived or the holders
of the Indebtedness which is the subject of such default have rescinded their
declaration of acceleration in respect of such Indebtedness within sixty days
thereof and the Trustee has received written notice of such cure, waiver or
rescission and no other Event of Default described in Section 6.1(v) above
has occurred that has not been cured or waived, or as to which the
declaration has not been rescinded, within sixty days of the declaration of
such acceleration in respect of such Indebtedness. If an Event of Default
specified in Section 6.1(viii) or (ix) above relating to the Company or any
Significant
52
Subsidiary occurs, all principal and accrued interest thereon will be
immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not
less than a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Company and the Trustee, may rescind, on
behalf of all Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee cash
sufficient to pay:
(A) all overdue interest and Liquidated Damages, if any,
on all Securities,
(B) the principal of (and premium, if any, applicable
to) any Securities which would become due other than by reason of
such declaration of acceleration, and interest thereon at the rate
borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the
Securities,
(D) all sums paid or advanced by the Trustee hereunder
and the compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, and all other amounts due the
Trustee under Section 7.7 and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 6.12 hereof.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with
notice or lapse of time or both would be an Event of Default with respect to
(i) any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected thereby, unless
all such affected Holders agree, in writing, to waive such Event of Default
or other event and (ii) any provision requiring supermajority approval to
amend, unless such default has been waived by such a supermajority. No such
waiver shall cure or waive any subsequent default or impair any right
consequent thereon.
53
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (i) or (ii) of Section 6.1
hereof occurs and is continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities for principal, premium
(if any), and interest, and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium,
if any), and on any overdue interest, at the rate borne by the Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including compensation to, and
expenses, disbursements and advances of the Trustee and its agents and
counsel and all other amounts due the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust in
favor of the Holders, may institute a judicial proceeding for the collection
of the sums so due and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company or any other
obligor upon the Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or
any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal, premium,
if any (and Liquidated Damages, if any), or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise to take any and
all actions under the TIA, including
(1) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements
54
and advances of the Trustee and its agent and counsel and all other
amounts due the Trustee under Section 7.7) and of the Holders allowed
in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and its
agents and counsel, and any other amounts due the Trustee under Section 7.7
hereof.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust in
favor of the Holders, and any recovery of judgment shall, after provision for
the payment of compensation to, and expenses, disbursements and advances of
the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 7.7, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of
principal, premium (if any), or interest, upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and
unpaid for principal of, premium (if any), and interest on, the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind,
55
according to the amounts due and payable on such Securities for principal,
premium (if any), and interest, respectively; and
THIRD: To the Company, the Guarantors or such other Person as may
be lawfully entitled thereto, the remainder, if any, each as their respective
interests may appear.
The Trustee may, but shall not be obligated to, fix a record date
and payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct
the Trustee to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate principal
amount of then outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(E) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of,
56
and premium (if any), and interest on, such Security on the Maturity Dates of
such payments as expressed in such Security (in the case of redemption, the
Redemption Price on the applicable Redemption Date, in the case of the Change
of Control Payment, on the applicable Change of Control Payment Date, and in
the case of the Asset Sale Payment, on the Purchase Date) and to institute
suit for the enforcement of any such payment after such respective dates, and
such rights shall not be impaired without the consent of such Holder.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7
hereof, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event of Default
shall impair the exercise of any such right or remedy or constitute a waiver
of any such Event of Default. Every right and remedy given by this Article
VI or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 6.11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount
of then outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee,
PROVIDED, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking part in
such direction, and
(3) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
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SECTION 6.12. WAIVER OF EXISTING OR PAST DEFAULT.
Subject to Section 6.8 and 9.2 hereof, the Holder or Holders of not
less than a majority in aggregate principal amount of the outstanding
Securities may, on behalf of all Holders, waive any existing or past Default
or Event of Default hereunder and its consequences under this Indenture,
except a default
(A) in the payment of the principal of, premium, if any, or
interest on, any Security as specified in clauses (i) and (ii) of Section
6.1 hereof and not yet cured, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair the exercise of any right arising
therefrom.
SECTION 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to
be taken by it as Trustee, any court may in its discretion require the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 6.13
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in aggregate principal amount of the
outstanding Securities, or to any suit instituted by any Holder for
enforcement of the payment of principal of, or premium (if any), or interest
on, any Security on or after the respective Maturity Date expressed in such
Security (including, in the case of redemption, on or after the Redemption
Date).
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder and
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thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed,
subject to the terms hereof.
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and
is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of a Default or an
Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are
adverse to 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,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1,
(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
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(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 6.11 hereof.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or
omit to take any action under this Indenture or at the request, order or
direction of the Holders or in the exercise of any of its rights or powers if
it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of
this Section 7.1.
(f) The Trustee shall not be liable for interest on any
assets received by it except as the Trustee may agree in writing with the
Company (including without limitation to the extent the Trustee receives
funds prior to the interest payment date in order to comply with the
provisions of Section 4.1). Assets held in trust by the Trustee need not be
segregated from other assets except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1 hereof:
(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 such document.
(b) Before the Trustee acts or refrains from acting, it
may consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 14.4 and 14.5 hereof.
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it or
its agent takes or omits to take in good faith which it believes to be
authorized or within its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the Trustee,
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in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Holders, pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or such
Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Guarantor's covenants in Article IV
hereof or as to the performance by any Agent of its duties hereunder. In
addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to
Sections 6.1(i), 6.1(ii) and 4.1 hereof, or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate.
SECTION 7.3. 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, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and
7.11 hereof.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds
received by a Paying Agent other than the Trustee.
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SECTION 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the uncured Default or Event of Default within 90 days after such
Default or Event of Default occurs. Except in the case of a Default or an
Event of Default in payment of principal (or premium, if any), of, or
interest on, any Security (including the payment of the Change of Control
Purchase Price on the Change of Control Payment Date, the payment of the
Redemption Price on the Redemption Date and the payment of the Offer Price on
the Purchase Date), the Trustee may withhold the notice if and so long as a
Trust Officer in good faith determines that withholding the notice is in the
interest of the Securityholders.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock
exchange, if any, on which the Securities are listed.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company and the Guarantors jointly and severally agree to pay
to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company and the Guarantors shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it in accordance with this Indenture. Such
expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against,
any claim, demand, expense (including but not limited to reasonable
compensation, disbursements and expenses of the Trustee's agents and
counsel), loss or liability incurred by it without negligence or bad faith on
the part of the Trustee, arising out of or in connection with the
administration of this trust and its rights or duties hereunder, including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The
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Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company and the Guarantors
shall defend the claim and the Trustee shall provide reasonable cooperation
at the Company's and the Guarantors' expense in the defense. The Trustee may
have separate counsel and the Company and the Guarantors shall pay the
reasonable fees and expenses of such counsel; PROVIDED, that the Company and
the Guarantors will not be required to pay such fees and expenses if they
assume the Trustee's defense and there is no conflict of interest between the
Company and the Guarantors and the Trustee in connection with such defense.
The Company and the Guarantors need not pay for any settlement made without
their written consent. The Company and the Guarantors need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by
the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on
all assets held or collected by the Trustee, in its capacity as Trustee,
except assets held in trust to pay principal and premium, if any, of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(viii) or (ix) of this Indenture occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section
7.7 and any lien arising hereunder shall survive the resignation or removal
of the Trustee, the discharge of the Company's and the Guarantors'
obligations pursuant to Article VIII of this Indenture and any rejection or
termination of this Indenture under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor trustee with the Company's
consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after
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the successor Trustee takes office, the Holder or Holders of a majority in
principal amount of the Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that and provided that all sums owing to the retiring Trustee provided for in
Section 7.7 hereof have been paid, the retiring Trustee shall transfer all
property held by it as trustee to the successor Trustee, subject to the lien
provided in Section 7.7 hereof, 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. A successor
Trustee shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company
or the Holder or Holders of at least 10% in principal amount of the
outstanding 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 hereof, any
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the resulting, surviving or transferee corporation
without any further act shall, if such resulting, surviving or transferee
corporation is otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee shall have a combined capital
and surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
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.
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ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 7.7 and the Trustee's
and the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive)
when all outstanding Securities theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Securities that have been
replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company may
elect to have Section 8.2, at the Company's option and at any time within one
year of the Maturity Date of the Securities, or Section 8.3, at the Company's
option at any time, of this Indenture applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article VIII.
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantors shall be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented and this Indenture shall cease to be of further effect
as to all outstanding Securities and Guarantees, except as to be deemed to be
"outstanding" only for the purposes of Section 8.5 hereof and the other Sections
of this Indenture referred to in (a) and (b) below, and the Company and the
Guarantors shall be deemed to have satisfied all other of their respective
obligations under such Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Securities to receive payments in respect of the principal of,
premium, if any, and interest on such Securities when such payments are due from
the trust described in Section 8.5, (b) the Company's obligations with respect
to such Securities under Sections 2.3, 2.4, 2.6, 2.7, 2.10, 5.2, 8.5, 8.6 and
8.7 hereof and (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith. Subject to compliance with this Article VIII, the Company
may exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3 hereof with respect to the Securities.
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SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and 4.17, Article V and
Article XI hereof with respect to the outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and the Securities shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder.
For this purpose, such Covenant Defeasance means that, with respect to the
outstanding Securities, neither the Company nor any Guarantor need comply with
and shall have any liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document (and
Section 6.1(iii) hereof shall not apply to any such covenant), but, except as
specified above, the remainder of this Indenture and such Securities shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.1
hereof of the option applicable to this Section 8.3, Sections 6.1(v) and 6.1(vi)
hereof shall not constitute Events of Default with respect to the Securities.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities:
(a) (1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 hereof who shall agree to comply with the
provisions of this Article VIII applicable to it), in trust, for the benefit
of the Holders of the Securities, cash, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on such outstanding Securities on
their Maturity Date (the "Defeasance Trust"); (ii) in the case of Legal
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (B) since the date of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and
based thereon such opinion of counsel shall confirm that, the Holders of such
outstanding Securities will not recognize income, gain or loss for Federal
income tax purposes as a result of such Legal Defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an opinion of counsel in the United States confirming that the
Holders of such outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of
66
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; (iv) no Default or Event
of Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit) or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 91st day after the date of deposit; (v) such Legal Defeasance
or Covenant Defeasance will not result in a breach or violation of, or
constitute a default under any material agreement or instrument (other than
this Indenture) to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound (other than a
breach, violation or default resulting from the borrowing of funds to be
applied to such deposit); (vi) the Company must have delivered to the Trustee
an opinion of counsel to the effect that after the 91st day following the
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally; (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of such Securities over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding other creditors of the Company; and (viii) the Company must
deliver to the Trustee an Officers' Certificate and an opinion of counsel,
each stating that the conditions precedent provided for in, in the case of
the Officers' Certificate, (i) through (vi) and, in the case of the opinion
of counsel, clauses (i), (with respect to the validity and perfection of the
security interest) (ii), (iii) and (v) of this paragraph, have been complied
with.
If the funds deposited with the Trustee to effect Legal Defeasance or
Covenant Defeasance are insufficient to pay the principal of premium, if any,
and interest on the Securities when due, then the obligations of the Company and
the Guarantors under this Indenture, the Securities and the Guarantees will be
revived and no such defeasance will be deemed to have occurred.
SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"PAYING AGENT") pursuant to Section 8.4 hereof in respect of the outstanding
Securities shall be held in trust and applied by the Paying Agent, in accordance
with the provisions of such Securities and this Indenture, to the payment,
either directly or through any other Paying Agent as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
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SECTION 8.6. REPAYMENT TO THE COMPANY.
(a) Anything in this Article VIII to the contrary
notwithstanding, the Trustee or the Paying Agent shall deliver or pay to the
Company from time to time upon the request of the Company any cash or U.S.
Government Obligations held by it as provided in Section 8.4 hereof which in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request; and the Holder of such Security shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the NEW YORK TIMES and THE WALL STREET
JOURNAL (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply such money in accordance with
Sections 8.2 and 8.3 hereof, as the case may be; PROVIDED, HOWEVER, that, if the
Company makes any payment of principal of, premium, if any, or interest on any
Security following 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 cash or U.S. Government Obligations held by the Trustee or
Paying Agent.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause (1) shall not adversely affect the
interests of any Holder in any material respect;
(2) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(3) to add to the covenants of the Company or the Guarantors for
the benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or the Guarantors;
(4) to provide for collateral for or additional Guarantors of
the Securities;
(5) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the obligations of the Company,
herein and in the Securities in accordance with Article V;
(6) to comply with the TIA;
(7) to evidence the succession of another corporation to any
Guarantor and assumption by any such successor of the Guarantee of such
Guarantor (as set forth in Section 12.4) in accordance with Article XII;
(8) to evidence the release of any Guarantor in accordance with
Article XII;
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;
69
(10) in any other case where a supplemental indenture is required
or permitted to be entered into pursuant to the provisions of this Indenture
without the consent of any Holder; or
(11) to provide for the issuance and authorization of the
Exchange Securities.
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS.
Subject to Section 6.8 hereof, with the 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 offer
for such Securities), by written act of said Holders delivered to the Company
and the Trustee, the Company or any Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement this Indenture or the
Securities or enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or the Securities or of modifying in any
manner the rights of the Holders under this Indenture or the Securities.
Subject to Section 6.8, the Holder or Holders of not less than a majority in
aggregate principal amount of then outstanding Securities may waive compliance
by the Company or any Guarantor with any provision of this Indenture or the
Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby:
(1) change the Maturity Date on any Security, or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest thereon
or any premium payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity Date thereof (or in the
case of redemption, on or after the Redemption Date), or reduce the Change of
Control Purchase Price or the Asset Sale Offer Price or alter the provisions
(including the defined terms used herein) regarding the right of the Company to
redeem the Securities in a manner adverse the Holders; or
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or wavier provided for in this Indenture;
(3) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provision of this Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby; or
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(4) make the Securities subordinated in right of payment to any
extent or under any circumstances to any other indebtedness, except to the
extent no less favorable to the Holders than would be consistent with Article
XII hereof as in effect on the Issue Date.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
under Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding
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paragraph, those Persons who were Holders at such record date, and only those
Persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than ninety days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (4) of Section 9.2 hereof, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; PROVIDED, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest on a Security, on or after the respective
dates set for such amounts to become due and payable expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about 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. Any
failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; PROVIDED, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
SECTION 9.7. AGREEMENT BY REPRESENTATIVE UNDER THE CREDIT AGREEMENT.
Notwithstanding any of the above, however, so long as any Senior Debt
is outstanding under the Credit Agreement, no such modification, supplement or
waiver of any of the terms or provisions of Article XIII shall be effective
unless expressly agreed to in writing by the Representative under the Credit
Agreement. So long as any Senior Debt is outstanding under the Credit
Agreement, the Trustee shall deliver written notice of any modification or
supplement
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to the Securities or this Indenture to the Representative under the Credit
Agreement no less than five business days before the effective date of any
such modification or supplement.
ARTICLE X
RESERVED
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A
CHANGE OF CONTROL.
(a) In the event that a Change of Control occurs, each
Holder shall have the right, at such Holder's option, subject to the terms and
conditions of this Indenture, to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to an irrevocable and unconditional offer, as described
below (the "CHANGE OF CONTROL OFFER"), at an offer price in cash (the "CHANGE OF
CONTROL PURCHASE PRICE") equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to and
including the date of purchase (the "CHANGE OF CONTROL PAYMENT") on a date that
is not more than 90 days after the occurrence of such Change of Control (the
"CHANGE OF CONTROL PAYMENT DATE").
(b) In the event of a Change of Control, the Company shall
follow the procedures set forth in this Section 11.1 as follows:
(i) the Change of Control Offer shall commence within 45
days following the occurrence of a Change of Control;
(ii) the Change of Control Offer shall remain open for at
least 20 Business Days following its commencement except to the extent that
a longer period is required by applicable law (but in any case not more
than 40 Business Days following its commencement);
(iii) within three Business Days following the expiration
of a Change of Control Offer, the Company shall purchase all of the
tendered Securities at the Change of Control Purchase Price;
(iv) if the Change of Control is on or after an interest
payment record date and on or before the related interest payment date, any
accrued interest (and Liquidated Damages, if any) will be paid to the
Person in whose name a Security is
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registered at the close of business on such record date, and no additional
interest will be payable to Securityholders who tender Securities pursuant
to the Change of Control Offer;
(v) the Company shall provide the Trustee and the Paying
Agent with written notice of the Change of Control Offer at least three
Business Days before the commencement of any Change of Control Offer; and
(vi) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(A) that the Change of Control Offer is
being made pursuant to this Section 11.1 and that all
Securities, or portions thereof, tendered will be accepted
for payment;
(B) the Change of Control Purchase
Price (including the amount of accrued but unpaid interest
(and Liquidated Damages, if any)) and the Change of Control
Payment Date;
(C) that any Security, or portion
thereof, not tendered or accepted for payment will continue
to accrue interest;
(D) that, unless the Company defaults
in depositing cash with the Paying Agent in accordance with
the last paragraph of this subsection (b), or such payment
is prevented for any reason, any Security, or portion
thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the
Change of Control Purchase Date;
(E) that Holders electing to have a
Security, or portion thereof, purchased pursuant to a Change
of Control Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying
Agent (which may not for purposes of this Section 11.1,
notwithstanding anything in this Indenture to the contrary,
be the Company or any Affiliate of the Company) at the
address specified in the notice prior to the expiration of
the Change of Control Offer;
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(F) that Holders will be entitled to
withdraw their election, in whole or in part, if the Paying
Agent receives, prior to the expiration of the Change of
Control Offer, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Securities the Holder is withdrawing and a statement
containing a facsimile signature and stating that such
Holder is withdrawing his election to have such principal
amount of Securities purchased;
(G) that Holders whose Securities are
purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the
Securities surrendered; and
(H) a brief description of the events
resulting in such Change of Control.
On or before the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment all Securities or portions thereof
properly tendered and not withdrawn pursuant to the Change of Control Offer, (2)
deposit with the Paying Agent an amount in cash equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered and (3)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate listing the Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Holder so tendered the Change of Control Payment for such Securities, and
the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered, if any, PROVIDED that each
such new Security will be in a principal amount of $1,000 or an integral
multiple thereof. Any Securities improperly tendered or withdrawn will be
delivered promptly by the Company to the Holder thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Any such Change of Control Offer shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Securities as a result of a Change of Control.
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ARTICLE XII
GUARANTEE
SECTION 12.1. GUARANTEE.
(a) In consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, to the fullest
extent permitted by applicable law, each of the Guarantors hereby irrevocably
and unconditionally guarantees (the "GUARANTEE") to the Trustee and its
successors and assigns, irrespective of the validity and enforceability
against the Company and the other Guarantors of this Indenture, the
Securities or the obligations of the Company under this Indenture or the
Securities, that: (x) the principal of and premium (if any), and interest on
the Securities will be paid in full when due, whether at the Maturity Date or
Interest Payment Date, by acceleration, call for redemption, upon a Change of
Control, an Asset Sale Offer or otherwise; (y) all other obligations of the
Company to the Holders or the Trustee under this Indenture or the Securities
will be promptly paid in full or performed, all in accordance with the terms
of this Indenture and the Securities; and (z) in case of any extension of
time of payment or renewal of any Securities or any of such other
obligations, they will be paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a Change of Control, an Offer to
Purchase or otherwise. Failing payment when due of any amount so guaranteed
for whatever reason, each Guarantor shall be obligated to pay the same before
failure so to pay becomes an Event of Default.
If the Company or a Guarantor defaults in the payment of the
principal of, premium, if any, or interest on, the Securities when and as the
same shall become due, whether upon maturity, acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, without the necessity of action by the Trustee or any Holder, each
Guarantor shall be required, jointly and severally, to promptly make such
payment in full.
(b) Each Guarantor hereby agrees to the fullest extent
permitted by applicable law, that its obligations with regard to this
Guarantee shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company or right to require the prior disposition of the assets of the
Company to meet its obligations, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this
Indenture.
(c) If any Holder or the Trustee is required by any
court or otherwise to return to either the Company or any Guarantor, or any
Custodian or similar official
76
acting in relation to either the Company or such Guarantor, any amount paid
by either the Company or such Guarantor to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between such Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Section
6.2 hereof for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to the
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2
hereof, those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors for the purpose of this
Guarantee.
(d) It is the intention of each Guarantor and the
Company that the obligations of each Guarantor hereunder shall be in, but not
in excess of, the maximum amount permitted by applicable law. Accordingly,
if the obligations in respect of the Guarantee would be annulled, avoided or
subordinated to the creditors of any Guarantor by a court of competent
jurisdiction in a proceeding actually pending before such court as a result
of a determination both that such Guarantee was made by such Guarantor
without fair consideration and, immediately after giving effect thereto, such
Guarantor was insolvent or unable to pay its debts as they mature or left
with an unreasonably small capital, then the obligations of such Guarantor
under such Guarantee shall be reduced by such court if and to the extent such
reduction would result in the avoidance of such annulment, avoidance or
subordination; PROVIDED, HOWEVER, that any reduction pursuant to this
paragraph shall be made in the smallest amount as is strictly necessary to
reach such result. For purposes of this paragraph, "fair consideration",
"insolvency", "unable to pay its debts as they mature", "unreasonably small
capital" and the effective times of reductions, if any, required by this
paragraph shall be determined in accordance with applicable law.
SECTION 12.2. EXECUTION AND DELIVERY OF GUARANTEE.
Each Guarantor shall, by virtue of such Guarantor's execution and
delivery of this Indenture or such Guarantor's execution and delivery of an
indenture supplement pursuant to Section 12.3 hereof, be deemed to have
signed on each Security issued hereunder the notation of guarantee set forth
on the form of the Securities attached hereto as Exhibit A to the same extent
as if the signature of such Guarantor appeared on such Security.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
guarantee set forth in Section 12.1 on behalf of each Guarantor. The
notation of a guarantee set forth on any Security shall be null and void and
of no further effect with respect to the guarantee of any Guarantor which,
pursuant to Section 12.4 or Section 12.5, is released from such Guarantee.
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SECTION 12.3. CERTAIN BANKRUPTCY EVENTS.
Each Guarantor hereby covenants and agrees, to the fullest extent
that it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
SECTION 12.4. LIMITATION ON MERGER, CONSOLIDATION, ETC. OF
GUARANTORS; RELEASE OF CERTAIN GUARANTORS.
No Guarantor shall consolidate or merge with or into (whether or
not such Guarantor is the surviving person) another person unless (i) subject
to the provisions of the following paragraph, the person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee, pursuant to which
such person shall unconditionally guarantee, on a senior subordinated basis,
all of such Guarantor's obligations under such Guarantor's Guarantee and the
Indenture on the terms set forth in the Indenture; and (ii) immediately
before and immediately after giving effect to such transaction on a PRO FORMA
basis, no Default or Event of Default shall have occurred or be continuing.
Notwithstanding the foregoing, upon the (i) sale or disposition
(whether by merger, stock purchase, asset sale or otherwise) of a Guarantor
(or all of its assets) to an entity which is not a Subsidiary of the Company
or upon the dissolution of any Guarantors which sale, disposition or
dissolution is otherwise in compliance with this Indenture, or (ii) the
release of any Guarantor from its obligations as a guarantor under the Credit
Agreement, so long as (a) no Default or Event of Default shall have occurred
and be continuing at the time of, or would occur after giving effect in a PRO
FORMA basis to, such release, (b) the Company is permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
Test set forth in Section 4.11 on the date when such release occurs, and (c)
the amount of Indebtedness outstanding under the Credit Agreement for at
least 30 days prior to the time of such release is at least $250 million,
such Guarantor will be deemed released from its obligations under its
Guarantee of the Securities; PROVIDED, HOWEVER, that any such termination
shall occur only to the extent that all obligations of such Guarantor under
all of its guarantees of, and under all of its pledges of assets or other
security interests which secure, any Indebtedness of the Company shall also
terminate upon such sale, disposition or dissolution.
SECTION 12.5. FUTURE GUARANTORS.
Upon (i) the acquisition by the Company or Guarantor of the Capital
Stock of any Person, if, as a result of such acquisition, such Person becomes
a Subsidiary of the Company or any Guarantor or (ii) the last day of any
fiscal quarter during which any Subsidiary of the
78
Company that is not a Guarantor as of such date and has not previously been
released as a Guarantor pursuant to Section 12.4 hereof becomes a Subsidiary,
such Subsidiary (any such Subsidiary, hereinafter being called a "FUTURE
SUBSIDIARY GUARANTOR") shall unconditionally guarantee the obligations of the
Company with respect to payment and performance of the Securities and the
other obligations of the Company under this Indenture to the same extent that
such obligations are guaranteed by the other Guarantors pursuant to Section
12.1 hereof; and, within ten Business Days of the date of such occurrence,
such Future Subsidiary Guarantor shall execute and deliver to the Trustee a
supplemental indenture, which shall be in a form satisfactory to the Trustee,
making such Future Subsidiary Guarantor a party to this Indenture; PROVIDED,
HOWEVER, that the foregoing provisions of this Section 12.5 shall not apply
to (A) (x) Subsidiaries of the Company or any Guarantor having total assets
with a book value of less than $500,000 and that do not guarantee any Senior
Debt and (y) any Subsidiary which is not then either a Guarantor or a
guarantor under the Credit Agreement or other Indebtedness under any
agreement or instrument to which the Company is a party or by which the
Company is bound, if (i) such Subsidiary is not required by the terms of the
Credit Agreement or such other agreement or instrument to become a guarantor
under the Credit Agreement or such other agreement or instrument and (ii) the
conditions for releasing a Guarantor from its obligations as a Guarantor of
the Notes specified in clause (ii) in the second paragraph of Section 12.4
are then satisfied) and (B) Sun Systems, Inc. and each CareerStaff Company
and each Foreign Company, if such person does not (i) guarantee or otherwise
becomes liable for Indebtedness of the Company or any Guarantor (other than,
in the case of CareerStaff Companies, Indebtedness under the Credit
Agreement), and (ii) does not cause more than two-thirds of its Equity
Interests to be pledged to secure Indebtedness of the Company or any
Guarantor (other than, in the case of CareerStaff Companies, Indebtedness
under the Credit Agreement).
ARTICLE XIII
SUBORDINATION
SECTION 13.1. SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company and the Guarantors and each Holder, by its acceptance
of Securities, agree that (a) the payment of the principal of and interest on
the Securities and (b) any other payment in respect of the Securities,
including on account of the acquisition or redemption of the Securities by
the Company and the Guarantors (including, without limitation, pursuant to
Section 4.14, 11.1, or Article XII) is subordinated, to the extent and in the
manner provided in this Article XIII, to the prior payment in full in cash or
Cash Equivalents of all Senior Debt of the Company and the Guarantors and
that these subordination provisions are for the benefit of the holders of
Senior Debt.
This Article XIII shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue
to hold, Senior Debt, and such provisions
79
are made for the benefit of the holders of Senior Debts and such holders are
made obligees hereunder and any one or more of them may enforce such
provisions.
SECTION 13.2. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment (by set-off or otherwise) shall be made
by or on behalf of the Company or a Guarantor, as applicable, on account of
the principal of, premium, if any, or interest on the Securities (including
any repurchases of Securities), or on account of the redemption provisions of
the Securities, for cash or property (other than Junior Securities or from a
Defeasance Trust), (i) upon the maturity of any Senior Debt of the Company or
such Guarantor, as applicable, by lapse of time, acceleration (unless waived)
or otherwise, unless and until all principal of, premium, if any, and the
interest on such Senior Debt are first paid in full in cash or Cash
Equivalents (or such payment is duly provided for) or otherwise to the extent
holders accept satisfaction of amounts due by settlement in other than cash
or Cash Equivalents, or (ii) in the event of default in the payment of any
principal of, premium, if any, or interest on Senior Debt of the Company or
such Guarantor when it becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise (a "PAYMENT
DEFAULT"), unless and until (in the case of both (i) and (ii)) such Payment
Default has been cured or waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default (other
than a Payment Default) that permits the holder of Senior Debt to declare
such Senior Debt to be due and payable and (ii) written notice of such event
of default given to the Company and the Trustee by the Representative under
the Credit Agreement or the holders of an aggregate of at least $50 million
principal amount outstanding of any other Senior Debt or their representative
(a "PAYMENT NOTICE"), then, unless and until such event of default has been
cured or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company or any Guarantor which
is an obligor under such Senior Debt on account of the principal of, premium,
if any, or interest on the Securities (including any repurchases of any of
the Securities), or on account of the redemption provisions of the
Securities, in any such case, other than payments made with Junior Securities
or from a Defeasance Trust. Notwithstanding the foregoing, unless the Senior
Debt in respect of which such event of default exists has been declared due
and payable in its entirety within 179 days after the Payment Notice is
delivered as set forth above (the "PAYMENT BLOCKAGE PERIOD") (and such
declaration has not been rescinded or waived), at the end of the Payment
Blockage Period, the Company and the Guarantors shall be required to pay all
sums not paid to the Holders of the Securities during the Payment Blockage
Period due to the foregoing prohibitions and to resume all other payments as
and when due on the Securities. Any number of Payment Notices may be given;
PROVIDED that (i) not more than one Payment Notice shall be given within a
period of any 360 consecutive days, and (ii) no default that existed upon the
date of such Payment Notice or the commencement of such Payment Blockage
Period (whether or not such event of default is on the same issue of Senior
Debt) shall be made the basis for the commencement of any other Payment
Blockage Period unless such other Payment Blockage Period is commenced by a
Payment Notice from the Representative under the Credit
80
Agreement and such event of default shall have been cured or waived for a
period of at least 90 consecutive days.
(c) Upon any distribution of assets of the Company or
any Guarantor upon any dissolution, winding up, total or partial liquidation
or reorganization of the Company or a Guarantor, whether voluntary or
involuntary, in bankruptcy, insolvency, receivership or a similar proceeding
or upon assignment for the benefit of creditors or any marshalling of assets
or liabilities, the provisions of Section 13.3 of this Indenture shall apply.
The subordination provisions hereof shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any
Senior Debt is rescinded or must otherwise be returned by any holder of such
Senior Debt upon the insolvency, bankruptcy or reorganization of the Company,
any Guarantor or otherwise, all as though such payment has not been made.
SECTION 13.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL
SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company or any Guarantor or
upon any dissolution, winding up, total or partial liquidation or
reorganization of the Company or a Guarantor, whether voluntary or
involuntary, in bankruptcy, insolvency, receivership or a similar proceeding
or upon assignment for the benefit of creditors or any marshalling of assets
or liabilities:
(a) the holders of all Senior Debt of the Company or
such Guarantor, as applicable, will first be entitled to receive payment in
full in cash or Cash Equivalents (or have such payment duly provided for to
the satisfaction of such holders) or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents before the Holders are entitled to receive any payment on account
of the principal of, premium, if any, and interest on the Securities or any
Obligation in respect of the Securities (other than Junior Securities or from
a Defeasance Trust);
(b) any payment or distribution of assets of the Company
or such Guarantor of any kind or character from any source, whether in cash,
property or securities (other than Junior Securities or from a Defeasance
Trust) to which the Holders or the Trustee on behalf of the Holders would be
entitled (by set-off or otherwise), except for the provisions of this Article
XIII, shall be paid by the liquidating trustee or agent or other person
making such a payment or distribution directly to the holders of such Senior
Debt or their representative to the extent necessary to make payment in full
(or have such payment duly provided for) on all such Senior Debt remaining
unpaid, after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt; and
(c) in the event that, notwithstanding the foregoing,
any payment or distribution of assets of the Company or any Guarantor (other
than Junior Securities or from a Defeasance Trust) shall be received by the
Trustee or the Holders at a time when such payment
81
or distribution is prohibited by the foregoing provisions, such payment or
distribution shall be held in trust for the benefit of the holders of such
Senior Debt, and shall be paid or delivered by the Trustee or such Holders,
as the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Debt may have been issued, ratably according to
the aggregate principal amounts remaining unpaid on account of such Senior
Debt held or represented by each, for application to the payment of all such
Senior Debt remaining unpaid, to the extent necessary to pay or to provide
for the payment of all such Senior Debt in full in cash or Cash Equivalents
or otherwise to the extent holders accept satisfaction of amounts due by
settlement in other than cash or Cash Equivalents after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt.
SECTION 13.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS
OF SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt of the Company or any Guarantor as provided herein, the Holders
of Securities shall be subrogated to the rights of the holders of such Senior
Debt to receive payments or distributions of assets of the Company applicable
to the Senior Debt until all amounts owing on the Securities shall be paid in
full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Senior Debt by or on behalf of the
Company or any Guarantor, or by or on behalf of the Holders by virtue of this
Article XIII, which otherwise would have been made to the Holders shall, as
between the Company or any Guarantor and the Holders, be deemed to be payment
by the Company or any Guarantor or on account of such Senior Debt, it being
understood that the provisions of this Article XIII are and are intended
solely for the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of such Senior Debt, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XIII shall have
been applied, pursuant to the provisions of this Article XIII, to the payment
of amounts payable under Senior Debt of the Company or any Guarantor, then
the Holders shall be entitled to receive from the holders of such Senior Debt
any payments or distributions received by such holders of Senior Debt in
excess of the amount sufficient to pay all amounts payable under or in
respect of such Senior Debt in full in cash or Cash Equivalents.
SECTION 13.5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS
UNCONDITIONAL.
Nothing contained in this Article XIII or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company and any Guarantors and the Holders, the obligation of each such
Person, which is absolute and unconditional, to pay to the Holders the
principal of, premium, if any, and interest on the Securities as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors
of the Company and the Guarantors other than the holders of the Senior Debt,
nor shall anything herein or therein prevent the Trustee or any Holder
82
from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article XIII, of the holders of Senior Debt in respect of cash, property or
securities of the Company and the Guarantors received upon the exercise of
any such remedy. Notwithstanding anything to the contrary in this Article
XIII or elsewhere in this Indenture or in the Securities, upon any
distribution of assets of the Company and the Guarantors referred to in this
Article XIII, the Trustee, subject to the provisions of Sections 7.1 and 7.2,
and the Holders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of
the liquidating Trustee or agent or other Person making any distribution to
the Trustee or to the Holders for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt
and other Indebtedness of the Company or any 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 XIII so long as such court
has been apprised of the provisions of, or the order, decree or certificate
makes reference to, the provisions of this Article XIII. Nothing in this
Section 13.5 shall apply to the claims of, or payments to, the Trustee under
or pursuant to Section 7.7.
SECTION 13.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED
IN ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or
by the Trustee unless and until a Trust Officer of the Trustee or any Paying
Agent shall have received, no later than one Business Day prior to such
payment written notice thereof from the Company or from one or more holders
of Senior Debt or from any representative therefor and, prior to the receipt
of any such written notice, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, shall be entitled in all respects conclusively to
assume that no such fact exists.
SECTION 13.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent (i) the making of such deposit by the Company shall not be
in contravention of any term or provision of the Credit Agreement and (ii)
allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article XIII. Otherwise, any deposit of
assets with the Trustee or the Agent (whether or not in trust) for the
payment of principal of or interest on any Securities shall be subject to the
provisions of Sections 13.1, 13.2, 13.3 and 13.4; PROVIDED that, if prior to
one Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including without
limitation, the payment of either principal of or interest on any Security)
the Trustee or such Paying Agent shall not have received with respect to such
assets the written notice provided for in Section 13.6, then the Trustee or
such Paying Agent shall have full power and authority to receive such assets
and to apply the same to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by it on
or after such date.
83
SECTION 13.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR
OMISSIONS OF THE COMPANY, THE GUARANTORS OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to
enforce subordination provisions contained in this Article XIII shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or any Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company or any
Guarantor with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The
holders of Senior Debt may extend, renew, modify or amend the terms of the
Senior Debt or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Company and the Guarantors, all
without affecting the liabilities and obligations of the parties to this
Indenture or the Holders.
SECTION 13.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained
in this Article XIII and to protect the rights of the Holders pursuant to
this Indenture, and appoints the Trustee his attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation
or reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or any other marshalling of assets and liabilities of the
Company or any Guarantor), the immediate filing of a claim for the unpaid
balance of his Securities in the form required in said proceedings and cause
said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file such claim or claims, then the holders of
the Senior Debt or their representative are or is hereby authorized to have
the right to file and are or is hereby authorized to file an appropriate
claim for and on behalf of the Holders of said Securities. Nothing herein
contained shall be deemed to authorize the Trustee or the holders of Senior
Debt or their representative to authorize or consent to or accept or adopt on
behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any
Holder thereof, or to authorize the Trustee or the holders of Senior Debt or
their representative to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 13.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT.
The Trustee shall be entitled to all of the rights set forth in
this Article XIII in respect of any Senior Debt at any time held by it to the
same extent as any other holder of Senior Debt, and nothing in this Indenture
shall be construed to deprive the Trustee of any of its rights as such holder.
84
SECTION 13.11. ARTICLE XIII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium,
if any, or interest on the Securities by reason of any provision of this
Article XIII shall not be construed as preventing the occurrence of a Default
or an Event of Default under Section 6.1 or in any way limit the rights of
the Trustee or any Holder to pursue any other rights or remedies with respect
to the Securities.
SECTION 13.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR
DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other
than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of Securities or the
Company, any Guarantor or any other Person, cash, property or securities to
which any holders of Senior Debt shall be entitled by virtue of this
Article XIII or otherwise. Nothing in this Section 13.12 shall affect the
obligation of any other such Person to hold such payment for the benefit of,
and to pay such payment over to, the holders of Senior Debt or their
representative. In the event of any conflict between the fiduciary duty of
the Trustee to the Holders of Securities and to the holders of Senior Debt,
the Trustee is expressly authorized to resolve such conflict in favor of the
Holders.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 14.2. NOTICES.
Any notices or other communications to the Company or any Guarantor
or the Trustee required or permitted hereunder shall be in writing, and shall
be sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
Sun Healthcare Group, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
85
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
U.S. Bank Trust National Association
U.S. Bank Trust Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or
made as of the date so delivered, if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five
Business Days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to
have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as
it appears on the registration books of the Registrar and shall be
sufficiently given to him 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 14.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA Section 312(c).
86
SECTION 14.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guarantor to
the Trustee to take any action under this Indenture, such Person 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 met; 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 met.
SECTION 14.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person 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 Person, 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 met; and
(4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been met; PROVIDED,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 14.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules
for its functions.
87
SECTION 14.7. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such
place, payment may be made at such place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 14.8. GOVERNING LAW.
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH
OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES,
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE
COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY AND THE
GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 14.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 14.10. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, director,
officer or employee, as such, past, present or future, of the Company or any
Guarantor, or any successor entity, shall have any personal liability in
respect of the obligations of the Company and the Guarantors under the
Securities, this Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation by reason of his, her or its
status as such partner,
88
incorporator, stockholder, director, officer or employee. Each Securityholder
by accepting a Security waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Securities.
SECTION 14.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 14.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 14.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Securities or in the Guarantees shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 14.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 14.15. QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in
accordance with the terms and conditions of the Registration Rights Agreement
and shall pay all costs and expenses (including attorneys' fees for the
Company and the Trustee) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the
Securities and printing this Indenture and the Securities. The Trustee shall
be entitled to receive from the Company any such Officers' Certificates,
Opinions of Counsel or other documentation as it may reasonably request in
connection with any such qualification of this Indenture under the TIA.
89
SECTION 14.16. REGISTRATION RIGHTS.
Certain Holders of the Securities may be entitled to certain
registration rights with respect to such Securities pursuant to, and subject
to the terms of, the Registration Rights Agreement.
90
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
SUN HEALTHCARE GROUP, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
GUARANTORS, as listed on Schedule I
hereto
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer of
the Guarantors except for
Accelerated Care Plus, LLC
and Hospital Therapy
Service of Michigan, LLC of
which he is Senior Vice
President and Chief
Executive Officer of each
of their members HC, Inc.
and Cal-Med, Inc. and
SunCare Respitory Services,
Inc., respectively
SCHEDULE I
GUARANTORS
Accelerated Care Plus, LLC
Americare Homecare, Inc.
Americare of West Virginia, Inc.
Bay Colony Health Service, Inc.
▇▇▇▇▇▇▇ Health Care Corp.
Bergen Eldercare, Inc.
▇▇▇▇▇▇▇▇ Enterprises, Inc.
Brittany Rehabilitation Center, Inc.
Cal-Med, Inc.
Care Enterprises, Inc.
Care Enterprises West
Care Home Health Services
▇▇▇▇▇▇▇▇▇▇ Rehabilitation Center
Circleville Health Care Corp.
Clipper Home of North ▇▇▇▇▇▇, Inc.
Clipper Home of Portsmouth, Inc.
Clipper Home of Rochester, Inc.
Clipper Home of Wolfeboro, Inc.
Coalinga Rehabilitation Center
Community Re-Entry Services of Cortland, Inc.
Covina Rehabilitation Center
▇▇▇▇▇▇ Health Care Corp.
Evergreen Rehabilitation Center
Executive Pharmacy Services, Inc.
Fairfield Rehabilitation Center
First Class Pharmacy, Inc.
Fullerton Rehabilitation Center
Glendora Rehabilitation Center
Glenville Health Care, Inc.
Golan Healthcare Group, Inc.
▇▇▇▇▇▇▇ Nursing Home, Inc.
Grand Terrace Rehabilitation Center
G-WZ of Stamford, Inc.
Hallmark Health Services, Inc.
Harbor View Rehabilitation Center
Hawthorne Rehabilitation Center
HC, Inc.
Heritage Rehabilitation Center
Heritage-Torrance Rehabilitation Center
HTA of New Jersey, Inc.
I-1
Huntington Beach Convalescent Hospital
▇▇▇▇▇▇▇ Rehabilitation Center, Inc.
▇▇▇▇▇-Mar Rehabilitation Center
Living Services, Inc.
LTC Staffinders, Inc.
Manatee Springs Nursing Center, Inc.
▇▇▇▇▇▇ Health Care Corp.
Masthead Corporation
Meadowbrook Rehabilitation Center
Mediplex Atlanta Rehabilitation Institute, Inc.
Mediplex Management, Inc.
Mediplex Management of Palm Beach County, Inc.
Mediplex Management of Port St. Lucie, Inc.
Mediplex Management of Texas, Inc.
Mediplex of Concord, Inc.
Mediplex of Connecticut, Inc.
Mediplex of Kentucky, Inc.
Mediplex of Maryland, Inc.
Mediplex of Massachusetts, Inc.
Mediplex of New Hampshire, Inc.
Mediplex of New Jersey, Inc.
Mediplex of New York, Inc.
Mediplex of Ohio, Inc.
Mediplex of Tennessee, Inc.
Mediplex of Virginia, Inc.
Mediplex Rehabilitation of Massachusetts, Inc.
New Bedford Nursing Center, Inc.
New Lexington Health Care Corp.
Newport Beach Rehabilitation Center
Nursing Home, Inc.
Oakview Treatment Centers of Kansas, Inc.
Oasis Mental Health Treatment Center, Inc.
Orange Rehabilitation Hospital, Inc.
Pacific Beach Physical Therapy, Inc.
Paradise Rehabilitation Center, Inc.
Paso ▇▇▇▇▇▇ Rehabilitation Center
Peachwood Physical Therapy, Inc.
Pharmacy Factors of California, Inc.
Pharmacy Factors of Florida, Inc.
Pharmacy Factors of Texas, Inc.
P.M.N.F. Management, Inc.
▇▇▇▇▇▇ Health Care Corp.
Quality Care Holding Corporation
Quality Nursing Care of Massachusetts, Inc.
I-2
Regency Health Services, Inc.
Regency High School, Inc.
Regency - North Carolina, Inc.
Regency Outpatient Services, Inc.
Regency Rehab Hospitals, Inc.
Regency Rehab Properties, Inc.
Regency Rehabilitation Management & Consulting Services, Inc.
Regency - Tennessee, Inc.
RHS Management Corporation
Rosewood Rehabilitation Center, Inc.
Salem Health Care Corp.
San Bernardino Rehabilitation Hospital, Inc.
Savannas Hospital Limited Partnership
Shandin Hills Rehabilitation Center
SHG International Holdings, Inc.
Special Medical Services, Inc.
▇▇▇▇▇▇▇▇ Land, Inc.
Stockton Rehabilitation Center, Inc.
SunAlliance Healthcare Services, Inc.
SunBridge, Inc.
Sun Care Corp.
SunCare Respiratory Services, Inc.
SunChoice Medical Supply, Inc.
SunDance Rehabilitation Corporation
SunFactors, Inc.
Sun Healthcare (Europe) LLC
Sun Healthcare, Inc.
Sun Lane Purchase Corporation
Sunmark of New Mexico, Inc.
SunPlus Home Health Services, Inc.
SunQuest Consulting, Inc.
Sunrise Healthcare Corporation
Sunrise Healthcare of Colorado, Inc.
Sunrise Healthcare of Florida, Inc.
Sunrise Rehab of Colorado, Inc.
SunScript Pharmacy Corporation
SunSolution, Inc.
Sunspectrum Outpatient Rehabilitation-Concord, Inc.
The Mediplex Group, Inc.
Vista ▇▇▇▇▇ Rehabilitation Center, Inc.
West Jersey/Mediplex Rehabilitation L.P.
Willowview Rehabilitation Center
Worcester Nursing Center, Inc.
I-3
EXHIBIT A
[FORM OF SECURITY]
SUN HEALTHCARE GROUP, INC.
9 3/8% SERIES A(1) SENIOR SUBORDINATED NOTE DUE 2008
CUSIP No. ______________
No. $
Sun Healthcare Group, Inc., a Delaware corporation (hereinafter
called the "COMPANY", which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____, or registered assigns, the principal sum of _____ Dollars, on May 1,
2008.
Interest Payment Dates: May 1 and November 1, commencing November 1,
1998.
Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated:
SUN HEALTHCARE GROUP, INC.,
a Delaware corporation
By:
-------------------------------------
Name:
Title:
Attest:
----------------------
Name:
Title:
---------------------
(1) Series A should be replaced with Series B in the Exchange Securities.
A-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By
----------------------------------
Authorized Signatory
Dated:
A-2
SUN HEALTHCARE GROUP, INC.
9 3/8% SERIES A(2) SENIOR SUBORDINATED NOTE DUE 2008
Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) ("▇▇▇"), 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 requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or 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.(3)
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT)(A "QIB"), OR (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING
THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS
IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO
----------------------
(2) Series A should be replaced with Series B in the Exchange Security.
(3) This paragraph should only be added if the Security is issued in global
form.
A-3
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
STATE SECURITIES LAWS OR (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING RESTRICTIONS.(4)
1. INTEREST.
Sun Healthcare Group, Inc., a Delaware corporation (hereinafter
called the "COMPANY," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 9 3/8% per annum. To the extent it is lawful,
the Company promises to pay interest on any interest payment due but unpaid
on such principal amount at a rate of 9 3/8% per annum compounded
semi-annually.
The Company will pay interest semi-annually on May 1 and November 1
of each year (each, an "INTEREST PAYMENT DATE"), commencing November 1, 1998.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities,
from the date of the original issuance. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
----------------------
(4) This paragraph should be included only for the Initial Securities.
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2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Except as provided below, the Company shall pay principal and
interest in such coin or currency of the United States of America as at the
time of payment shall be legal tender for payment of public and private debts
("CASH"). The Securities will be payable as to principal, premium and
interest at the office or agency of the Company maintained for such purpose
within the Borough of Manhattan, the City and State of New York or, at the
option of the Company, payment of principal, premium and interest may be made
by check mailed to the Holders at their addresses set forth in the register
of Holders, and PROVIDED that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest
and premium on all Global Securities and all other Securities the Holders of
which shall have provided wire transfer instructions to the Company or the
Paying Agent at least 5 Business Days prior to the relevant record date.
3. PAYING AGENT AND REGISTRAR.
Initially, First Trust National Association (the "TRUSTEE"), will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any
of its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
May 4, 1998 (the "INDENTURE"), among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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, as in effect on the date of the
Indenture. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and said Act for a statement of
them. The Securities are senior subordinated obligations of the Company
limited in aggregate principal amount to $125,000,000 (or up to $150,000,000
if the over-allotment option is exercised). The Securities are, to the extent
and in the manner provided in the Indenture, subordinate and subject in right
of payment to the prior payment in full of all Senior Debt of the Company,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be provided
in the Indenture and (c) appoints the Trustee his attorney-
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in-fact for such purpose. The Securities are guaranteed on a senior
subordinated basis by the Guarantors.
5. REDEMPTION.
The Securities may be redeemed in whole or from time to time in
part at any time on and after May 1, 2003, at the option of the Company, at
the Redemption Price (expressed as a percentage of principal amount) set
forth below with respect to the indicated Redemption Date, in each case
(subject to the right of Holders of record on a Record Date that is on or
prior to such Redemption Date to receive interest due on the Interest Payment
Date to which such Record Date relates), plus any accrued but unpaid interest
to the Redemption Date. The Securities may not be so redeemed prior to May
1, 2003.
If redeemed during
the 12-month period
commencing May 1, Redemption Price
------------------------ --------------------
2003 . . . . . . . . . . . . . . . . . 104.688%
2004 . . . . . . . . . . . . . . . . . 103.126
2005 . . . . . . . . . . . . . . . . . 101.563
2006 and thereafter . . . . . . . . . 100.0000%
Any such redemption will comply with Article III of the Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be sent by first class mail, at least 30
days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption
shall have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price, plus any accrued and unpaid interest to the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may
register the transfer of, or
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exchange Securities in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not register the transfer of or
exchange any Securities (a) selected for redemption except the unredeemed
portion of any Security being redeemed in part or (b) for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase or
redemption and ending at the close of business on the day of such mailing.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of
it for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
Except as set forth in the Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, cash,
U.S. Government Obligations or a combination thereof, in such amounts as will
be sufficient in the opinion of a nationally recognized firm of independent
public accountants selected by the Trustee, to pay the principal of, premium,
if any, and interest on the Securities to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will
be discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding their obligation to pay the
principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in the Indenture, the
Company may elect to have its obligations discharged with respect to
outstanding Securities.
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with
any provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may under certain
circumstances amend or supplement the Indenture or the Securities to, among
other things,
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cure any ambiguity, defect or inconsistency, or make any other change that
does not adversely affect the rights of any Holder of a Security.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and the Guarantors to, among other things, Incur additional
Indebtedness and issue Preferred Stock, pay dividends or make certain other
Restricted Payments, enter into certain transactions with Affiliates, incur
Liens, sell assets and subsidiary stock, merge or consolidate with any other
Person or transfer (by lease, assignment or otherwise) substantially all of
the properties and assets of the Company. The limitations are subject to a
number of important qualifications and exceptions. The Company must
periodically report to the Trustee on compliance with such limitations.
13. RANKING.
Payment of principal, premium, if any, and interest on the
Securities is subordinated, in the manner and to the extent set forth in the
Indenture, to the prior payment in full of all Senior Debt.
14. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to offer to purchase on the Change of Control Payment Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the Change of Control Payment
Date. Holders of Securities will receive a Change of Control Offer from the
Company prior to any related Change of Control Payment Date and may elect to
have such Securities purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of
the Company, the Guarantors or any of their respective Subsidiaries to sell
assets and subsidiary stock. In the event the proceeds from a permitted
Asset Sale exceed certain amounts, as specified in the Indenture, the Company
will be required either to reinvest the proceeds of such Asset Sale in a
Related Business, repay certain Indebtedness or to make an offer to purchase
each Holder's Securities at 100% of the principal amount thereof, plus
accrued interest, if any, to the purchase date.
15. NOTATION OF GUARANTEE.
As set forth more fully in the Indenture, the Persons constituting
Guarantors from time to time, in accordance with the provisions of the
Indenture, unconditionally and jointly and severally guarantee, in accordance
with Section 12.1 of the Indenture, to the
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Holder and to the Trustee and its successors and assigns, that (i) the
principal of and interest on the Security will be paid, whether at the
Maturity Date or Interest Payment Dates, by acceleration, call for redemption
upon a Change of Control Offer, upon an Asset Sale Offer or otherwise, and
all other obligations of the Company to the Holder or the Trustee under the
Indenture or this Security will be promptly paid in full or performed, all in
accordance with the terms of the Indenture and this Security, and (ii) in the
case of any extension of payment or renewal of this Security or any of such
other obligations, they will be paid in full when due or performed in
accordance with the terms of such extension or renewal, whether at the
Maturity Date, as so extended, by acceleration, call for redemption, upon a
Change of Control Offer, upon an Asset Sale Offer or otherwise. Such
guarantees shall cease to apply, and shall be null and void, with respect to
any Guarantor who, pursuant to Article XII of the Indenture, is released from
its guarantees, or whose guarantees otherwise cease to be applicable pursuant
to the terms of the Indenture.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
16. DEFAULTS AND REMEDIES.
If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities may declare all the Securities to be due and payable
immediately; PROVIDED that so long as at least $15 million of Senior Debt is
outstanding under the Credit Agreement, no acceleration of the maturity of
the Securities shall be effective until the earlier of (i) five days after
notice of acceleration is received by the Representative under the Credit
Agreement (unless such Event of Default is cured or waived prior thereto) and
(ii) the date on which any Senior Debt under the Credit Agreement is
accelerated. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency with respect
to the Company or any of its Significant Subsidiaries, all outstanding
Securities will become due and payable without further action or notice.
Securityholders may not enforce the Indenture, the Securities or the
Guarantees except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for
the Company any
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Guarantor, any of their Subsidiaries or any of their respective Affiliates,
and may otherwise deal with such Persons as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, partner,
director, officer or employee, as such, past, present or future, of the
Company or any Guarantor, or any successor entity, shall have any personal
liability in respect of the obligations of the Company and the Guarantors
under the Securities or the Indenture by reason of his, her or its status as
such partner, incorporator, stockholder, director, officer or employee. Each
Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or
authenticating Agent signs the certificate of authentication on the other
side of this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP
numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.(5)
In addition to the rights provided to Holders of Securities under
the Indenture, Holders of Securities shall have all the rights set forth in
the Registration Rights Agreement.
23. GOVERNING LAW.
___________________
(5) This paragraph should be included only for the Initial Securities.
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The Indenture and the Securities shall be governed by and construed
in accordance with the internal laws of the State of New York.
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[FORM OF ASSIGNMENT]
I or we assign this Security to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
---------------------------------
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Securities and Exchange Commission of the effectiveness of a registration
statement under the Securities act of 1933, as amended (the "Securities Act")
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) July 1, 1999, the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that:
[Check One]
/ / (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by Rule 144A
thereunder.
/ / (b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the conditions of
transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and
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until the conditions to any such transfer or registration set forth herein
and in Section 2.6 of the Indenture shall have been satisfied.(6)
Dated: Signed:
---------------------------- ----------------------------------
------------------------------------------------------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee (*)
The undersigned represents and warrants that it is purchasing this Security for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.(7)
Dated:
-------------------- -----------------------------------
NOTICE: To be executed
by an executive officer
______________________
(6) This paragraph should be included only for the Initial Securities.
NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(I) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP) or (iv) in such other guarantee
program acceptable to the Trustee.
(7) This paragraph should be included only for the Initial Securities.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article XI of the Indenture, check the appropriate
box: / / Section 4.14 / / Article XI.
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.14 or Article XI of the Indenture, as the case
may be, state the amount you want to be purchased: $________.
Date: Signature:
--------------------- -----------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee**
____________________________
** NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(I) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP) or (iv) in such other guarantee
program acceptable to the Trustee.
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES (8)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Principal Security officer of
Date of Amount Amount following Trustee or
Exchange of this Global of this such decrease Securities
Security Global or increase) Custodian
Security
-----------------------------------------------------------------------------
______________________________
(8) This schedule should only be added if the Security is issued in global
form.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
TRANSFER RESTRICTED SECURITIES (9)
Re: 9 3/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2008 OF SUN HEALTHCARE GROUP,
INC.
This Certificate relates to $______ principal amount of Securities held in
(check applicable space) _____ book-entry or ______ definitive form by
_________________ (the "TRANSFEROR").
The Transferor (check applicable box):
/ / has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depositary a Security
or Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above-captioned Securities and as provided in Section
2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (within the meaning of Rule 144A promulgated under the Securities Act),
that is aware that any sale of Securities to it will be made in reliance on Rule
144A under the Securities Act and that is acquiring such Transfer Restricted
Security for its own account, or for the account of another such "qualified
institutional buyer" (in satisfaction of Section 2.06(a)(ii)(B) or Section 2.06
(d)(i)(B) of the Indenture).
/ / Such Security is being transferred pursuant to an exemption from
registration in accordance with Rule 144, or outside the United States in an
Offshore Transaction in compliance with Rule 904 under the Securities Act, or
pursuant to an
________________________________________
(9) This Certificate shall be included only for Initial Securities.
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effective registration statement under the Securities Act (in satisfaction of
Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act and
in accordance with applicable securities laws of the states of the United
States, other than as provided in the immediately preceding paragraph. An
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.6(a)(ii)(D) or Section 2.6(d)(i)(D) of the Indenture).
------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------
Date:
-----------------------------------
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES (10)
Re: 9 3/8% SERIES B SENIOR SUBORDINATED NOTES
DUE 2008 OF SUN HEALTHCARE GROUP, INC.
This Certificate relates to $______
principal amount of Securities held in (check applicable box) _____
book-entry or ______ definitive form by _____ (the "TRANSFEROR").
The Transferor (check applicable box):
/ / has requested the Trustee by written
order to deliver in exchange for its beneficial interest in the Global Security
held by the Depositary a Security or Securities in definitive, registered form
of authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above); or
/ / has requested the Registrar by written
order to exchange or register the transfer of a Security or Securities.
______________________________
(10) This certificate shall be included only for
the Exchange Securities.
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