EXHIBIT 4.1
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FOUNTAIN VIEW, INC.
SENIOR SUBORDINATED SECURED INCREASING RATE NOTES DUE 2008
INDENTURE
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Dated as of August 19, 2003
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U.S. Bank National Association
Trustee
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................ 1
Section 1.01. Definitions........................................................................... 1
Section 1.02. Other Definitions..................................................................... 21
Section 1.03. Terms of TIA.......................................................................... 22
Section 1.04. Rules of Construction................................................................. 23
ARTICLE 2. THE NOTES............................................................................................. 24
Section 2.01. Form and Dating....................................................................... 24
Section 2.02. Execution and Authentication.......................................................... 25
Section 2.03. Registrar and Paying Agent............................................................ 26
Section 2.04. Paying Agent to Hold Money in Trust................................................... 26
Section 2.05. Holder Lists.......................................................................... 26
Section 2.06. Transfer and Exchange................................................................. 27
Section 2.07. Replacement Notes..................................................................... 30
Section 2.08. Outstanding Notes..................................................................... 31
Section 2.09. Treasury Notes........................................................................ 31
Section 2.10. Temporary Notes....................................................................... 31
Section 2.11. Cancellation.......................................................................... 32
Section 2.12. Defaulted Interest.................................................................... 32
Section 2.13. CUSIP Numbers......................................................................... 32
Section 2.14. Computation of Interest............................................................... 32
ARTICLE 3. REDEMPTION AND PREPAYMENT............................................................................. 33
Section 3.01. Notices to Trustee.................................................................... 33
Section 3.02. Selection of Notes to Be Redeemed..................................................... 33
Section 3.03. Notice of Redemption.................................................................. 33
Section 3.04. Effect of Notice of Redemption........................................................ 34
Section 3.05. Deposit of Redemption Price........................................................... 34
Section 3.06. Notes Redeemed in Part................................................................ 34
Section 3.07. Optional Redemption................................................................... 35
Section 3.08. Mandatory Redemptions................................................................. 35
Section 3.09. Offer to Purchase by Application of Excess Proceeds................................... 36
ARTICLE 4. COVENANTS............................................................................................. 38
Section 4.01. Payment of Notes...................................................................... 38
Section 4.02. Maintenance of Office or Agency....................................................... 38
Section 4.03. Reports; Fiscal Year.................................................................. 38
Section 4.04. Compliance Certificate................................................................ 39
Section 4.05. Taxes................................................................................. 40
Section 4.06. Stay, Extension and Usury Laws........................................................ 40
Section 4.07. Restricted Payments................................................................... 40
Section 4.08. Limitation on Restricted Investments.................................................. 41
Section 4.09. Dividend and Other Payment Restrictions Affecting Subsidiaries........................ 43
Section 4.10. Incurrence of Indebtedness and Issuance of Preferred Stock............................ 44
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Section 4.11. Asset Sales........................................................................... 47
Section 4.12. Transactions with Affiliates.......................................................... 48
Section 4.13. Liens................................................................................. 48
Section 4.14. Corporate Existence................................................................... 48
Section 4.15. Offer to Repurchase Upon Change of Control............................................ 49
Section 4.16. Payments for Consent.................................................................. 51
Section 4.17. Additional Subsidiary Guarantees...................................................... 51
Section 4.18. Sale and Leaseback Transactions....................................................... 51
Section 4.19. Maintenance of Insurance.............................................................. 52
Section 4.20. Perfection of Security Interests...................................................... 52
Section 4.21. Limitation on Issuance of Capital Stock of Restricted Subsidiaries.................... 52
Section 4.22. Consummation of Plan or Reorganization................................................ 52
ARTICLE 5. SUCCESSORS............................................................................................ 53
Section 5.01. Merger, Consolidation, or Sale of Assets.............................................. 53
Section 5.02. Successor Corporation Substituted..................................................... 53
ARTICLE 6. DEFAULTS AND REMEDIES................................................................................. 54
Section 6.01. Events of Default..................................................................... 54
Section 6.02. Acceleration.......................................................................... 56
Section 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee....................... 57
Section 6.04. Waiver of Past Defaults............................................................... 58
Section 6.05. Control by Super-Majority............................................................. 58
Section 6.06. Limitation on Suits................................................................... 58
Section 6.07. Rights of Holders of Notes to Receive Payment......................................... 59
Section 6.08. Trustee May Enforce Claims Without Possession of Notes................................ 59
Section 6.09. Trustee May File Proofs of Claim...................................................... 59
Section 6.10. Priorities............................................................................ 60
Section 6.11. Restoration of Rights and Remedies.................................................... 60
Section 6.12. Rights and Remedies Cumulative........................................................ 60
Section 6.13. Delay or Omission Not Waiver.......................................................... 60
Section 6.14. Undertaking for Costs................................................................. 61
ARTICLE 7. TRUSTEE .............................................................................................. 61
Section 7.01. Duties of Trustee..................................................................... 61
Section 7.02. Rights of Trustee..................................................................... 62
Section 7.03. Individual Rights of Trustee.......................................................... 63
Section 7.04. Trustee's Disclaimer.................................................................. 63
Section 7.05. Notice of Defaults.................................................................... 63
Section 7.06. Reports by Trustee to Holders of the Notes............................................ 63
Section 7.07. Compensation and Indemnity............................................................ 64
Section 7.08. Replacement of Trustee................................................................ 65
Section 7.09. Successor Trustee by Merger, Etc...................................................... 66
Section 7.10. Eligibility; Disqualification......................................................... 66
Section 7.11. Preferential Collection of Claims Against Company..................................... 66
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.............................................................. 66
Section 8.01. Option to effect Legal Defeasance or Covenant Defeasance.............................. 66
Section 8.02. Legal Defeasance and Discharge........................................................ 66
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Section 8.03. Covenant Defeasance................................................................... 67
Section 8.04. Conditions to Legal or Covenant Defeasance............................................ 67
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions............................................................................ 68
Section 8.06. Repayment to Company.................................................................. 69
Section 8.07. Reinstatement......................................................................... 69
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER...................................................................... 70
Section 9.01. Without Consent of Holders of Notes................................................... 70
Section 9.02. With Consent of Holders of Notes...................................................... 71
Section 9.03. Compliance with Trust Indenture Act................................................... 72
Section 9.04. Revocation and Effect of Consents..................................................... 72
Section 9.05. Notation on or Exchange of Notes...................................................... 73
Section 9.06. Trustee to Sign Amendments, Etc....................................................... 73
ARTICLE 10. SECURITY ARRANGEMENTS................................................................................ 73
Section 10.01. Collateral and Security Documents..................................................... 73
Section 10.02. Release of Collateral................................................................. 75
Section 10.03. Opinions as to Recording.............................................................. 75
Section 10.04. Further Assurances and Security....................................................... 76
Section 10.05. Authorization of Actions to be Taken by Collateral Agent Under the Security Documents. 76
Section 10.06. Authorization of Receipt of Funds by the Trustee Under the Security Documents......... 76
Section 10.07. Covenants of Collateral Agent with Respect to the Exit Facility and the Senior
Mortgage Loan......................................................................... 77
ARTICLE 11. SUBSIDIARY GUARANTEES................................................................................ 77
Section 11.01. Guarantee............................................................................. 77
Section 11.02. Subordination of Subsidiary Guarantee................................................. 79
Section 11.03. Limitation on Guarantor Liability..................................................... 79
Section 11.04. Successors and Assigns................................................................ 80
Section 11.05. No Waiver............................................................................. 80
Section 11.06. Execution and Delivery of Subsidiary Guarantee........................................ 80
Section 11.07. Guarantors May Consolidate, Etc., on Certain Terms.................................... 81
Section 11.08. Releases Following Sale of Assets or Capital Stock.................................... 81
ARTICLE 12. SUBORDINATION........................................................................................ 81
Section 12.01. Agreement to Subordinate.............................................................. 81
Section 12.02. Liquidation; Dissolution; Bankruptcy.................................................. 82
Section 12.03. Default on Senior Debt................................................................ 82
Section 12.04. Acceleration of Securities............................................................ 83
Section 12.05. When Distribution Must Be Paid Over................................................... 83
Section 12.06. Notice by the Company................................................................. 83
Section 12.07. Payment Permitted if no Default....................................................... 83
Section 12.08. Subrogation........................................................................... 84
Section 12.09. Relative Rights....................................................................... 84
Section 12.10. Subordination may not be Impaired by Company.......................................... 84
Section 12.11. Distribution or Notice to Representative.............................................. 84
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Section 12.12. Rights of Trustee and Paying Agent.................................................... 85
Section 12.13. Authorization to effect Subordination................................................. 85
Section 12.14. Amendments............................................................................ 85
ARTICLE 13. MISCELLANEOUS........................................................................................ 85
Section 13.01. Trust Indenture Act Controls.......................................................... 85
Section 13.02. Notices............................................................................... 86
Section 13.03. Communication by Holders of Notes with Other Holders of Notes......................... 87
Section 13.04. Certificate and Opinion as to Conditions Precedent.................................... 87
Section 13.05. Statements Required in Certificate or Opinion......................................... 88
Section 13.06. Rules by Trustee and Agents........................................................... 88
Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders.............. 88
Section 13.08. Governing Law......................................................................... 88
Section 13.09. No Adverse Interpretation of Other Agreements......................................... 89
Section 13.10. Successors............................................................................ 89
Section 13.11. Severability.......................................................................... 89
Section 13.12. Counterpart Originals................................................................. 89
Section 13.13. Table of Contents, Headings, Etc...................................................... 89
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF SUBSIDIARY GUARANTEE
Exhibit C FORM OF SUPPLEMENTAL INDENTURE
Exhibit D FORM OF INTERCREDITOR AGREEMENT
Exhibit E FORM OF SECURITY AGREEMENT
SCHEDULES
Schedule I EXISTING AFFILIATE TRANSACTIONS
Schedule II GUARANTORS
Schedule III MEZZANINE LOAN BORROWERS
Schedule IV PERMITTED JOINT VENTURES
Schedule V EXISTING LIENS
Schedule VI REVOLVING CREDIT FACILITY BORROWERS
Schedule VII SENIOR MORTGAGE LOAN BORROWERS
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INDENTURE dated as of August 19, 2003 among Fountain View, Inc., a
Delaware corporation (the "Company"), the Guarantors (as defined below) and U.S.
Bank National Association, a national banking association organized and existing
under the laws of the United States of America, as trustee (the "Trustee").
RECITALS OF THE COMPANY
A. The Company and certain of its subsidiaries filed for
reorganization under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Central
District of California, Los Angeles Division (the "Bankruptcy Court"); and
B. By order, dated July 10, 2003, the Bankruptcy Court has
confirmed the Company's plan of reorganization (the "Plan") in accordance with
Section 1129 of the Bankruptcy Code and such Plan has become effective as of
August 19, 2003; and
C. As part of the Plan, the Company has agreed, inter alia, to
issue $106,761,608 principal amount of Senior Subordinated Secured Increasing
Rate Notes (the "Notes") to holders of the Company's outstanding 11 1/4% Senior
Subordinated Notes due 2008 (the "Old Notes") in exchange for all of the
Company's outstanding Old Notes and obligations thereunder.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the issuance of the Notes
to the Holders (as defined herein), it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. 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.
"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under any
Subsidiary Guarantee, of such Guarantor at such date.
"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 Stock of a Person shall be
deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company or of
the Company and its Restricted Subsidiaries taken as a whole will be governed by
Section 4.15 or Section 5.01, as applicable, and not by Section 4.11 hereof and
(ii) the issue or sale by the Company or any of its Restricted Subsidiaries of
Equity Interests of any of the Company's Restricted 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 $1.0 million
or (b) for net proceeds in excess of $1.0 million. Notwithstanding the
foregoing, the following items shall not be deemed to be Asset Sales: (i) a
transfer of assets by the Company to a Restricted Subsidiary or by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary, (ii) an issuance
or sale of Equity Interests by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, (iii) a Restricted Investment that is permitted
by Section 4.08 hereof, (iv) transfers of Cash Equivalents and (v) an exchange
of facilities by the Company or a Restricted Subsidiary to the extent that such
facilities are exchanged for one or more nursing centers, long-term care
facilities, assisted living facilities, outpatient clinics or any other
facilities or businesses that are used or useful in the provision of healthcare
related services, in each case the aggregate fair market value of which is equal
to or greater than the fair market value of the facilities so exchanged, as
determined in good faith by the Board of Directors.
"Asset Sale Proceeds" means, for any Fiscal Year of the Company, the
aggregate amount of all net cash proceeds (i.e., cash or Cash Equivalent
proceeds net of all amounts paid or payable in connection with such sale or
other disposition of assets (including, without limitation, indebtedness paid
and federal and state income taxes paid or payable in connection therewith))
realized by the Company and its Subsidiaries during such Fiscal Year in
connection with any sale or other disposition of any asset (other than the sales
of inventory in the ordinary course of business and other than the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company or of the Company and its Restricted Subsidiaries taken as a whole
(which shall be governed by Section 4.15 or Section 5.01, as applicable));
provided that, for purposes of this definition, such net cash proceeds will not
be deemed to be realized until the earlier to occur of (a) 360 days after the
receipt by the Company and its Subsidiaries of such net
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cash proceeds and (b) that date the Company and its Subsidiaries apply such net
cash proceeds to prepay indebtedness, to make Capital Expenditures or to make
acquisitions.
"Attributable Debt" in respect of a sale and leaseback transaction or
an operating lease in respect of a healthcare facility means, at the time of
determination, the present value (discounted at the rate of interest implicit in
such transaction, determined in accordance with GAAP) of the obligation of the
lessee of the property subject to such sale and leaseback transaction or
operating lease in respect of a healthcare facility or net rental payments
during the remaining term of the lease included in such transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"B Note" means those certain subordinate Promissory Notes B, in the
initial aggregate principal amount of $10,000,000 (which is part of the Senior
Mortgage Loan), which is being executed pursuant to that certain Mortgage Loan
Agreement dated August 15, 2003 between Column Financial, Inc. (as originating
lender) and the borrowers under the Senior Mortgage Loan (it being understood
that immediately following closing, Column Financial, Inc.'s interest in the B
Note will be assigned to Capital Source, Fortress Credit Opportunities and
Highbridge/Zwirn), including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, as such
may be amended, modified, renewed, refunded, replaced (within two Business Days)
or refinanced, but not increased (except for protective advances thereunder),
from time to time, and all accrued and unpaid interest, costs and expenses
thereon.
"Bank Midwest Notes" means those certain promissory notes in a maximum
aggregate principal amount not to exceed $5,633,333 issued by the Woodlands
Entities to Bank Midwest, N.A. pursuant to the Plan, the repayment of which is
secured by the Bank Midwest Deed of Trust.
"Bank Midwest Deed of Trust" means that certain Deed of Trust dated
December 1, 1993 assigned to Bank Midwest, N.A. by instrument dated July 17,
2001 recorded in the real property records of Montgomery County, Texas and
constituting a first priority lien against the real property associated with the
long-term care facility known as the "Woodlands" located in such county and
owned and operated by Subsidiaries of the Company.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign law for the relief of debtors.
"Bergen Note" means the promissory note in a principal amount not to
exceed $1,237,880 to be issued by Summit Care Pharmacy to AmerisourceBergen Drug
Corporation (or its designee) pursuant to the Plan, the repayment of which is
secured by Liens contained in that certain security agreement dated March 29,
2001.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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"Business Day" means any day other than a Legal Holiday.
"Calculation Date" has the meaning assigned to it in the definition of
Fixed Charge Coverage Ratio.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, repairs, substitutions or additions thereto, that are required
to be capitalized under GAAP.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
GAAP. The Stated Maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Source" means CapitalSource Finance, LLC.
"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 or limited
liability company, partnership or membership 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.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and Eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thompson Bank Watch Rating of "B" or better, (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 Moody's
Investors Service, Inc. or Standard & Poor's Ratings Group and in each case
maturing within six months after the date of acquisition and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i) - (v) of this definition.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" or "group" (as such terms are used in
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Sections 13(d) and 14(d) of the Exchange Act) other than one or more Principals
and their Related Parties, (ii) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Principals and their Related Parties,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only upon
the occurrence of a subsequent condition), directly or indirectly, of more than
50% of the Voting Stock of the Company (measured by voting power rather than
number of shares), (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" or "group" (as defined above), other than one or more Principals and
their Related Parties, becomes the "beneficial owner" (as defined above),
directly or indirectly, of more than 35% of the Voting Stock of the Company
(measured by voting power rather than number of shares) and the Principals and
their Related Parties in the aggregate "beneficially own" (as defined above)
less than 35% of the Voting Stock of the Company (measured by voting power
rather than number of shares), provided that for the purpose of such
determination, the Principals and their Related Parties shall be deemed to own
at least 35% of the Voting Stock of the Company for so long as such Persons have
not sold or otherwise disposed of more than 5% of the shares of Voting Stock
held by them as of the Effective Date) or, in the event the Company has
consummated a Public Equity Offering, less than 20% of the Voting Stock of the
Company (measured by voting power rather than number of shares) provided that
for the purpose of such determination, the Principals and their Related Parties
shall be deemed to own at least 20% of the Voting Stock of the Company for so
long as such Persons have not sold or otherwise disposed of more than 5% of the
shares of Voting Stock held by them as of the Effective Date), or (iv) the first
day on which a majority of the members of the Board of Directors of the Company
are not Continuing Directors.
"Claims Agent" shall have the meaning set forth in the Collateral
Agency Agreement.
"Clearstream" means Clearstream Banking, societe anonyme.
"Collateral" means the collective reference to all assets, whether now
owned or hereafter acquired, upon which a Lien is created or granted from time
to time pursuant to any Security Document.
"Collateral Agency Agreement" means that certain Collateral Agency
Agreement by and among the Company, the Subsidiaries of the Company party
thereto, the Collateral Agent and the Claims Agent.
"Collateral Agent" means the Trustee, in its capacity as collateral
agent under the Security Documents, until a successor collateral agent shall
have become such pursuant to the Security Documents, and thereafter "Collateral
Agent" shall mean such successor collateral agent.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this
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instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means Fountain View, Inc., a Delaware corporation, until a
successor Person or Persons shall have become such pursuant to the applicable
provisions of this Indenture and thereafter "Company" shall mean such successor
Person.
"Company Order" means a written request or order signed in the name of
the Company by two Officers of the Company and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
Incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income, plus (v) non-recurring
financing, advisory and other expenses Incurred in connection with the
Transactions, minus (vi) non-cash items increasing such Consolidated Net Income
for such period (other than items accrued in the ordinary course of business),
minus (vii) gains from purchases of Indebtedness at a discount, 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, and the
depreciation and amortization and other non-cash expenses of, a Subsidiary of
the Company shall be added to Consolidated Net Income to compute Consolidated
Cash Flow only to the extent that a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction 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.
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"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted 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 Restricted
Subsidiary thereof that is a Guarantor, (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted 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
Restricted 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, (iv) the cumulative effect of a change in
accounting principles shall be excluded, (v) the Net Income of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries, (vi) any gain or loss realized on the
termination of any employee pension benefit plan shall be excluded, and (vii)
the Net Income of any Restricted Subsidiary shall be calculated after deducting
preferred stock dividends payable by such Restricted Subsidiary to Persons other
than the Company and its other Restricted Subsidiaries.
"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 Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less all investments as of such
date in unconsolidated Subsidiaries and in Persons that are not Subsidiaries
(except, in each case, Permitted Investments).
"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, (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 or (iii) was elected to such Board of Directors pursuant
to a designation made pursuant to the Stockholders Agreement.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee
may give notice to the Company.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
7
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A hereto except that such Note shall not bear the Global Note
Legend, shall not contain certain phrases specified in Exhibit A to be for
Global Notes only and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means any Senior Debt outstanding under the
Exit Facility or the B Note, together with any Indebtedness constituting Senior
Debt incurred to renew, refinance, refund or replace (within two Business Days)
(or successive renewals, refinancings or refundings), in whole or in part, the
Senior Debt outstanding under the Exit Facility.
"Disqualified Stock" means any Capital Stock 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 thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature; provided, however, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof.
"Effective Date" means the Effective Date as defined in the Plan.
"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).
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"Excess Cash Flow" means for any Fiscal Year of the Company, (a) the
sum, without duplication, of (i) the net income or loss of the Company and its
Subsidiaries for such fiscal year, calculated in accordance with GAAP,
excluding, however, all gains and losses (together with any related provision
for federal and state income taxes on such gains and losses) realized in
connection with any sale or other disposition by the Company or any of its
Subsidiaries of any asset (other than the sales of inventory in the ordinary
course of business); (ii) the aggregate amount of all interest expense of the
Company and its Subsidiaries during such Fiscal Year, calculated in accordance
with GAAP, whether paid or accrued; (iii) the aggregate amount of all federal
and state income taxes incurred by the Company and its Subsidiaries during such
Fiscal Year, calculated in accordance with GAAP, whether paid or accrued; (iv)
the aggregate amount of all depreciation expense and amortization expense of the
Company and its Subsidiaries during
8
such Fiscal Year, calculated in accordance with GAAP; (v) the aggregate amount
of all non-cash extraordinary losses (together with any related provision for
federal and state income taxes on such extraordinary losses) of the Company and
its Subsidiaries during such Fiscal Year, calculated in accordance with GAAP;
(vi) the Asset Sales Proceeds for such Fiscal Year; and (vii) an amount equal to
any decrease in Working Capital during such Fiscal Year; minus (b) the sum,
without duplication, of (i) the aggregate amount of all non-cash extraordinary
gains (together with any related provision for federal and state income taxes on
such extraordinary gains) of the Company and its Subsidiaries during such Fiscal
Year, calculated in accordance with GAAP; (ii) the Maintenance Capital
Expenditures for such Fiscal Year; (iii) the aggregate amount of all
non-financed acquisitions (other than the non-cash portion of any acquisitions)
by the Company and its Subsidiaries during the Fiscal Year; (iv) the aggregate
amount of all interest expense of the Company and its Subsidiaries paid or
payable during such Fiscal Year; (v) the aggregate amount of all federal and
state income taxes of the Company and its Subsidiaries paid or payable during
such Fiscal Year; (vi) an amount equal to any increase in the Working Capital
during such Fiscal Year; (vii) the aggregate amount of all scheduled payments
and mandatory prepayments of principal actually made or required to be made
during such Fiscal Year with respect to the Senior Mortgage Loan, the Bank
Midwest Amended and Restated Note, the Woodlands Place Note, the Union Bank
Note, the Mezzanine Loan, the Revolving Credit Facility, the Bergen Note, the
Class 10 Deferred Obligations and the Continuing Creditor Deferred Obligations
(as such terms are defined in the Plan); and (viii) the aggregate amount of all
voluntary prepayments of principal actually made with respect to the Mezzanine
Loan and the Revolving Credit Facility (solely to the extent that such
prepayment is accompanied by a reduction in the commitments) thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Affiliate Transactions" means any transaction between the
Company and any of its Affiliates contemplated by the Plan or in the agreements
listed on Schedule I.
"Existing Disqualified Stock" means the 15,000 shares of Series A
Preferred Stock, par value $0.01 per share, of the Company to be issued pursuant
to the Plan.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Exit Facility or the Senior
Mortgage Loan) in existence on the date of this Indenture, until such amounts
are repaid.
"Exit Facility" means the Revolving Credit Facility and the Mezzanine
Loan.
"Fiscal Year" means the calendar year.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of debt issuance costs (other than
any costs incurred in connection with the Transactions) and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
Incurred in respect of letter of credit or
9
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period, and (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such Guarantee
or Lien is called upon), (iv) accrued Disqualified Stock dividends of such
Person and all Restricted Subsidiaries of such Person, whether or not declared
or paid, and (v) the product of (a) all dividend payments, whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Restricted Subsidiary of the Company, 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.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the referent
Person or any of its Restricted Subsidiaries Incurs, Guarantees or redeems 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, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the referent Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter 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 four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
without giving effect to clause (iii) of the proviso set forth in the definition
of Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"Fortress Credit Opportunities" means Fortress Credit Opportunities I,
L.P., a Delaware limited partnership.
"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, which are in effect from time to time.
10
"Global Notes" means, individually and collectively, the Notes in the
form of Exhibit A hereto issued in accordance with Section 2.01 and Section
2.06.
"Global Note Legend" means the legend set forth in Section 2.06, which
is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Indebtedness of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including, without limitation,
any obligation of such Person, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (ii) to purchase property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "Guaranteed,"
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Guarantors" means (i) each of the Restricted Subsidiaries of the
Company listed on Schedule II hereto; and (ii) any other Restricted Subsidiary
that executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture, and their respective successors and assigns.
"Healthcare Related Business" means a business, at least a majority of
whose revenues result from pharmacy, healthcare, long-term care, physical
therapy or assisted living related businesses or facilities.
"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 and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency changes.
"Highbridge/Zwirn" means Highbridge/Zwirn Special Opportunities Fund,
L.P., a Delaware limited partnership.
"Holder" means a Person in whose name a Note is registered.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or otherwise become liable in respect of such Indebtedness or
other obligation including by acquisition of Restricted Subsidiaries or the
recording, as required pursuant to GAAP or otherwise, of any such Indebtedness
or other obligation on the balance sheet of such Person (and "Incurrence",
"Incurred", "Incurable" and "Incurring" shall have meanings correlative to the
forgoing);
11
provided, however, that a change in GAAP that results in an obligation of such
Person that exists at such time becoming Indebtedness shall not be deemed an
Incurrence of such Indebtedness.
"Indebtedness" means, with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not contingent,
(i) every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations Incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person (including reimbursement obligations with respect
thereto) (other than letters of credit securing obligations entered into in the
ordinary course of business to the extent such letters of credit are fully cash
collateralized using funds provided by the Exit Facility), (iv) every obligation
of such Person issued or assumed as the deferred purchase price of property or
services (including securities repurchase agreements), (v) every Capital Lease
Obligation of such Person, (vi) Hedging Obligations of such Person and (vii)
every obligation of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has Guaranteed or is responsible or liable for, directly or
indirectly, as obligor, Guarantor or otherwise. The "amount" or "principal
amount" of Indebtedness at any time of determination as used herein will be (a)
the maximum principal amount thereof in the case of any contingent Indebtedness,
(b) the accreted value thereof, in the case of any Indebtedness issued at a
price that is less than the principal amount at maturity thereof, and (c) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness. In no event shall
"Indebtedness" include any trade payable or accrued expenses arising in the
ordinary course of business which are not more than 180 days past due or which
are being contested in good faith and by appropriate proceedings.
"Indenture" means this Indenture, as amended or supplemented from time
to time by one or more indentures supplemental hereto entered into pursuant to
the applicable provisions hereof.
"Intercreditor Agent" means CapitalSource Finance LLC, or any person
whom it may designate, as provided in the Intercreditor Agreement.
"Intercreditor Agreement" means an Intercreditor Agreement between the
Company and Capital Source as agent for itself and other lenders pursuant to the
Revolving Credit Facility, Capital Source as agent for itself and the other
lenders under the Mezzanine Loan, and the Trustee as agent for Holders and for
the General Claim Holders (as defined therein), in substantially the form
attached hereto as Exhibit D.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other
12
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Subsidiary of the Company, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in Section 4.08 hereof.
"Junior Securities" means securities that are subordinated to the
Senior Debt at least to the same extent as the Notes and are unsecured.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or the city in which the principal
Corporate Trust Office of the Trustee is located are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
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).
"Maintenance Capital Expenditures" means, for any Fiscal Year, the
aggregate amount of all non-financed capital expenditures (other than capital
expenditures that are made in connection with an acquisition) incurred or made
by the Company and its Subsidiaries during such Fiscal Year; provided that, for
purposes of this definition, the maximum amount of such capital expenditures
deducted in any Fiscal Year (for any Fiscal Year, the "Maximum Amount") shall
not exceed (a) for Fiscal Year 2003, $7,000,000 and (b) for any Fiscal Year
thereafter, $7,000,000 plus the Maximum Amount for the immediately preceding
Fiscal Year minus the actual amount of Maintenance Capital Expenditures included
in this definition pursuant to clause (a) in such immediately preceding Fiscal
Year.
"Maturity", when used with respect to any Note, means the date on which
the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Mezzanine Loan" means a $23,000,000 aggregate principal amount term
loan facility provided by Highbridge/Zwirn, Fortress Credit Opportunities, and
Capital Source, pursuant to that certain Mezzanine Loan Agreement dated August
15, 2003 between Highbridge/Zwirn, Fortress Credit Opportunities, Capital Source
and the borrowers thereunder, listed on Schedule III, including any related
notes, Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such may be amended, modified, renewed, refunded,
13
replaced (within two Business Days) or refinanced, but not increased, from time
to time, and all accrued and unpaid interest costs and expenses thereunder.
"Mortgages" means the mortgages granted pursuant to the Security
Documents on certain of the real property owned or leased by the Company or the
Guarantors.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate proceeds in the form of cash or Cash
Equivalents received by the Company or any of its Restricted Subsidiaries (i)
with respect to any Asset Sale (including, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration received in any
Asset Sale), net of (a) the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, and sales
commissions), (b) any relocation expenses incurred as a result thereof, (c)
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing), (d) any amounts
required to be applied to the permanent repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and (e) any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP; provided, however, that any reduction in
such reserve within twelve months following the consummation of such Asset Sale
will be treated for all purposes of this Indenture and the Notes as a new Asset
Sale at the time of such reduction with Net Proceeds equal to the amount of such
reduction; and (ii) with respect to the issuance or sale of Capital Stock, or
options, warrants or rights to purchase Capital Stock, or debt securities or
Disqualified Stock that has been converted into or exchanged for Capital Stock,
the proceeds of such issuance or sale in the form of cash or Cash Equivalents,
including payments in respect of deferred payment obligations, net of attorney's
fees, accountant's fees and brokerage, consultation, underwriting and other fees
and expenses actually incurred in connection with such issuance or sale,
conversion or exchange and net of any consolidated interest expense attributable
to any debt securities paid to the holders thereof prior to the conversion or
exchange and net of taxes paid or payable as a result thereof.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or
14
payable prior to its stated maturity; and (iii) as to which lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries, except, in each case, for
any environmental indemnity and non-recourse carve-outs not broader than those
provided for in the Senior Mortgage Loan.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Sections 13.04 and 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
13.04 and 13.05 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depositary Trust Company,
shall include Euroclear and Clearstream).
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company that is a Guarantor; (b) any Investment in
Cash Equivalents; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company and a Guarantor or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company that is a Guarantor; (d) any
Investment by a Restricted Subsidiary that is not a Guarantor in any Restricted
Subsidiary; (e) any Investment in a borrower under the Mezzanine Loan for the
sole purpose of permitting such borrower to make payments on the Mezzanine Loan;
(f) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 4.11
hereof; (g) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company; (h) Hedging
Obligations; (i) any Investment in the joint venture entities identified on
Schedule IV hereto; (j) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (j) that are at the time
outstanding, not to exceed $2.5 million; (k) Guarantees issued in accordance
with Section 4.10 of this Indenture; (l) Investments in prepaid
15
expenses, negotiable instruments held for collection and lease, utility and
worker's compensation, performance and other similar deposits; and (m) accounts
receivable in the ordinary course of business (and Investments obtained in
exchange or settlement of accounts receivable for which the Company has
determined that collection is not likely or as a result of bankruptcy or
insolvency proceedings or upon the foreclosure, perfection or enforcement of any
Lien in favor of the Company or any Restricted Subsidiary, in each case as to
debt owing to the Company or any Restricted Subsidiary that arose in the
ordinary course of business of the Company or such Restricted Subsidiary).
"Permitted Liens" means (i) Liens on assets of the Company, any of its
Restricted Subsidiaries or any of the Guarantors securing the Exit Facility, the
Senior Mortgage Loan, the Woodlands Place Note or the Union Bank Note; (ii)
Liens in favor of the Company; (iii) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property or assets existing at the time of acquisition
thereof or the acquisition of a Person owning such property or assets by the
Company or any Restricted Subsidiary of the Company, provided that such Liens
were in existence prior to the contemplation of such acquisition and do not
extend to any assets other than the acquired property and accessions and
additions thereto and proceeds thereof; (v) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bond or other
obligations of a like nature Incurred in the ordinary course of business; (vi)
Liens to secure Capital Lease Obligations and mortgage financing or purchase
money obligations of the type (but without reference to any restrictions on
amount) described in clause (viii) of Section 4.10 that are permitted to be
Incurred pursuant to the terms of this Indenture covering only the assets
acquired with such Indebtedness and proceeds thereof, provided, however, that
(a) the principal amount of any Indebtedness secured by such a Lien does not
exceed 100% of such purchase price or cost, (b) such a Lien is created within
180 days of the construction, acquisition or improvement of such property and
does not extend to or cover any other property other than such item of property
and any improvements or accessions thereto and proceeds thereof and (c) the
Incurrence of such Indebtedness is otherwise permitted by this Indenture; (vii)
Liens existing on the date of this Indenture listed on Schedule V; (viii) 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; (ix) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
in respect thereof; (x) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not interfering in
any material respect with the ordinary conduct of the business of the Company or
any of its Restricted Subsidiaries; (xi) Liens on the assets of the Woodlands
Entities securing the Bank Midwest Amended and Restated Note; (xii) Liens on the
assets of Summit Care Pharmacy securing the Bergen Note; (xiii) Liens to secure
Indebtedness Incurred to extend, renew, refinance or refund (or successive
extensions, renewals, refinancings or refundings), in whole or in part,
Indebtedness secured by any Lien referred to in the foregoing clauses (i),
(iii), (iv), (vi), (vii),
16
(xi) and (xii) so long as such Lien does not extend to any other property and
the principal amount of Indebtedness so secured is not increased; (xiv) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed $5.0
million at any one time outstanding and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Restricted
Subsidiary; (xv) Liens on assets or Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries; and (xvi) Liens on accounts of
the Company's Subsidiary organized under the laws of the Cayman Islands
established for the purpose of obtaining insurance on behalf of the Company and
its Subsidiaries to secure insurance or payment obligations to any third party
insurer of the Company or any of its Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses Incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in
right of payment to the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is Incurred either by the Company or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Plan" has the meaning assigned to it in the preamble of this
Indenture.
"Principals" means Heritage Partners Management Company, Inc., Heritage
Fund II, L.P. and HF Partners II, L.P.
"Public Equity Offering" means a public offering of Common Stock of the
Company pursuant to a registration statement filed with the Commission in
accordance with the Securities Act.
17
"Regular Record Date" has the meaning set forth in Exhibit A attached
hereto.
"Related Party" with respect to any Principal means (A) any controlling
holder of Equity Interests, 80% (or more) owned Subsidiary, or spouse or
ex-spouse or immediate family member (in the case of an individual) of such
Principal or (B) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (A) or (C) any
investment fund, whether a limited partnership, limited liability corporation or
corporation, or other entity managed and controlled by Heritage Partners
Management Company, Inc. or HF Partners, L.P.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" means, with respect to any Person, each
Subsidiary of such Person that is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facilities in an
outstanding aggregate principal amount not to exceed $37,000,000 evidenced by
(i) the Revolving Credit and Security Agreement dated as of August 15, 2003, by
and among the Guarantors, the Company, the Woodlands Entities and CapitalSource
Finance LLC and (ii) the Revolving Credit and Security Agreement dated as of
August 15, 2003, by and among the borrowers thereunder, listed on Schedule VI,
and CapitalSource, including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, in each
case of (i) and (ii) as such may be amended, modified, renewed, refunded,
replaced (within two Business Days) or refinanced, but not increased, from time
to time, and all accrued and unpaid interest costs and expenses thereunder.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement by and among the
Company, the Guarantors and the Collateral Agent in substantially the form
attached hereto as Exhibit E.
"Security Documents" means the Security Agreement, the Mortgages and
any other document or agreement that secures the Notes or the Subsidiary
Guarantees.
"Senior Debt" means any Indebtedness outstanding under the Exit
Facility, the B Note and all Hedging Obligations with respect thereto; provided
that such Indebtedness was not incurred in violation of this Indenture. Senior
Debt shall not include any Indebtedness renewing,
18
refinancing, replacing or refunding the Indebtedness outstanding under the Exit
Facility and all Hedging Obligations with respect thereto to the extent, and
only to the extent, that the Stated Maturity of any installments of principal
and interest thereunder is after the Maturity of the Notes.
"Senior Mortgage Loan" means that certain loan issued under that
certain Loan Agreement between Column Financial, Inc., a Delaware corporation
and the borrowers thereunder, listed on Schedule VII hereto, in an outstanding
aggregate principal amount not to exceed $95,000,000, including any related
guarantees, collateral documents, instruments and agreements, as such may be
amended, modified, renewed, refunded, replaced (within two Business Days) or
refinanced, but not increased, from time to time, and all accrued and unpaid
interest costs and expenses thereunder.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act and the Exchange Act, as such
Regulation is in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Stockholders Agreement" means the Amended and Restated Stockholders
Agreement, dated as of August 15, 2003, among the Company and certain of its
stockholders, as in effect on the Effective Date, and as thereafter amended from
time to time; provided for purposes of the definition of "Continuing Director"
that no such amendment alters the provision relating to the designation and
election of members of the Board of Directors.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and the Notes, executed
pursuant to the provisions of this Indenture.
"Summit Care Corporation" means Summit Care Corporation, a Restricted
Subsidiary of the Company.
"Summit Care Pharmacy" means Summit Care Pharmacy, Inc., a Restricted
Subsidiary of the Company.
19
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.03; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "TIA"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Transactions" means the transactions contemplated by the Plan that are
consummated on or before the Effective Date.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Union Bank Note" means that certain Amended and Restated Commercial
Promissory Note dated April 1, 2001 issued by Summit Care Corporation to Union
Bank of California, N.A. with an outstanding principal balance of $823,333.04 on
the date of this Indenture and secured by certain real and personal property
located in Burbank, California, pursuant to that certain Extension and
Modification Agreement and Modification of Deed of Trust dated April 1, 2001, as
such obligations shall be further modified and extended pursuant to the
Extension and Modification Agreement.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary: (i) has no Indebtedness
other than Non-Recourse Debt; (ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (iii) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (A) to subscribe for additional Equity Interests or (B) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (iv) has not Guaranteed any
Indebtedness of the Company or any of its Restricted Subsidiaries; and (v) has
at least one director on its board of directors (or manager on its board of
managers or equivalent governing body) or the general partner of which has a
member on its board of directors (or manager on its board of managers or
equivalent governing body) that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors shall be
evidenced by a Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation compiled with the
foregoing conditions and was permitted by Section 4.08 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
Incurred as of such date under Section 4.10 hereof the Company shall be in
default of such covenant).
20
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) at such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"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" means, when used with respect to any Subsidiary or
Restricted Subsidiary of a Person, a Subsidiary (or Restricted Subsidiary, as
appropriate) 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 (or
Wholly Owned Restricted Subsidiaries, as appropriate) of such Person and one or
more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as
appropriate) of such Person.
"Woodlands Entities" means The Woodlands Resource Management, LP and
The Woodlands Healthcare Center, LP.
"Woodlands Place Note" is that certain promissory note in the original
principal amount of $1,887,866.62 and to be issued by the Woodlands Entities to
Woodlands Place Nursing Center, L.P. pursuant to the Plan, the repayment of
which is secured by a new deed of trust between Woodlands Place Nursing Center,
L.P., or its successor and the Woodlands Entities that is on the same terms as
the Bank Midwest Deed of Trust; provided however that such lien when properly
perfected, will be junior to the lien of the Bank Midwest Deed of Trust and
shall constitute a second priority lien against the property subject to the Bank
Midwest Deed of Trust.
"Working Capital" means, as of the end of any Fiscal Year of the
Company, (a) the sum, without duplication of (i) current assets (other than cash
and Cash Equivalents) and (ii) cash and Cash Equivalents held in restricted
accounts minus (b) the sum, without duplication, of (i) current liabilities
(other than the current portion of long-term debt) and (ii) long-term
liabilities related to accrued insurance, in each case as reflected on the
consolidated balance sheet for such Fiscal Year for the Company and its
Subsidiaries.
Section 1.02. Other Definitions.
Defined
Term in Section
- ---- ----------
"Affiliate Transaction".................................... 4.12
"Asset Sale Offer"......................................... 4.11
"DTC"...................................................... 2.03
21
Defined
Term in Section
- ---- ----------
"Change of Control Offer".................................. 4.15
"Change of Control Payment"................................ 4.15
"Change of Control Payment Date"........................... 4.15
"Change of Control Purchase Price"......................... 4.15
"Covenant Defeasance"...................................... 8.03
"Event of Default"......................................... 6.01
"Excess Cash Flow Payment"................................. 3.08
"Excess Cash Flow Payment Amount".......................... 3.08
"Excess Cash Flow Payment Date"............................ 3.08
"Excess Proceeds".......................................... 4.11
"Legal Defeasance"......................................... 8.02
"Nonpayment Default"....................................... 12.03
"Offer Amount"............................................. 4.11
"Offer Period"............................................. 3.09
"Paying Agent"............................................. 2.03
"Payment Blockage Notice".................................. 12.03
"Payment Default".......................................... 12.03
"Permitted Debt"........................................... 4.10
"Purchase Date"............................................ 3.09
"Registrar"................................................ 2.03
"Restricted Payments"...................................... 4.07
Section 1.03. Terms of TIA.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
22
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP (whether or not such is
indicated herein); and, except as otherwise herein expressly provided,
the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States as
consistently applied by the Company on the Effective Date;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) unless otherwise specifically set forth herein, all
calculations or determinations of a Person shall be performed or made
on a consolidated basis in accordance with GAAP but shall not include
the accounts of Unrestricted Subsidiaries, except to the extent of
dividends and distributions actually paid to the Company or a
Restricted Subsidiary;
(6) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision;
(7) unless the context otherwise requires, any reference
to a "Clause," and "Article" or a "Section", or to an "Exhibit" or a
"Schedule", refers to a Clause, an Article or Section of, or to an
Exhibit or a Schedule attached to, this Indenture, as the case may be;
(8) unless the context otherwise requires, any reference
to a statute, rule or regulation refers to the same (including any
successor statute, rule or regulation thereto) as it may be amended
from time to time;
(9) unless otherwise expressly provided herein, the
principal amount of any preferred stock shall be greater of (i) the
maximum liquidation value of such preferred stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
preferred stock; and
(10) provisions apply to successive events and
transactions.
23
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes, notation of the Subsidiary
Guarantees and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends, endorsements required by law, stock exchange rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be in
denominations of $1.00 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
Upon their original issuance, Notes shall be issued in the form of one
or more Global Notes registered in the name of DTC, as Depositary, or its
nominee and deposited with the Trustee, as Custodian for DTC, for credit by DTC
to the respective accounts of beneficial owners of the Notes represented thereby
(or such other accounts as they may direct).
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only by the Depositary to a nominee of
the Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary, or a nominee of such successor Depositary.
(c) Book-Entry Provisions. This Section 2.01(c) shall
apply only to Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(c), authenticate and deliver the Global Notes that (i) shall
be registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Custodian.
24
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the
Custodian as custodian for the Depositary or under such Global Note, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(d) Definitive Notes. Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon, without certain phrases specified in Exhibit A to be
for Global Notes only and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto) and shall be printed, typewritten, lithographed
or engraved or produced by any combination of these methods or may be produced
by any other method permitted by the rules of any securities exchange on which
the Notes may be listed, as evidenced by the execution of such Notes.
(e) Provisions Applicable to Forms of Notes. The Notes
may also have such additional provisions, omissions, variations or substitutions
as are not inconsistent with the provisions of this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with this Indenture,
any applicable law or with any rules made pursuant thereto or with the rules of
any securities exchange or governmental agency or as may be determined
consistently herewith by the Officers of the Company executing such Notes, as
conclusively evidenced by their execution of such Notes. All Notes will be
otherwise substantially identical except as provided herein.
Subject to the provisions of this Article 2, a Holder of a Global Note
may grant proxies and otherwise authorize any Person to take any action that a
Holder is entitled to take under this Indenture or the Notes.
Section 2.02. Execution and Authentication.
An Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a Company Order, authenticate Notes for
original issue up to the aggregate principal amount of $106,761,608. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may
25
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 Holders or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint 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 may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
The Company shall, prior to each Regular Record Date, notify the Paying
Agent of any wire transfer instructions for payments that it receives from
Holders.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may
26
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA Section 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. (i) Except as
provided in this Section 2.06 and the sections of the Indenture referenced
herein, notwithstanding any other provision in this Indenture, no Global Note
may be exchanged in whole or in part for Definitive Notes, and no transfer of a
Global Note in whole or in part may be registered, in the name of any Person
other than the Depositary for such Global Notes or a nominee thereof unless (i)
such Depositary or the Trustee has notified the Company that the Depository is
(A) unwilling or unable to continue as Depositary for such Global Notes or (B)
has ceased to be clearing agency registered as such under the Exchange Act, and
in either case the Company fails to appoint a successor Depositary within 120
days of such notice, (ii) the Company executes and delivers to the Trustee a
Company Order stating that it elects to cause the issuance of the Notes in
definitive form and that all Global Notes shall be exchanged in whole for
Definitive Notes (in which case such exchange shall be effected by the Trustee)
or (iii) there shall have occurred and be continuing an Event of Default with
respect to the Notes. Notwithstanding the foregoing provisions of this Section
2.06(a), Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. A Global Note may not be exchanged
for another Note other than as provided in this Section 2.06(a); however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(b) or (d) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures.
(i) If any Global Note is to be exchanged for
other Notes or cancelled in whole, it shall be surrendered by
or on behalf of the Depositary or its nominee to the Trustee,
as Registrar, for exchange or cancellation as provided in this
Article 2. If any Global Note is to be exchanged for other
Notes or cancelled in part, or if another Note is to be
exchanged in whole or in part for a beneficial interest in any
Global Note, then either (i) such Global Note shall be so
surrendered for exchange or cancellation as provided in this
Article 2 or (ii) the principal amount thereof shall be
reduced or increased by an amount equal to the portion thereof
to be so exchanged or cancelled, or equal to the principal
amount of such other Note to be so exchanged for a beneficial
interest therein, as the case may be, by means of an
appropriate endorsement made on the Global Notes by the
Trustee, as Custodian, whereupon the Trustee, in accordance
with the Applicable Procedures, shall instruct the Depositary
or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or
adjustment of a Global Note, the Trustee shall, as provided in
this Article 2, authenticate and deliver any Notes issuable in
exchange for such Global Note (or any portion thereof) to or
upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative.
Upon the request of the Trustee in connection with the
occurrence of any of the events specified in Section 2.06(a),
the Company shall promptly make available to the
27
Trustee a reasonable supply of Definitive Notes that are not
in the form of Global Notes. The Trustee shall be entitled to
rely upon any order, direction or request of the Depositary or
its authorized representative which is given or made pursuant
to this Article 2 if such order, direction or request is given
or made in accordance with the Applicable Procedures and in
accordance with all applicable laws. Every Note authenticated
and delivered upon registration of transfer of, or in exchange
for or in lieu of, a Global Note or any portion thereof,
whether pursuant to this Article 2 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a
Global Note, unless such Note is registered in the name of a
Person other than the Depositary for such Global Note or a
nominee thereof.
(ii) The Depositary or its nominee, as registered
owner of a Global Note, shall be the Holder of such Global
Note for all purposes under this Indenture and the Notes and
owners of beneficial interests in a Global Note shall hold
such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global
Note will be shown only on, and the transfer of such interest
shall be effected only through, records maintained by the
Depositary or its nominee or its Participants.
(c) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN
PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
(d) Cancellation and/or Adjustment of Global Notes. At
such time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Note shall
be returned to or retained and cancelled by the Trustee in
28
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the direction
to reflect such increase.
(e) General Provisions Relating to Transfers and
Exchanges.
Subject to the other provisions of this Indenture regarding
restrictions on transfer, upon surrender for registration of transfer of any
Note at any office or agency of the Company designated pursuant to Section 4.02
for such purpose, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferee or
transferees, one or more new Notes of any authorized denominations, of a like
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
(i) At the option of the Holder, and subject to
the other provisions of this Section 2.06, Notes may be
exchanged for other Notes of any authorized denominations, of
a like aggregate principal amount and bearing such restrictive
legends as may be required by this Indenture upon surrender of
the Notes to be exchanged at any such office or agency.
Whenever any Notes are so surrendered for exchange, the
Company shall execute, the Trustee shall authenticate and make
available for delivery, the Notes which the Holder making the
exchange is entitled to receive.
(ii) Every Note presented or surrendered for
registration of transfer or for exchange shall (if so required
by the Company or the Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed
by the Holder thereof or his attorney duly authorized in
writing.
(iii) No service charge shall be made to a holder
of a beneficial interest in a Global Note or to a Holder of a
Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.10, 3.06, 3.08, 3.09, 4.11, 4.15 and
9.05 hereof).
(iv) The Registrar shall not be required to
register the transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
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(v) All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes
or Definitive Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of
transfer or exchange.
(vi) The Registrar shall not be required (A) to
issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed
in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding Interest
Payment Date.
(vii) Prior to due presentment for the
registration of a transfer of any Note, the Trustee, any Agent
and the Company may deem and treat the Person in whose name
any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest
on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice
to the contrary.
(viii) The Trustee shall authenticate Global Notes
and Definitive Notes in accordance with the provisions of
Section 2.02 hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of a
Company Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 2.07, the Company
and the Trustee (without duplication) may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and reasonable attorneys' fees) connected therewith.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
30
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section 3.08
hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of any thereof) holds, on a redemption date or maturity
date, money sufficient to pay Notes payable on that date, then on and after that
date such Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Notwithstanding the foregoing, with respect to any Global Note, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
holders of beneficial interests in any Global Note the operation of customary
practices governing the exercise of the rights of the Depositary as Holder of
such Global Note.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of a Company Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably
31
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall, as soon as practicable upon its receipt of a Company
Order, authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
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 Notes or as contained in any notice and that reliance may be placed only
on the other identification numbers printed on the Notes and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the "CUSIP" numbers.
Section 2.14. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
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ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date (unless a
shorter notice shall be satisfactory to the Trustee), an Officers' Certificate
setting forth (i) the redemption date, (ii) the principal amount of Notes to be
redeemed and (iii) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1.00 or whole multiples of $1.00; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1.00, shall be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon cancellation of the original
Note;
(d) the name and address of the Paying Agent;
33
(e) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the CUSIP number or numbers, if any, of the Notes
called for redemption; and
(h) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
On or prior to 10:00 a.m. New York City time, on any redemption date,
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date. The Trustee or the Paying Agent shall promptly return
to the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related Interest Payment Date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01, hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the receipt of the Company's written request, the Trustee shall
as soon as practicable authenticate for
34
the Holder at the expense of the Company a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) The Company may at any time, in its sole and absolute
discretion, redeem up to 100% of the outstanding Notes at a redemption price
equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to but excluding the date of redemption.
(b) Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemptions
(a) To the extent permitted by the terms of the Exit
Facility, the Company shall be required to make mandatory redemptions of the
Notes on a pro rata basis on the date which is 150 days following the end of the
Company's Fiscal Year (the "Excess Cash Flow Payment Date") pursuant to which
the Company will redeem a principal amount of Notes equal to 80% of the Excess
Cash Flow for the Fiscal Year ended most recently prior to the Excess Cash Flow
Payment Date (the "Excess Cash Flow Payment Amount"), unless the amount of such
Excess Cash Flow is less than $2.0 million, in which case no redemption from
Excess Cash Flow shall be required. Any such mandatory redemption shall be made
at a redemption price equal to 100% of the principal amount thereof plus accrued
and unpaid interest thereon to the Excess Cash Flow Payment Date. On the earlier
of the ninetieth day following the end of the Company's Fiscal Year or the date
on which the Company delivers the audited financial statements to the Trustee
pursuant to Section 4.03(a) hereof, the Company shall deliver an Officers'
Certificate setting forth the calculation of Excess Cash Flow (whether positive
or negative) and the Excess Cash Flow Payment Amount, if any, to be made on the
Excess Cash Flow Payment Date. On or before the record date the Company shall
publicly announce the aggregate amount of such Excess Cash Flow Payment Amount
and the Excess Cash Flow Payment Date.
(b) The record date for any such redemptions from Excess
Cash Flow (the "Excess Cash Flow Payment") shall be the one hundred and
thirty-fifth day following the end of the Company's Fiscal Year. On or prior to
10:00 a.m. New York City time on any Excess Cash Flow Payment Date, the Company
shall deposit with the Trustee or with the Paying Agent the Excess Cash Flow
Payment Amount.
(c) The Excess Cash Flow Payment Amount shall be applied
on a pro rata basis to make a partial payment of principal on each Note and
accrued and unpaid interest on the portion of the principal being so repaid on
the Excess Cash Flow Payment Date, provided, however, that installments of
interest whose Stated Maturity is on or prior to the Excess Cash Flow Payment
Date shall first be payable to the Holders of such Notes, or one or more
predecessor Notes, registered as such at the close of business on the relevant
Regular Record Dates according to their terms.
35
(d) Other than as specifically provided in this Section
3.08 (including, but not limited to the requirement for pro rata payments set
forth in Section 3.08(c)), any redemption pursuant to this Section 3.08 shall be
made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.11 hereof, the Company shall
be required to commence an Asset Sale Offer, it shall follow the procedures
specified below. The Asset Sale Offer shall be made to all Holders and all
holders of the Indebtedness of the Company or the Subsidiaries that is pari
passu with the Notes or the Subsidiary Guarantee in question that contains
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales and assets.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.11 or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased shall be made in the same manner as interest payments are
made.
If the Purchase Date is on or after a Regular Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The notice shall contain (i) the
most recent annual and quarterly financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the documents required to be filed with the Trustee pursuant to
Section 4.03(a) of this Indenture (which requirements may be satisfied by
delivery of such documents together with the Asset Sale Offer), (ii) a
description of material developments as found in press releases and public
filings in the Company's business subsequent to the date of the latest of such
financial statements referred to in clause (i), (iii) a description of the
events requiring the Company to make the Asset Sale Offer and (iv) any other
information required by applicable law to be included therein. The notice, which
shall govern the terms of the Asset Sale Offer, shall also state:
(a) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.11 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment
shall continue to accrete or accrue interest;
36
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may only elect to have all of such Note
purchased and may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their
election if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1.00,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon receipt of a Company Order from the Company, shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
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ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of and interest
on the Notes on the dates and in the manner provided in the Notes. Principal and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, (i) holds as of 10:00 a.m. New York
City Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal and
interest then due and (ii) is not prohibited from paying such money to the
Holders pursuant to the terms of this Indenture and the Notes.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including interest that accrues after, or
would have accrued but for, the commencement of a proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03. Reports; Fiscal Year.
(a) Whether or not required by the rules and regulations
of the Commission, so long as any Notes are outstanding, the Company shall
furnish to the Trustee and the Holders of Notes (i) all quarterly and annual
financial information that would be required to be contained
38
in a filing with the Commission on Forms 10-Q and 10K 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 and (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports, in
each case within the time periods specified in the Commission's rules and
regulations. In addition, whether or not required by the rules and regulations
of the Commission, the Company shall file a copy of all such information and
reports with the Commission for public availability within the time periods
specified in the Commission's rules and regulations (unless the Commission will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request.
(b) Any materials required to be furnished to Holders of
Notes by this Section 4.03 shall discuss, in reasonable detail, either on the
face of the financial statements included therein or in the footnotes thereto
and in any Management's Discussion and Analysis of Financial Condition and
Results of Operations, the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of the Company.
(c) The Company shall not, and shall not permit any of
its Subsidiaries, to change the date of the end of its Fiscal Year from December
31.
(d) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within 5 Business Days of its effective
date, an Officers' Certificate specifying any change in the final scheduled
principal payment under the Exit Facility and publicly announce any resulting
change in the date of the final Maturity of the Notes.
Section 4.04. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that
such Guarantor is so required under the TIA) shall deliver to the Trustee,
within 90 days after the end of each Fiscal Year, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding Fiscal Year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered
39
pursuant to Section 4.03(a) shall be accompanied by a written statement of the
Company's independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article 4
or Article 5 hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon and in any event within 10
Business Days after any Officer's becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value (including; without limitation, in connection with
any merger or consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company; or (iii) make any
payment on or with respect to, or
40
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or a Subsidiary Guarantee, except
a payment of interest or principal at Stated Maturity (all such payments and
other actions set forth in clauses (i) through (iii) above being collectively
referred to as "Restricted Payments").
The foregoing provisions shall not prohibit (i) the redemption,
repurchase, retirement, defeasance or other acquisition of any Indebtedness that
is subordinated to the Notes or Equity Interests of the Company in exchange for,
or out of the net cash proceeds of the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of, other Equity Interests of the
Company (other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause (3)(b)
of the first paragraph of Section 4.08; (ii) the defeasance, redemption,
repurchase or other acquisition of Indebtedness that is subordinated to the
Notes with the net cash proceeds from an Incurrence of Permitted Refinancing
Indebtedness; (iii) the payment of any dividend (in cash or otherwise) by a
Restricted Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis; (iv) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Subsidiary of the Company held by any member of the Company's (or any of its
Subsidiaries') management pursuant to any management equity subscription
agreement, stock option agreement or employment agreement, provided that the
purchase price is paid with the proceeds to the Company of key man life or
disability insurance policies purchased by the Company specifically to finance
any such repurchase, redemption or other acquisition; (v) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any Restricted Subsidiary of the Company held by any member of
the Company's (or any of its Restricted Subsidiaries') management pursuant to
any management equity subscription agreement, stock option agreement, or
employment agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests of the Company or
any Restricted Subsidiary shall not exceed $500,000 in any twelve-month period
and no Default or Event of Default shall have occurred and be continuing
immediately after such transaction; or (vi) upon the occurrence of a Change of
Control or an Asset Sale and within 60 days after the completion of the offer to
repurchase the Notes pursuant to the covenants described under Section 3.09,
4.11 and 4.15, any purchase, repurchase, redemption, defeasance, acquisition or
other retirement for value of Indebtedness subordinated to the Notes or a
Subsidiary Guarantee required pursuant to the terms thereof as a result of such
Change of Control or Asset Sale at a purchase price not to exceed 101% of the
outstanding principal amount thereof, plus accrued and unpaid interest thereon,
if any; provided, however, that at the time of such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, no Default
or Event of Default shall have occurred and be continuing (or would result
therefrom).
Section 4.08. Limitation on Restricted Investments.
The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Restricted Investment if:
(1) an Event of Default, or an event that with the passing of time
or the giving of notice, or both, would constitute an Event of Default, shall
have occurred and is continuing, or
41
(2) upon giving effect to such Restricted Investment, the Company
could not, after giving pro forma effect thereto as if such Restricted
Investment had been made at the beginning of the applicable four (4) quarter
period, Incur at least $1.00 of additional Indebtedness pursuant to the terms of
the first paragraph of Section 4.10, or
(3) upon giving effect to such Restricted Investment, the
aggregate amount of all Restricted Investments from the Effective Date and
payments made pursuant to clauses (iii) or (v) of the second paragraph of
Section 4.07 exceeds the sum of:
(a) 50% of Consolidated Net Income for the period
(treated as one accounting period) commencing with the first full fiscal quarter
after the Effective Date and ending on the last day of the last full fiscal
quarter immediately preceding such Restricted Investment for which quarterly or
annual financial statements of the Company are available (or if such
Consolidated Net Income is a deficit, less 100% of such deficit); plus
(b) 100% of the aggregate Net Proceeds received after the
Effective Date as a contribution to the common equity capital of the Company or
from the issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of Disqualified Stock or debt
securities of the Company that have been converted into such Equity Interests
(other than Equity Interests or Disqualified Stock or convertible debt
securities) sold to a Restricted Subsidiary of the Company after the Effective
Date; plus
(c) an amount equal to the net reduction in Restricted
Investments resulting from dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted Subsidiary
(except to the extent any such payment is included in the calculation of
Consolidated Net Income), or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries, not to exceed the amount of Restricted Investments
previously made after the Effective Date by the Company and its Restricted
Subsidiaries in such Person.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated as an Unrestricted Subsidiary
will be deemed to be Restricted Investments at the time of such designation and
will reduce the amount available for Restricted Investments under clause (3)(c)
of this Section 4.08. All such outstanding Investments (except to the extent
repaid in cash) will be deemed to constitute Restricted Investments in an amount
equal to the greatest of (x) the net book value of such Investments at the time
of such designation, (y) the fair market value of such Investments at the time
of such designation and (z) the original fair market value of such Investments
at the time they were made. Such designation will only be permitted if such
Restricted Investments would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The
Board of Directors may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if such redesignation would not cause a Default; provided
that such designation shall be deemed to be an Incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1) such
Indebtedness is permitted under the covenant described under Section 4.10
calculated on a pro forma basis as if such designation had occurred
42
at the beginning of the four-quarter reference period; and (2) no Default or
Event of Default would be in existence following such designation.
The amount of all Restricted Investments (other than cash) shall be the
fair market value on the date of the Restricted Investments of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Investment. The fair
market value of any assets or securities that are required to be valued pursuant
to the foregoing sentence shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee, such
determination to be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing if such fair market
value exceeds $10.0 million. Not later than the date of making any Restricted
Investment, the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Investment is permitted and setting forth the basis
upon which the calculations required by this Section 4.08 were computed,
together with a copy of any opinion or appraisal required by this Indenture.
Section 4.09. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted 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
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries. However, the foregoing
restrictions will not apply to encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date of this Indenture
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof; provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in the agreements governing the Existing Indebtedness as in
effect on the date of this Indenture, (b) the Exit Facility or the Senior
Mortgage Loan as in effect as of the date of this Indenture, any amendments,
modifications, refundings, replacements, renewals or supplements thereof;
provided that such amendments, modifications, refundings, replacements, renewals
or supplements are not materially more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
the Exit Facility or the Senior Mortgage Loan, as the case may be, as in effect
on the date of this Indenture as determined in good faith by the Company's Board
of Directors, (c) the Indenture, the Security Documents and the Notes, (d)
applicable law, (e) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was Incurred in connection with or in contemplation of such acquisition), 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; provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be Incurred, (f)
customary non-assignment provisions in leases,
43
licenses and other contracts and other contracts entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) of this Section 4.09 above
on the property so acquired, (h) any agreement for the sale of a Subsidiary or a
substantial portion of such Subsidiary's assets that restricts distributions by
that Subsidiary pending its sale, (i) Permitted Refinancing Indebtedness;
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the Indebtedness being
refinanced as determined in good faith by the Company's Board of Directors, (j)
secured Indebtedness otherwise permitted to be Incurred pursuant to the
provisions of Section 4.10 that limits the right of the debtor to dispose of the
assets securing such Indebtedness, (k) provisions with respect to the
disposition or distribution of assets or property in joint venture agreements
and other similar agreements entered into in the ordinary course of business,
(l) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business, and (m) any
agreement or instrument governing Indebtedness permitted to be Incurred under
this Indenture; provided that the terms and conditions of any restrictions and
encumbrances, taken as a whole, are not more restrictive than those contained in
this Indenture.
Section 4.10. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, Incur or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to any Indebtedness (including Acquired
Debt) and that the Company shall not issue any Disqualified Stock and shall not
permit any of its Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may Incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock and the Company's Subsidiaries may Incur
Indebtedness or issue preferred stock if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is Incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.25 to 1, 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 Disqualified Stock or
preferred stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The provisions of the first paragraph of this Section 4.10 will not
apply to the Incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the Incurrence by the Company and the Guarantors of
Indebtedness and letters of credit (with letters of credit being deemed
to have a principal amount equal to the stated amount thereof) and
other obligations under the Revolving Credit Facility in an aggregate
principal amount that does not exceed at any one time $37,000,000 less
any aggregate repayments made on the Revolving Credit Facility for
which there is a concomitant permanent reduction in the commitment of
the lenders under the Revolving Credit Facility; provided, however,
that the Company and the Guarantors may Incur pursuant to this clause
(i) Indebtedness in an aggregate principal amount in excess of
$32,000,000 for the sole purpose of reimbursing the lenders and/or
agents under the Exit
44
Facility for any fees, costs, interest, charges, enforcement expenses
(including legal fees and disbursements) and other reimbursement
obligations attributable to protection of collateral;
(ii) the Incurrence by the Company and the Guarantors of the
Mezzanine Loan and the Senior Mortgage Loan;
(iii) Incurrence by the Woodlands Entities of Indebtedness
pursuant to the Bank Midwest Amended and Restated Note and the
Woodlands Place Note;
(iv) the Incurrence by Summit Care Pharmacy of Indebtedness
pursuant to the Bergen Note;
(v) the Incurrence by Summit Care Corporation of Indebtedness
pursuant to the Union Bank Note;
(vi) the Incurrence by the Company and the Guarantors of the
Existing Indebtedness and the issuance of the Existing Disqualified
Stock;
(vii) the Incurrence by the Company of Indebtedness
represented by the Notes in an aggregate principal amount not to exceed
$106,761,608;
(viii) the Incurrence by the Company or any of the Guarantors
of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case Incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of the Company or such Subsidiary, in an aggregate principal
amount, including all Permitted Refinancing Indebtedness Incurred to
refund, refinance or replace any other Indebtedness Incurred pursuant
to this clause (viii), that does not exceed at any one time the amount
of such Capital Lease Obligations, mortgage financings or purchase
money obligations outstanding as of the date of this Indenture, plus
$5.0 million;
(ix) the Incurrence by the Company or any of the Guarantors of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that is permitted by this Indenture to
be Incurred under the first paragraph hereof or clauses (iii) through
(viii) or this clause (ix) of this paragraph;
(x) the Incurrence by the Company or any of the Guarantors of
intercompany Indebtedness between or among the Company and any
Guarantor; provided, however, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes and (ii)(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Guarantor and (B) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Guarantor thereof shall be deemed, in each case, to
45
constitute an Incurrence of such Indebtedness by the Company or such
Guarantor, as the case may be, that was not permitted by this clause
(x);
(xi) the Incurrence by the Company or any of the Guarantors of
Hedging Obligations that are Incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(xii) the guarantee by the Company or any of its Subsidiaries
or any of the Guarantors of Indebtedness of the Company or another
Guarantor that was permitted to be Incurred by another provision of
this Section 4.10 other than clause (xv);
(xiii) the Incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt, provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an Incurrence of
Indebtedness by a Restricted Subsidiary of the Company that was not
permitted by this clause (xiii), and the issuance of preferred stock by
Unrestricted Subsidiaries;
(xiv) the Incurrence by the Company or any of the Guarantors
of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness Incurred to refund, refinance or
replace any Indebtedness Incurred pursuant to this clause (xiv), not to
exceed $5 million;
(xv) Indebtedness in an aggregate principal amount not to
exceed $6,000,000 incurred by a Subsidiary of the Company organized
under the laws of the Cayman Islands established for the purpose of
obtaining insurance on behalf of the Company and its Subsidiaries to
fund its obligations in connection therewith, whether incurred before
or after the Effective Date.
(xvi) Indebtedness in an aggregate principal amount not to
exceed $11,000,000 in connection with the purchase and Capital Lease of
five previously identified properties located in Eureka, California, to
be operated as skilled nursing facilities and an associated office
facility.
For purposes of determining compliance with this Section 4.10, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xvi) above or is
entitled to be Incurred pursuant to the first paragraph of this Section 4.10,
the Company shall, in its sole discretion, classify such item of Indebtedness,
or later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.10. Accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an Incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this Section
4.10; provided, in each such case, that
46
the amount thereof is included in Fixed Charges of the Company as accrued (to
the extent not already included in Fixed Charges).
Section 4.11. Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a Board
Resolution) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash; provided that the
amount of (x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or the Subsidiary Guarantees) that are assumed
by the transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further liability
and (y) in the case of any Asset Sale constituting the transfer (by merger or
otherwise) of all of the Capital Stock of a Restricted Subsidiary, any
liabilities (as shown on such Restricted Subsidiary's most recent balance sheet)
of such Restricted Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or the Subsidiary Guarantees)
that will remain outstanding after such transfer and will not be a liability of
the Company or any other Restricted Subsidiary of the Company following such
transfer and (z) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision. To the
extent that the assets which are the subject of any Asset Sale constitute
Collateral, all proceeds thereof shall, to the extent permitted by law, be
subject to a perfected Lien in favor of the Collateral Agent, and all Net
Proceeds from such an Asset Sale shall be deposited in the escrow account
established by the Security Documents.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to repay
Senior Debt, or (b) to the acquisition of a majority of the assets of, or a
majority of the Voting Stock of a Healthcare Related Business, the making of a
capital expenditure or the acquisition of other long-term assets for use in a
Healthcare Related Business. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture. 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 $5.0
million, the Company will be required to make a pro rata offer to all Holders of
Notes and any holders of other Indebtedness that is pari passu with the Notes or
the Subsidiary Guarantee in question and that requires such an offer and
contains provisions similar to those set forth in this Indenture with respect to
offers (an "Asset Sale Offer"), to purchase or redeem with the proceeds of sales
of assets in accordance with Section 3.09, the maximum principal amount of Notes
and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of purchase, in
accordance with the procedures set
47
forth in this Indenture. To the extent that any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes tendered into such Asset Sale Offer surrendered by
Holders thereof exceeds the amount of Excess Proceeds allocated for the Notes
(the "Offer Amount"), the Trustee shall select the Notes to be purchased on a
pro rata basis. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
Section 4.12. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or 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 or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
Board Resolution 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 any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing. Notwithstanding the foregoing, the following items shall not be deemed
to be Affiliate Transactions: (i) any employment agreement entered into by the
Company or any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, (ii)
transactions between or among the Company and/or its Restricted Subsidiaries,
(iii) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company, (iv) any sale or other issuance of Equity Interests
(other than Disqualified Stock) of the Company, (v) Restricted Investments that
are otherwise permitted by Section 4.08 hereof, (vi) reimbursements of actual
out-of-pocket expenses and, to the extent consistent with prior practice,
allocated expenses and (vii) Existing Affiliate Transactions.
Section 4.13. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, Incur, assume or suffer to
exist any Lien of any kind on any asset now owned or hereafter acquired,
securing Indebtedness or trade payables, except Permitted Liens.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective
48
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each
Holder of Notes will have the right to require the Company to repurchase all or
any part (equal to $1.00 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 100% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon (the "Change of Control Purchase Price"), to
the date of purchase (the "Change of Control Payment Date"). If the Change of
Control Payment Date is on or after a Regular Record Date and on or before the
related Interest Payment Date, any accrued and unpaid interest shall be paid to
the Person in whose name a Note is registered at the close of business on such
Regular Record Date, and no additional interest shall be payable to Holders who
validly tender Notes pursuant to the Change of Control Offer in respect of such
Interest Payment Date.
(b) Within 15 Business Days following any Change of
Control, the Company shall mail a notice to each Holder, with a copy of such
notice to the Trustee. The notice, which shall govern the terms of the Change of
Control Offer, shall state, among other things:
(i) that a Change of Control has occurred and a
Change of Control Offer is being made as provided for herein
that each Holder has the right to require the Company to
purchase such Holder's Notes at the Change of Control Purchase
Price, and that, although Holders are not required to tender
their Notes, all Notes that are validly tendered shall be
accepted for payment;
(ii) the circumstances giving rise to the Change of
Control;
(iii) the Change of Control Purchase Price and the
Change of Control Payment Date, which will be no earlier than
30 days and no later than 60 days after the date such notice
is mailed;
(iv) that any Note accepted for payment pursuant to
the Change of Control Offer (and duly paid for on the Change
of Control Payment Date) shall cease to accrue interest, after
the Change of Control Payment Date;
(v) that any Notes (or portions thereof) not validly
tendered shall continue to accrue interest;
(vi) that any Holder electing to have a Note
purchased pursuant to any Change of Control Offer shall be
required to surrender the Note, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Note
49
completed, or transfer by book entry transfer, to the Company,
a depositary, if appointed by the Company, or a Paying Agent
at the address specified in the notice at least three Business
Days before the Change of Control Payment Date;
(vii) that Holders shall be entitled to withdraw
their election if the Company, the depositary or the Paying
Agent, as the case may be, receives, not later than the close
of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have
such Note purchased;
(viii) the instructions and any other information
necessary to enable Holders to tender their Notes (or portions
thereof) and have such Notes (or portions thereof) purchased
pursuant to the Change of Control Offer; and
(ix) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes; provided that
such new Note must be equal to $1.00 principal amount and
integral multiples thereof.
(c) On the Change of Control Payment Date, the Company
shall, to the extent lawful, (1) accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered and (3) deliver or cause to
be delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being repurchased by the Company. The Paying Agent shall promptly (but in any
case not later than five days after the Change of Control Payment Date) mail to
each Holder of Notes so tendered the Change of Control Payment for such Notes,
and the Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unrepurchased portion of the Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1.00 or an integral multiple
thereof.
(d) Upon surrender and cancellation of a Definitive Note
that is purchased in part pursuant to the Change of Control Offer, the Company
shall promptly issue and the Trustee shall authenticate and mail (or cause to be
transferred by book entry) to the surrendering Holder of such Definitive Note, a
new Definitive Note equal in principal amount to the unpurchased portion of such
surrendered Definitive Note; provided that each such new Definitive Note shall
be in a principal amount of $1.00 or an integral multiple thereof. Upon
surrender of a Global Note that is purchased in part pursuant to a Change of
Control Offer, the Paying Agent shall forward such Global Note to the Trustee
who shall make a notation on Schedule A thereof to reduce the principal amount
of such Global Note to an amount equal to the unpurchased portion of such Global
Note, as provided in Section 2.06 hereof. The Company shall publicly announce
the results of the Change of Control Offer on the Change of Control Payment
Date. For purposes of this Section 4.15, the Trustee shall act as the Paying
Agent.
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(e) Notwithstanding anything to the contrary in this
Section 4.15, the Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 hereof and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
(f) The Company shall comply with the requirements of
Rules 13e-4 and 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 Notes as a result of a Change of Control.
To the extent that the provisions of any securities laws or regulations conflict
with this Section 4.15, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.15 by virtue thereof.
Section 4.16. Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.17. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries shall acquire or
create another Subsidiary (other than a Subsidiary that is also a Subsidiary of
a Restricted Subsidiary that is not a Guarantor) after the date of this
Indenture, then such newly acquired or created Subsidiary shall become a
Guarantor and execute a Supplemental Indenture and deliver an opinion of
Counsel, in accordance with the terms of this Indenture; provided that all
Subsidiaries that have properly been designated as Unrestricted Subsidiaries in
accordance with this Indenture (i) shall not be subject to the requirements of
this Section 4.17 and (ii) shall be released from all Obligations under any
Subsidiary Guarantee, in each case for so long as they continue to constitute
Unrestricted Subsidiaries.
Section 4.18. Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company may enter into a sale and leaseback transaction if (i) the Company
could have Incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.10 hereof,
(ii) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Board of
Directors and set forth in an Officers' Certificate delivered to the Trustee) of
the property that is the subject of such sale and leaseback transaction and
(iii) the transfer of assets in such sale and leaseback transaction is permitted
by, and the Company applies the proceeds of such transaction in compliance with,
Section 4.11 hereof.
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Section 4.19. Maintenance of Insurance.
The Company shall, and the Company shall cause its Restricted
Subsidiaries to, keep at all times all of its properties which are of an
insurable nature insured (which may include self-insurance) against loss or
damage of the kinds that, in the good faith judgment of the Board of Directors,
is adequate for the conduct of the Company and its Restricted Subsidiaries, with
insurers believed by the Company to be responsible in such amounts, with such
deductibles and by such methods as shall be customary, in the good faith
judgment of the Board of Directors for companies similarly situated. To the
extent that the Company and its Restricted Subsidiaries are required to maintain
insurance by the Exit Facility, the Company will have satisfied its obligations
under this Section 4.19 if it complies with the insurance covenants contained in
the Exit Facility.
Section 4.20. Perfection of Security Interests.
The Company shall preserve the Liens granted under the Security
Documents and, subject to the provisions of the Security Documents, shall
undertake all actions which are required by applicable law in the reasonable
judgment of the Trustee or the Collateral Agent to (a) maintain the Liens of the
Collateral Agent in the Collateral in full force and effect at all times
(including the priority thereof), and (b) preserve and protect the Collateral
and protect and enforce the Company's rights and title and the rights of the
Collateral Agent to the Collateral, including, without limitation, the making or
delivery of all filings and recordations, the payment of fees and other charges
and the issuance of supplemental documentation for such purposes.
Section 4.21. Limitation on Issuance of Capital Stock of Restricted
Subsidiaries.
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants, or other rights
to purchase shares of such Capital Stock) except: (i) to the Company or a Wholly
Owned Restricted Subsidiary of the Company; (ii) issuances of director's
qualifying shares or sales to foreign nationals of shares of Capital Stock of
foreign Restricted Subsidiaries, to the extent required by applicable law; or
(iii) issuances or sales of Common Stock of a Restricted Subsidiary so long as
immediately giving effect to the issuance or sale, the Restricted Subsidiary
would no longer constitute a Restricted Subsidiary, provided that (x) the
proceeds therefrom shall be treated as proceeds from an Asset Sale in accordance
with Section 4.11 and (y) any Investment in any Person remaining after giving
effect to the issuance or sale would have been permitted to be made under
Section 4.08 if made on the date of the issuance or sale.
Section 4.22. Consummation of Plan or Reorganization.
No provision of this Indenture shall prevent the Company and its
Restricted Subsidiaries from consummating the Plan and the transactions
contemplated thereby.
52
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another corporation, Person or entity 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, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia; (ii) except in the
case of a merger or consolidation of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, 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 assumes all the obligations of the Company
under the Notes, this Indenture and the Security Documents pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction no Default or Event of Default exists; and
(iv) except in the case of a merger or consolidation of the Company with or into
a Wholly Owned Restricted Subsidiary of the Company, 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, conveyance or other
disposition shall have been made (A) shall 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) shall,
immediately after such transaction after giving pro forma effect thereto and any
related financial transaction as if the same had occurred at the beginning of
the applicable four-quarter period, be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.10 hereof.
The Company shall not lease its properties and assets substantially as an entity
to any Person.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
53
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults for 30 days in the payment when
due of interest on the Notes (whether or not prohibited by the subordination
provisions of this Indenture);
(b) the Company defaults in the payment when due of
principal of the Notes (whether or not prohibited by the subordination
provisions of this Indenture);
(c) failure by the Company or any of its Subsidiaries to
comply with any of the provisions of Section 4.07, 4.11, 4.15 or Article 5;
(d) failure by the Company or any of its Subsidiaries for
30 days after notice to comply with any of the provisions of Section 4.08, 4.10
or 4.20;
(e) the Company or any of its Subsidiaries fails to
comply with any other covenant, representation, warranty or other agreement in
this Indenture, the Notes or the Security Documents for 60 days and such failure
continues for 60 days after written notice to the Company by the Trustee or to
the Company and the Trustee by Holders of at least 25% in aggregate principal
amount of outstanding Notes;
(f) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by 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 Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists or is created after the date of this
Indenture, which default (i) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness after any applicable grace
period provided by the documents governing such Indebtedness, which default has
not been waived or (ii) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
which has not been so paid or the maturity of which has been so accelerated,
aggregates $5.0 million or more (other than Existing Indebtedness, the Exit
Facility or the Senior Mortgage Loan to the extent it is secured by or paid by
the drawing against a letter of credit permitted to be issued under this
Indenture);
(g) the receipt by the Collateral Agent of a written
notice under the Collateral Agency Agreement from the Claims Agent to realize
and foreclose upon the Collateral;
(h) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction against the
Company or any of its Restricted Subsidiaries and such judgment or judgments
remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days; provided that the aggregate of all such
undischarged judgments exceeds $5.0 million;
54
(i) the Company or any of its Significant Subsidiaries
that is a Restricted Subsidiary or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors,
(v) generally is not paying its debts as they become
due; or
(j) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries that is a Restricted Subsidiary or
any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary
case;
(ii) appoints a custodian of the Company or any of
its Significant Subsidiaries that is a Restricted Subsidiary
or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries that is a Restricted Subsidiary or
any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of
its Significant Subsidiaries that is a Restricted Subsidiary
or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
(k) the Liens created by the Security Documents shall at
any time not constitute valid and perfected Liens on the Collateral intended to
be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Collateral Agent, free and clear of all other Liens (other than Permitted
Liens), or, except for expiration in accordance with its terms or amendment,
modification, waiver, termination or release in accordance with the terms of
this Indenture, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, if in either case, such
default continues for 15 days after (i) written notice to the Company by the
Trustee or to the Company and the Trustee by Holders of at least 25% in
aggregate principal amount of outstanding Notes, or (ii) the enforceability
thereof shall be contested by the Company or any Subsidiary Guarantor;
55
(l) failure of the Company to make, when due, any
transfer, delivery, pledge, assignment or grant of Collateral required to be
made by it and such failure continues unremedied for 10 Business Days after
notice of such failure 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 outstanding Notes; or
(m) except as permitted by this Indenture, any Subsidiary
Guarantee is held in any judicial proceeding to be unenforceable or invalid in
any material respect or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (i) or (j) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (i) or
(j) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable without further action or notice. Holders of the Notes may not
enforce this Indenture or the Notes except as provided in this Indenture. In the
event of a declaration of acceleration because an Event or Default set forth in
clause (f) of Section 6.01 has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (f) of Section 6.01
shall be remedied or cured or waived by the holders of the relevant Indebtedness
within 30 days after such event of default; provided that no judgment or decree
for the payment of the money due on Notes has been obtained by the Trustee as
provided in this Indenture.
At any time after such a declaration of acceleration has been 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, the Holders of at least 60%
in aggregate principal amount of the outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay:
(A) the principal of any Notes which have become
due otherwise than by such declaration of acceleration
(including any Notes required to have been purchased on a
Change of Control Payment Date or a Purchase Date pursuant to
a Change of Control Offer or an Asset Sale Offer, as
applicable, made by the Company) and, to the extent that
payment of such interest is lawful, any interest thereon at
the rate provided therefore in the Notes;
56
(B) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate provided
therefore in Section 4.01, and all sums paid or advanced by
the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel and any other amount due under Section
7.07; and
(2) all Events of Default, other than the non-payment of
the principal of or interest on, the Notes which have become due solely
by such declaration of acceleration, have been cured or waived as
provided in Section 6.04.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if there is:
(1) a default in the payment of any interest on any Note when such
interest becomes due and payable and such default continues
for a period of 30 days, or
(2) a default in the payment of the principal of any Note at the
Maturity thereof or, with respect to any Note required to have
been purchased pursuant to a Change of Control Offer or an
Asset Sale Offer made by the Company, at the Change of Control
Payment Date or Purchase Date thereof, as applicable,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Notes, the whole amount then due and payable on such Notes for
principal and interest, and, to the extent that payment of such interest shall
be legally enforceable, interest on any overdue principal and on any overdue
interest, at the rate provided therefore in Section 4.01 hereof, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any
amounts due the Trustee under Section 7.07 hereof.
If the Company fails to pay such amounts within 10 Business Days
following such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so due
and unpaid, may prosecute any such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property and assets of the Company or any other obligor upon the
Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may,
subject to Article 12, pursue any available remedy to collect the payment of
principal and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
57
Section 6.04. Waiver of Past Defaults.
Subject to Section 6.07 hereof, Holders of not less than 60% in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of the principal of and interest on
the Notes (including any waiver obtained in connection with a purchase of,
tender offer or exchange offer for Notes) (provided, however, that the Holders
of at least 60% in aggregate principal amount of then outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Super-Majority.
Holders of at least 60% in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may result in the incurrence of liability by the Trustee.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
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Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture and subject to
Section 11.02 and Article 12, the right of any Holder of a Note to receive
payment of principal and interest on the Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to purchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder, except that no Holder shall have the right to institute any such suit,
if and to the extent that the institution or prosecution thereof or the entry of
judgment therein would under applicable law result in the surrender, impairment,
waiver, or loss of the Liens of the Security Documents upon any property or
assets subject to the Liens.
Section 6.08. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes 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, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any amounts due the Trustee under
Section 7.07 hereof, be for the ratable benefit of the Holders of the Notes in
respect of which such judgment has been recovered.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall,
subject to Article 12, pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively; and
Third: to the Company or the Subsidiary Guarantors or to such party as
a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture, the Subsidiary Guarantees or the
Security Documents 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 such 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 thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 6.12. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section
2.07, 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 6.13. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 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.
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Section 6.14. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the
Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture but need not verify the
contents thereof.
(c) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05 hereof.
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(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
this Section 7.01 and Section 7.02.
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under this
Indenture or the Security Documents at the request of any Holders, unless such
Holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
Section 7.02. Rights of Trustee.
(a) In connection with the Trustee's rights and duties
under this Indenture, the Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting, upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting under
this Indenture, it may require an Officers' Certificate or an Opinion of Counsel
or both. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel. The Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture or the Security
Documents at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(g) Except with respect to Section 4.01 hereof, the
Trustee shall have no duty to inquire as to the performance of the Company's
covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any
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Event of Default occurring pursuant to Sections 6.01(a), 6.01(b), 6.01(c) and
4.01 or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
(h) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee may, in its discretion, make such further inquiry or
investigation into such facts or matters as it may see fit and if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company personally or
by agent or attorney.
Section 7.03. Individual Rights of Trustee.
The Trustee may become the owner or pledgee of Notes and may otherwise
deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest (as defined in the TIA) it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after such Default or Event of
Default becomes known to the Trustee. Except in the case of a Default or Event
of Default relating to the payment of principal of or interest on any Note, the
Trustee may withhold the notice if it determines that withholding the notice is
in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
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A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange, if any, on which the Notes are listed in accordance with TIA
Section 313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company and the Guarantors shall jointly and severally indemnify
the Trustee and each of its officers, directors, employees and agents for, and
hold the same harmless against, any and all losses, liabilities or expenses
(including, without limitation, reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. At the Trustee's sole discretion, the Company shall
defend the claim with counsel reasonably satisfactory to the Trustee and the
Trustee shall cooperate in the defense at the Company's expense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section
7.07 shall survive the resignation of the Trustee and/or the satisfaction and
discharge or termination of this Indenture.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the resignation of the
Trustee and/or the satisfaction and discharge or termination of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(i) or (j) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
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Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has (or in the case of a corporation included in a bank
holding company, the bank holding company and related entities has) a combined
capital and surplus of at least $100 million as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its Obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes, this Indenture and the Security Documents (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until
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otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of and
interest on such Notes when such payments are due, solely from the trust fund
described in Section 8.04 hereof, (b) the Company's Obligations with respect to
such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, (i) the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from their respective obligations under the covenants contained in
Sections 4.03, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.17, 4.18,
4.19, 4.20 and 4.21 hereof with respect to the outstanding Notes and clauses
(ii) and (iii) of Section 5.01 and (ii) the occurrence of an event specified in
Section 6.01(c) (with respect to Sections 4.07, 4.11 and 4.15 and clauses (ii)
and (iii) of Section 5.01), 6.01(d) (with respect to Sections 4.08, 4.10 and
4.20), 6.01(e) (with respect to Sections 4.03, 4.05, 4.09, 4.10, 4.12, 4.13,
4.17, 4.18, 4.19, 4.20 and 4.21 and clauses (ii) and (iii) of Section 5.01),
6.01(f), 6.01(g), 6.01(h), 6.01(k), 6.01(l) and 6.01(m) shall not be deemed to
be an Event of Default on and after the date the conditions set forth in Section
8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in United
States dollars, noncallable Government Securities, 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 and interest on
the outstanding Notes on the Stated Maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
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(b) in the case of an election under Section 8.02 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders
of the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the Holders
of the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit) or
insofar as Sections 6.01(i) or 6.01(j) hereof is concerned, at any time in the
period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is bound including, without limitation, the
Exit Facility;
(f) the Company shall 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;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over any other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance
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with the provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Notes of all sums
due and to become due thereon in respect of principal and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for two years after such principal or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Note shall thereafter, as a secured creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, 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 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's Obligations under this Indenture, the Notes and
the Security Documents shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
or a Guarantor makes any payment of principal of or interest on any Note
following the reinstatement of its obligations, the
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Company or such Guarantor shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes,
the Security Documents or the Intercreditor Agreement without the consent of any
Holder of a Note:
(1) to evidence the succession of another Person to the
Company or a Guarantor and the assumption by any such
successor of the covenants of the Company herein and
in the Notes, the Security Documents and the
Intercreditor Agreement and of such Guarantor
contained herein and in the Security Documents; or
(2) 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; or
(3) to comply with any requirements of the Commission in
order to effect or maintain the qualification of this
Indenture under the TIA; or
(4) to cure any ambiguity, to correct or supplement any
provision herein or in the Security Documents which
may be inconsistent with any other provision herein,
or to make any other provisions with respect to
matters or questions arising under this Indenture or
the Security Documents which shall not be
inconsistent with the provisions of this Indenture;
provided that such action pursuant to this clause (4)
shall not adversely affect the interests of the
Holders in any material respect;
(5) to evidence and provide for the acceptance and
appointment hereunder of a successor Trustee with
respect to the Notes;
(6) to mortgage, pledge, hypothecate or grant a Lien in
favor of the Collateral Agent for the benefit of
Trustee and the Holders of the Notes as additional
security for the payment of principal of and interest
on the Notes by the Company or on the Subsidiary
Guarantees by the Guarantors under this Indenture in
any property or assets, including any which are
required to be mortgaged, pledged or hypothecated, or
in which a Lien is required to be granted to the
Collateral Agent, pursuant to this Indenture or the
Security Documents;
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(7) to add Guarantees with respect to the Notes, to
secure the Notes or to release Guarantors from
Subsidiary Guaranties as provided by the terms of
this Indenture; or
(8) to add additional Events of Default.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02 and in Section 12.14, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture,
the Notes, any Subsidiary Guarantees, the Security Documents and the
Intercreditor Agreement with the consent of the Holders of at least 60% in
aggregate principal amount of the Notes then outstanding voting as a single
class (including, without limitation, consents obtained in connection with a
purchase of, tender offer or exchange offer for, Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of at least 60% in
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, tender offer or exchange offer for,
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the
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amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such amended or supplemental Indenture or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of 60% in aggregate principal amount
of the Notes then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) change the Stated Maturity of the principal of, or
any installment of interest on, any Note, or reduce
the principal amount thereof or the rate of interest
thereon, or change the place of payment where, or the
coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date or, in
the case of a Change of Control Offer or an Asset
Sale Offer which has been made, on or after the
applicable Change of Control Payment Date or Purchase
Date), or
(2) reduce the percentage in principal amount of the
outstanding Notes, the consent of whose Holders is
required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver
(of compliance with certain provisions of this
Indenture or certain defaults hereunder and its
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section 9.02,
Section 6.04 or Section 6.07, except to increase any
such percentage or to provide that certain other
provisions of this Indenture cannot be modified or
waived without the consent of the Holders of each
outstanding Note affected thereby, or
(4) modify the provisions of this Indenture requiring the
Company to make a Change of Control Offer after the
occurrence of a Change of Control,
(5) make any change in the ranking of the Notes or the
Subsidiary Guarantees that would adversely affect the
Holders of the Notes, or
(6) make any change in any Subsidiary Guarantee that
would adversely affect the Holders of the Notes.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note
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or portion of a Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. However, any such
Holder of a Note or subsequent Holder of a Note may revoke the consent as to its
Note if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every
Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of a
Company Order, authenticate new Notes that reflect the amendment, supplement or
waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until
the Board of Directors approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 13.04 hereof, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SECURITY ARRANGEMENTS
Section 10.01. Collateral and Security Documents.
(a) To secure the due and punctual payment of principal
of and interest on the Notes by the Company when and as the same shall be due
and payable (whether on an Interest Payment Date, at Stated Maturity, by
acceleration, call for redemption, upon a Change of Control Offer or an Asset
Sale Offer, or otherwise) and interest on the overdue principal of, and interest
(to the extent permitted by law) on, the Notes and performance of all other
Obligations of the Company and the Guarantors to the Holders of the Notes, the
Trustee or the Collateral Agent under this Indenture, the Notes, the Subsidiary
Guarantees, and the Security Documents, according to the terms hereunder or
thereunder, each of the Company and the Subsidiary Guarantors will enter into
the Security Documents, to create the security interests with respect to the
Collateral (except to the extent that granting such Liens is precluded by the
provisions or the documents evidencing the Senior Debt). The Trustee, the
Collateral Agent, the Guarantors and the Company hereby acknowledge and agree
that the Collateral Agent holds the Collateral in
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trust for the benefit of the Holders and the Trustee, among others, pursuant to
the terms of the Security Documents.
(b) Each Holder, by accepting a Note, agrees to all of
the terms and provisions of the Security Documents (including, without
limitation, the provisions providing for foreclosure and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance
with the terms thereof and hereof, and authorizes and directs the Trustee, in
its capacity as Collateral Agent, to perform its obligations and exercise its
rights under the Security Documents in accordance therewith; provided, however,
that if any provisions of the Security Documents limit, qualify or conflict with
the duties imposed by the provisions of the TIA, the TIA will control.
(c) As more fully set forth in, and subject to the
provisions of, the Security Documents, the Holders, and the Trustee and the
Collateral Agent on behalf of such Holders, will have rights in and to the
Collateral that are subject to the rights that have been or may be created in
favor of the holders of other Indebtedness and obligations of the Company.
(d) As among the Holders, the Collateral shall be held
for the equal and ratable benefit of the Holders without preference, priority or
distinction of any thereof over any other.
(e) With respect to the Trustee acting as Collateral
Agent, the Trustee (i) shall not be deemed to have breached its fiduciary duty
as Trustee to the Holders as a result of the performance of its duties as
Collateral Agent to the extent it acts in compliance with the Security Documents
and (ii) shall not be liable to the Holders for any such action or inaction. The
rights and interests created under this Indenture shall be subject to the terms
of the Security Documents.
(f) The Company and each Guarantor will do or cause to be
done all such acts and things as may be required by the provisions of the
Security Documents to which it is a party, to assure and confirm to the Trustee,
in its capacity as Collateral Agent, the Liens on the Collateral contemplated by
the Security Documents to which it is a party, as from time to time constituted,
so as to render the same available for the security and benefit of this
Indenture and of the Notes and each Subsidiary Guarantee secured thereby, as
applicable, according to the intent and purposes herein and therein expressed.
The Company will take all actions required pursuant to the Security Documents to
cause the Liens created pursuant to the Security Documents to be valid,
enforceable and perfected (except as expressly provided therein) Liens in and on
all the Collateral in favor of the Collateral Agent for the benefit of the
Trustee and for the equal and ratable benefit of the Holders of the Notes. Each
Guarantor will take any and all actions required pursuant to the Security
Documents to cause the Liens created pursuant to the Security Documents to which
it is a party to create and maintain for its Obligations under each Subsidiary
Guarantee and the Security Document related thereto, valid and enforceable,
perfected (except as expressly provided therein), Liens in favor of the
Collateral Agent for the benefit of the Trustee and for the equal and ratable
benefit of the Holders of the Notes.
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Section 10.02. Release of Collateral.
Collateral may be released from the Liens created by the Security
Documents at any time or from time to time, and the Security Documents may be
terminated, in accordance with the provisions of the Security Documents or in
accordance with this Indenture. In addition, upon the request of the Company
pursuant to an Officer's Certificate and receipt of an Opinion of Counsel
certifying that any sale, conveyance or disposal of any Collateral has been
effected in compliance with the provisions of this Indenture, the Trustee will
release such Collateral. Upon receipt of such Officer's Certificate and Opinion
of Counsel, the Trustee will execute, deliver and acknowledge any necessary or
proper instruments of termination or release to evidence the release of any
Collateral permitted to be released pursuant to this Indenture or the Collateral
Documents. The release of any Collateral from the terms hereof and of the
Security Documents or the release of, in whole or in part, the Liens created by
the Security Documents, or the termination of the Security Documents, will not
be deemed to impair the Liens on the Collateral in contravention of the
provisions hereof if and to the extent that the Liens on Collateral are
released, or the Security Documents are terminated, pursuant to this Indenture
or the applicable Security Documents. The Trustee and each of the Holders
acknowledge that a release of Collateral or a Lien in accordance with the terms
of the Security Documents will not be deemed for any purpose to be an impairment
of the Lien on the Collateral in contravention of the terms of this Indenture.
To the extent applicable, the Company and each obligor on the Notes shall cause
Section 314(d) of the TIA relating to the release of property or securities from
the Lien hereof and of the Security Documents to be complied with. Any
certificate or opinion required by Section 314(d) of the TIA may be made by an
officer of the Company, except in cases which Section 314(d) of the TIA requires
that such certificate or opinion be made by an independent person. In releasing
any Collateral pursuant to the terms of the Indenture, including the provisions
of Section 10.02, or any Security Document, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, in addition to the
documents required by Section 13.04, an Officers' Certificate certifying that
such release is authorized or permitted by this Indenture and the Security
Documents and the Intercreditor Agreement and that all conditions precedent, if
any, to such release have been satisfied.
Section 10.03. Opinions as to Recording.
(a) Each of the Company and the Guarantors represent that
is has caused or will promptly cause to be executed and delivered, filed and
recorded and covenants that it will promptly cause to be executed and delivered
and filed and recorded, all instruments and documents, and represents that it
has done and will do or will cause to be done all such acts and other things, at
the Company's or the Guarantors' expense, as applicable, as are necessary to
subject the applicable Collateral to valid Liens and to perfect those Liens to
the extent contemplated by the Security Documents.
(b) The Company and the Guarantors shall furnish to the
Trustee and the Collateral Agent promptly after the execution and delivery of
this Indenture an Opinion of Counsel either (i) stating that in the opinion of
such counsel all action has been taken with respect to the recording,
registering and filing of this Indenture, financing statements or other
instruments or otherwise necessary to make effective the Liens intended to be
created by the Security Documents and reciting the details of such action, or
(ii) stating that, in the opinion of
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such counsel, no such action is necessary to make such Lien effective. Such
Opinion of Counsel may contain such qualifications, assumptions and limitations
as are customary for such opinions.
(c) The Company and the Subsidiary Guarantors shall
furnish to the Trustee and the Collateral Agent within three months after each
anniversary of the Effective Date, an Opinion of Counsel, dated as of such date,
stating either that (i) in the opinion of such counsel, all action has been
taken with respect to the recording, filing, re-recording, and refiling of the
Indenture and related financing statements, continuation statements and other
instruments and documents as is necessary to maintain the effectiveness of the
Liens intended to be created by the Security Documents and reciting the details
of such action or (ii) in the opinion of such counsel, no such action is
necessary to maintain the effectiveness of such Liens. Such Opinion of Counsel
may contain such qualifications, assumptions and limitations as are customary
for such opinions.
(d) The Company and the Subsidiary Guarantors shall
otherwise comply with the provisions of Section 314(b) and, as applicable
Sections 314(c), (d) and (e) of the TIA.
Section 10.04. Further Assurances and Security.
The Company and the Guarantors will execute, acknowledge and deliver to
the Trustee, at the Company's and/or such Guarantor's expense, at any time and
from time to time such further assignments, transfers, assurances or other
instruments as may be reasonably required by the Trustee, to assure and confirm
to the Trustee, in its capacity as Collateral Agent, the Liens in the Collateral
contemplated hereby and by the Security Documents, all to the extent
contemplated by the Security Documents.
Section 10.05. Authorization of Actions to be Taken by Collateral Agent Under
the Security Documents.
The Trustee, in its capacity as Collateral Agent, may, in its sole
discretion and without the consent of the Holders, on behalf of the Holders,
take all actions it deems necessary or appropriate in order to (a) enforce any
of the terms of the Security Documents and (b) collect and receive any and all
amounts payable in respect of the obligations of the Company and the Guarantors
hereunder. The Trustee, in its capacity as Collateral Agent, shall have the
power to institute and to maintain such suits and proceedings as such Person may
deem expedient to prevent any impairment of the Collateral by any acts that may
be unlawful or in violation of the Security Documents or this Indenture, and
such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other government enactment,
rule or order that may be unconstitutional or otherwise invalid if the
enforcement of, or compliance with, such enactment, rule or order would impair
the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee).
Section 10.06. Authorization of Receipt of Funds by the Trustee Under the
Security Documents.
The Trustee, in its capacity as Collateral Agent, is authorized to
receive any funds for the benefit of the Holders distributed under the Security
Documents, and to make further
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distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
Section 10.07. Covenants of Collateral Agent with Respect to the Exit Facility
and the Senior Mortgage Loan.
The Trustee, in its capacity as Collateral Agent, and any successor
Collateral Agent, hereby agrees that it shall, upon the written request of the
Company, either:
(1) enter into the Intercreditor Agreement with
regard to the Exit Facility to effectuate the priority of the
Liens granted under the Exit Facility over the Liens of the
Collateral Agent with respect to the Collateral to the extent
contemplated herein; or
(2) release its Lien with respect to Collateral
to the extent required under the Intercreditor Agreement.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. Guarantee.
Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes,
the Security Documents or the Obligations of the Company hereunder or
thereunder, that: (a) the principal of and interest on the Notes (including,
without limitation, any interest that accrued after, or would accrue but for,
the commencement of a proceeding of the type described in Section 6.01(i) or
(j)) and any fees, expenses and other amounts owing under this Indenture will be
duly and punctually paid in full when due, whether at Stated Maturity, by
acceleration, mandatory redemption, call for redemption, upon a Change of
Control Offer, an Asset Sale Offer or otherwise, and interest on the overdue
principal and (to the extent permitted by law) interest, if any, on the Notes
and any other amounts due in respect of the Notes and the Security Documents,
and all other Obligations of the Company, including the Company's Obligations to
the Holders of the Notes under this Indenture, the Notes and the Security
Documents and Subsidiary Guarantors under this Indenture, the Security Documents
and the Subsidiary Guarantees, whether nor or hereafter existing, will be
promptly paid in full or performed, all strictly in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately whether or not such failure to pay has
become an Event of Default which could cause acceleration pursuant to Section
6.02. An Event of Default under this Indenture or the Notes shall constitute an
Event of Default under each Subsidiary Guarantee, and shall entitle the Holders
to accelerate the Obligations of each Subsidiary Guarantor hereunder in the same
manner and to the same extent
77
as the Obligations of the Company. Each Subsidiary Guarantee is intended to be
superior to or pari passu in right of payment with all Indebtedness of the
respective Guarantor and each Guarantor's Obligations are independent of any
Obligation of the Company or any other Guarantor. Each Guarantor further agrees
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Guarantor, and that each Guarantor will
remain bound under this Article 11 notwithstanding any extension or renewal of
any Obligation.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes, this Indenture or the Security Documents, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which 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, protest, notice and
all demands whatsoever and covenant that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture. Each Guarantor waives notice of any default under the
Notes or the Obligations. The obligations of each Guarantor hereunder shall not
be affected by (a) the failure of any Holder, Trustee or the Collateral Agent to
assert any claim or demand or to enforce any right or remedy against the Company
or any other Person under this Indenture, the Notes, or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Notes, the Security Documents or any other agreement; (d) the
release of any security held by any Holder, the Collateral Agent or the Trustee
for the Obligations or any of them; (e) the failure of any Holder, the Trustee
or the Collateral Agent to exercise any right or remedy against any other
guarantor of the Obligations; or (f) any change in the ownership of such
Guarantor.
Each Guarantor further agrees that its Subsidiary Guaranty herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation, contribution, exoneration, indemnification or reimbursement in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. If any amount shall be
paid to such Guarantor in violation of the preceding sentence at any time prior
to the later of the payment in full of the Notes and all other amounts payable
under this Indenture and under each Subsidiary Guarantee upon the Stated
Maturity of the Notes, such
78
amount shall be held in trust for the benefit of the Holders and the Trustee and
shall forthwith be paid to the Trustee to be credited and applied to the Notes
and all other amounts payable under each Subsidiary Guarantee, whether matured
or unmatured, in accordance with the terms of this Indenture, or to be held as
security for any Obligations or other amounts payable under any Subsidiary
Guarantee thereafter arising.
Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.01 is knowingly made in contemplation of
such benefits. Each Guarantor further agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (x) subject to this
Article 11, the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of each Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such Obligations guaranteed hereby as provided in
Article 6, such Obligations (whether or not due and payable) shall, forthwith
become due and payable by the Guarantor for the purposes of each Subsidiary
Guarantee.
A Guarantor that makes a distribution or payment under its Subsidiary
Guarantee shall be entitled to contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each such other Guarantor for
all payments, damages and expenses incurred by that Guarantor in discharging the
Company's obligations with respect to the Notes and this Indenture or any other
Guarantor with respect to its Subsidiary Guarantee, so long as the exercise of
such right does not impair the rights of the Holders of the Notes under the
Subsidiary Guarantees.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 11.01.
Section 11.02. Subordination of Subsidiary Guarantee
The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 shall be junior and subordinated to the Senior Debt
of such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Debt of the Company. For the purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Notes pursuant to this Indenture, including Article
12 hereof.
Section 11.03. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such
79
Guarantor under its Subsidiary Guarantee and this Article 11 shall be limited to
the maximum amount as will, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 11, result
in the obligations of such Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance. Each Guarantor that makes a
payment or distribution under its Subsidiary Guarantee shall be entitled to a
contribution from each other Guarantor in a pro rata amount based on the
Adjusted Net Assets of each such other Guarantor.
Section 11.04. Successors and Assigns.
This Article 11 shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Notes shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
Section 11.05. No Waiver.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article 11 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article 11 at law, in equity, by
statute or otherwise.
Section 11.06. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit B shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
Chairman, President or one of its Vice Presidents. Further, the Company shall
cause all future Guarantors to execute a Supplemental Indenture substantially in
the form of Exhibit C.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
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In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.17 hereof the
Company shall cause such Subsidiaries to execute supplemental indentures to this
Indenture and Subsidiary Guarantees in accordance with Section 4.17 hereof and
this Article 11, to the extent applicable.
Section 11.07. Guarantors May Consolidate, Etc., on Certain Terms.
No Guarantor may consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another corporation, Person or other
entity whether or not affiliated with such Guarantor 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 under the Notes and the Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists; and (iii) except in the case of a merger of a Guarantor with or
into another Guarantor or a merger of a Guarantor with or into the Company, the
Company would be permitted by virtue of the Company's pro forma Fixed Charge
Coverage Ratio, immediately after giving effect to such transaction, to Incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.10 hereof.
Section 11.08. Releases Following Sale of Assets or Capital Stock.
In the event of a sale or other disposition of all of the assets of any
Guarantor (other than to the Company, another Guarantor or a Restricted
Subsidiary), by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor (other than to, the
Company, another Guarantor or a Restricted Subsidiary), then such Guarantor (in
the event of a sale or other disposition, by way of such a merger, consolidation
or otherwise, of all of the Capital Stock of such Guarantor) or the entity
acquiring the property (in the event of a sale or other disposition of all of
the assets of such Guarantor) will be released and relieved of any obligations
under its Subsidiary Guarantee and any such acquiring entity will not be
required to assume any obligations of such Guarantor under the applicable
Subsidiary Guarantee; provided that such sale or other disposition complies with
all applicable provisions of this Indenture including, without limitation,
Section 4.10 and this Article 11.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 11.
ARTICLE 12.
SUBORDINATION
Section 12.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 12, to the prior payment
in full of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt.
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Section 12.02. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company or any Guarantor in a
liquidation or dissolution of the Company or any Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company, any Guarantor, or their property, an assignment for the benefit of
creditors or any marshaling of the Company's or any Guarantor's assets and
liabilities, the holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including interest
after the commencement of any such proceeding at the rate specified in the
applicable Senior Debt whether or not allowed as a claim in any such proceeding)
before the Holders of Notes will be entitled to receive any payment with respect
to the Notes or under the Subsidiary Guarantee, and until all obligations with
respect to Senior Debt are paid in full, any distribution to which the Holders
of Notes would be entitled shall be made to the holders of Senior Debt (except
that Holders of Notes may receive payments made from the trust created pursuant
to Article 8 hereof and payments or distributions in the form of Junior
Securities).
In connection with the enforcement of the foregoing rights,
Intercreditor Agent is hereby irrevocably appointed attorney in fact for the
Trustee with full power to act in the place and stead of each Holder to exercise
the rights of such Holders and the Trustee provided in Section 6.09 in the event
the Trustee has failed to exercise such rights with 10 Business Days after
receipt of written notice from the Intercreditor Agent.
The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the company following
the sale, assignment, conveyance, transfer, lease or other disposition of all or
substantially all of its properties and assets to another Person or group of
Affiliated Persons pursuant to, and in compliance with, the terms and conditions
set forth in Article 5 hereof will not be deemed an insolvency or liquidation
proceeding (requiring the repayment of all Senior Debt in full as a prerequisite
to any payments being made to the Holders) for the purposes of this Section
12.02.
Section 12.03. Default on Senior Debt.
The Company and the Guarantors also may not make any payment upon or in
respect of the Notes or the Subsidiary Guarantees (except from the trust created
pursuant to Article 8 hereof) if (i) a default in the payment of the principal
of, premium, if any, or interest on Senior Debt occurs and is continuing beyond
any applicable period of grace (a "Payment Default") or (ii) any other default
occurs and is continuing with respect to Designated Senior Debt that currently,
or with the passage of time or giving of notice, permits holders of the
Designated Senior Debt as to which such default relates to accelerate its
maturity (a "Nonpayment Default") and, in the case of any such Nonpayment
Default, the Trustee receives a notice of such Nonpayment Default (a "Payment
Blockage Notice") from the Company or the holders of such Designated Senior
Debt. Payments on the Notes may and shall be resumed (a) in the case of a
Payment Default, upon the date on which such Payment Default is cured or waived
in writing by the holders of the applicable Senior Debt, or (b) in case of a
Nonpayment Default, the earlier of (x) the date on which such Nonpayment Default
is cured or waived in writing by the holders of Designated Senior Debt or (y)
179 days after the date on which the applicable Payment Blockage Notice is
received by the Trustee, unless the maturity of any Designated Senior Debt has
been
82
accelerated. However, the Company may pay the Notes if the Company and the
Trustee receive written notice approving such payment from the Representative of
the Senior Debt with respect to which any of the events set forth in clause (i)
of the immediately preceding sentence has occurred and is continuing. No new
period of payment blockage may be commenced under clause (ii) above unless and
until (x) 360 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (y) all scheduled payments of principal of and
interest on the Notes that have come due have been paid in full in cash. No
Nonpayment Default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been waived in
writing or cured for a period of not less than 180 days.
Section 12.04. Acceleration of Securities.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Debt of the acceleration.
Section 12.05. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when such payment is prohibited
by Section 12.03 hereof, such payment shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered to the Company or as directed in writing by the Representative of the
Senior Debt. In the event that the Company makes any payment in respect of the
Notes to the Trustee and the Trustee receives written notice of a Payment
Default or a Nonpayment Default in the manner provided by Section 12.12 hereof
prior to making any payment to Holders in respect of the Notes, such payments
will be paid over by the Trustee and delivered forthwith to the Company.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 12, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. 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 if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 12, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 12.06. Notice by the Company.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 12, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 12.
Section 12.07. Payment Permitted if no Default.
Nothing contained in this Article 12 or elsewhere in this Indenture or
in any of the Notes will prevent the Company or any Guarantor, at any time
except during the pendency of any
83
insolvency or liquidation proceeding referred to in Section 12.02 hereof or
under the conditions described in Section 12.03 hereof, from making payments at
any time of principal of or interest on the Notes.
Section 12.08. Subrogation.
After all Senior Debt is paid in full and commitments to lend have
irrevocably terminated and until the Notes are paid in full, Holders of Notes
shall be subrogated (equally and ratably with all other Indebtedness pari passu
with the Notes) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders of Notes have been applied to the payment of Senior Debt. A
distribution made under this Article 12 to holders of Senior Debt that otherwise
would have been made to Holders of Notes is not, as between the Company and
Holders, a payment by the Company on the Notes.
Section 12.09. Relative Rights.
This Article 12 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders
of Notes, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes
in accordance with their terms;
(2) affect the relative rights of Holders of
Notes and creditors of the Company other than their rights in
relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of Notes
from exercising its available remedies upon a Default or Event
of Default, subject to the rights of holders and owners of
Senior Debt to receive distributions and payments otherwise
payable to Holders of Notes.
If the Company fails because of this Article 12 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
Section 12.10. Subordination may not be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
Section 12.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 12, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative(s) or of the
84
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes 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, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12.
Section 12.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least two Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 12. Only the Company or a
Representative may give the notice. Nothing in this Article 12 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Subject to Section 7.03 hereof and the applicable provisions of the
TIA, the Trustee may hold Senior Debt with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights.
Section 12.13. Authorization to effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 12 and the subordination of the Subsidiary Guarantees as provided in
Section 11.02, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 12.14. Amendments.
The provisions of this Article 12, Section 11.02 or the definitions
used therein shall not be amended or modified without the written consent of the
holders of all Senior Debt.
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
85
Section 13.02. Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt requested),
telex, facsimile or overnight courier guaranteeing next day delivery, to the
other's address.
If to the Company and/or any Guarantor:
Fountain View, Inc.
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610
Facsimile No.: (949) 282-5820
Attention: General Counsel
With a copy to:
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
Facsimile No. (714) 755-8290
Attention: Patrick T. Seaver
If to the Trustee:
U.S. Bank National Association
1 Federal Street
Boston, Massachusetts 02110
Facsimile No.: (617) 603-6640
Attention: Corporate Trust Department
with a copy to:
Brown Rudnick Berlack Israels LLP
CityPlace I, 185 Asylum Street
Hartford, Connecticut 06103
Facsimile No.: (860) 509-6501
Attention: David Golden, Esq.
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; 5 Business Days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight courier guaranteeing next day delivery.
86
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication shall also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 13.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such eligible and qualified Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any certificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Company stating the information on which
counsel is relying unless such counsel knows, or
87
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he
or she has 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 satisfied; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
Section 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or such Guarantor under the Notes, the
Subsidiary Guarantees, this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes.
Section 13.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES, WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF
88
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
Section 13.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the remaining provisions shall not in any way
be affected or impaired thereby.
Section 13.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 13.13. Table of Contents, Headings, Etc.
The Table of Contents and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
[SIGNATURES ON FOLLOWING PAGES]
89
SIGNATURES
FOUNTAIN VIEW, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: \s\ Paula Oswald
------------------------------------
Name: Paula Oswald
Title: Vice President
ALEXANDRIA CARE CENTER, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
ALTA CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
ANAHEIM TERRACE CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
BAY CREST CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
S-1
BRIER OAK ON SUNSET, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
CARSON SENIOR ASSISTED LIVING, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
ELMCREST CARE CENTER, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
FOUNTAIN VIEW SUBACUTE AND NURSING
CENTER, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
HALLMARK INVESTMENT GROUP, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
HALLMARK REHABILITATION GP, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
S-2
HALLMARK REHABILITATION, LP
By: Hallmark Rehabilitation GP, LLC
By: \s\ Roland G. Rapp
--------------------------------
Name: Roland G. Rapp
Title: Secretary
HANCOCK PARK REHABILITATION CENTER, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
HANCOCK PARK SENIOR ASSISTED LIVING, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
HEMET SENIOR ASSISTED LIVING, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
LEASEHOLD RESOURCE GROUP, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
MONTEBELLO CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
S-3
RIO HONDO SUBACUTE AND NURSING
CENTER, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
ROYALWOOD CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
SHARON CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
SKILLED HEALTHCARE, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
SUMMIT CARE CORPORATION
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
SUMMIT CARE TEXAS MANAGEMENT, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
S-4
SUMMIT CARE PHARMACY, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
SUMMIT CARE TEXAS, L.P.
By: Summit Care Texas Management, LLC
By: \s\ Roland G. Rapp
-----------------------------
Name: Roland G. Rapp
Title: Secretary
SYCAMORE PARK CARE CENTER, INC.
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
WOODLAND CARE CENTER, LLC
By: \s\ Roland G. Rapp
------------------------------------
Name: Roland G. Rapp
Title: Secretary
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EXHIBIT A-1
(Face of Note)
[IF THE NOTE IS A GLOBAL NOTE, THEN INSERT: THIS NOTE IS A GLOBAL NOTE
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE
ORIN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.]
[IF THE NOTE IS A GLOBAL NOTE AND THE DEPOSITORY TRUST COMPANY IS TO BE
THE DEPOSITARY THEREFOR, THEN INSERT: UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN]
FOUNTAIN VIEW, INC
SENIOR SUBORDINATED SECURED INCREASING RATE NOTES DUE 2008
CUSIP No. _____ _____
[ISIN: ______________]
No. __________
$ [_______]
Fountain View, Inc, a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to __________, or registered assigns, the principal sum of
_______ Dollars (such amount the "principal amount" of this Note) [IF THE NOTE
IS A GLOBAL NOTE, THEN INSERT --, or such other principal amount as may be set
forth in the records of the Trustee as referred to in accordance with the
Indenture,] on the earlier of
(i) August 19, 2008; or
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(ii) one Business Day after the final scheduled principal payment under
the Exit Facility (as defined in the Indenture referred below) becomes due,
at the office or agency of the Company in the Borough of Manhattan, City of New
York, State of New York, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest semi-annually on February 19 and
August 19 of each year (each, an "Interest Payment Date"), on said principal sum
at the rate per annum specified below, at such office or agency, in like coin or
currency, from the February 19 or August 19, as the case may be, to which
interest on the Notes has been paid preceding the date hereof (unless the date
thereof is a February 19 or a August 19 to which interest has been paid, in
which case from the date thereof) until payment of said principal sum has been
made or duly provided for. This Note shall bear interest at the rate of 9 1/4%
per annum until August 19, 2004, at the rate of 11 1/4% per annum from August
20, 2004 until August 19, 2005, at the rate of 13 1/4% per annum from August 20,
2005 until August 19, 2006 and at the rate of 15% per annum after August 19,
2006, until the principal hereof is paid or made available for payment. Interest
will be computed on the basis of a 360 day year consisting of twelve 30-day
months.
The interest that is so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the record date for such Interest Payment
Date, which shall be the February 5 or August 5 (the "Regular Record Date")
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on the relevant Regular
Record Date and shall be paid to the Person in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on a special
record date for the payment of such defaulted interest to be fixed by the
Trustee in accordance with Section 2.12 of the Indenture, notice whereof shall
be given to Holders of Notes not less than 15 days prior to such special record
date, or shall be paid in any other lawful manner not inconsistent with the
requirements of any national securities exchange on which the Notes may then be
listed.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: __________________, _____
FOUNTAIN VIEW, INC.
By: _____________________________
Name: _____________________________
Title: _____________________________
This is one of the [Global] Notes
referred to in the within-mentioned
Indenture:
U.S. Bank National Association,
as Trustee
By: _____________________________
Name: _____________________________
Title: _____________________________
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(Back of Note)
SENIOR SUBORDINATED SECURED INCREASING RATE NOTES DUE 2008
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Indenture. This Note is one of a duly authorized issue of
Notes of the Company designated as its Senior Subordinated Secured Increasing
Rate Notes due 2008 (herein called the "Notes"), issued under an Indenture,
dated as of August 19, 2003 (herein called the "Indenture", which term shall
have the meaning assigned to in such instrument), among the Company, the
Subsidiaries acting as Guarantors and U.S. Bank National Association, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the applicable Regular Record Date next preceding
the Interest Payment Date, even if such Notes are cancelled after such Regular
Record Date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. Principal and
interest on the Notes will be payable at the office or agency of the Company
maintained for such purpose or, at the option of the Company, payment of
interest may be made by check mailed to the Holders of the Notes at their
respective addresses set forth in the register of Holders of Notes; provided
that all payments of principal and interest with respect to Notes the Holders of
which have given wire transfer instructions to the Company prior to the Regular
Record Date will be required to be made by wire transfer of immediately
available funds within the United States to the accounts specified by the
Holders thereof. Until otherwise designated by the Company, the Company's office
or agency in New York will be the office of the Trustee maintained for such
purpose. The Notes will be issued in denominations of $1.00 and integral
multiples thereof. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
3. Paying Agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Security. The payment of principal of and interest on the
Notes is secured by the Liens of the Security Documents pursuant to, and subject
to the terms (including the provisions of Article 11) of the Indenture, the
Security Agreement and the other Security Documents.
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5. Subordination. The payment of the Notes will, to the extent
set forth in the Indenture, be subordinated in right of payment to the prior
payment in full of all Senior Debt.
6. Redemption. The Notes are subject to redemption, at the option
of the Company, in whole or in part, at any time and from time to time on or
after the Effective Date and prior to Maturity, upon not less than 30 nor more
than 60 days' notice mailed to each Holder of Notes to be redeemed at such
Holder's address appearing in the register of the Notes, in amounts of $1.00 (or
such lesser amount if the entire principal amount of such Security is redeemed)
or an integral multiple of $1.00, at the redemption price of 100% of the
principal amount plus accrued and unpaid interest, if any, to but excluding the
redemption date (subject to the right of Holders of record on the immediately
preceding Regular Record Date to receive interest due on an Interest Payment
Date that is on or prior to the redemption date).
7. Prepayments. Except as set forth in Paragraphs 7 and 8 below,
the Company shall not be required to make mandatory redemption payments with
respect to the Notes.
8. Mandatory Prepayments. To the extent permitted by the terms of
the Exit Facility, the Company shall be required to make mandatory redemptions
of the Notes on a pro rata basis on the date which is 150 days following the end
of each Fiscal Year of the Company (the "Excess Cash Flow Payment Date") in an
amount equal to 80% of the Excess Cash Flow for the Fiscal Year ended most
recently prior to the applicable Excess Cash Flow Payment Date unless the amount
of such Excess Cash Flow is less than $2.0 million, in which case no redemption
from Excess Cash Flow shall be required. Any such mandatory redemption shall be
made at a redemption price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon to the Excess Cash Flow Payment Date. The
record date for such redemptions from Excess Cash Flow shall be the one hundred
and thirty-fifth day following the end of the Company's Fiscal Year.
9. Repurchase at Option of Holder.
(a) If there is a Change of Control, each Holder of Notes will
have the right to require the Company to make an offer (a "Change of Control
Offer") to repurchase all or any part (equal to $1.00 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 100% of the
aggregate principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of purchase (the "Change of Control Payment"). Within 15
Business Days following any Change of Control, the Company will mail a notice to
each Holder describing the circumstances giving rise to the Change of Control
and offering to repurchase Notes on the date specified in such notice, which
date shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed (the "Change of Control Payment Date"), pursuant to the
procedures required by the Indenture and described in such notice. The Company
will comply with the requirements of Rule 13e-4 and 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 Notes as a result of a Change of Control.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, when the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company will be required to make an offer to all Holders of Notes and to the
extent required by the terms thereof, an offer to
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the holders of any other Indebtedness of the Company that is pari passu with the
Notes or Indebtedness of a Restricted Subsidiary that is pari passu with its
Subsidiary Guarantee and containing provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with proceeds of sales of
assets (an "Asset Sale Offer"), to purchase the maximum principal amount of
Notes that may be purchased with the amount of Excess Proceeds allocated for the
Notes at an offer price in cash equal to 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase, in accordance
with the procedures set forth in the Indenture. To the extent that any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes tendered into such Asset Sale Offer
surrendered by Holders thereof exceeds the amount of Excess Proceeds allocated
for the Notes, the Trustee shall select the Notes to be purchased on a pro rata
basis. Upon completion of such Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero.
10. Notice of Redemption. Notice of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. Notes in denominations
larger than $1.00 may be redeemed in part. If any Note is to be redeemed in part
only, the notice of redemption that relates to such Note shall state the portion
of the principal amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
11. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1.00 and integral multiples of $1.00.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company or the Registrar is not required to
transfer or exchange any Note selected for redemption. Also, the Company or the
Registrar is not required to transfer or exchange any Notes for a period of 15
days before a selection of Notes to be redeemed.
12. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
13. Amendment, Supplement and Waiver. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the Guarantors and
the rights of the Holders of the Notes under the Indenture and the Security
Documents at any time by the Company, the Guarantors and the Trustee with the
consent of the Holders of at least 60% in aggregate principal amount of the then
outstanding Notes. The Indenture also contains provisions permitting the Holders
of at least 60% in aggregate principal amount of the Notes at the time
outstanding, on behalf of the Holders of all the Notes, to waive compliance by
the Company with certain provisions of the Indenture and the Security Documents
and certain past defaults under the Indenture and its consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon
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such Holder and upon all future Holders of the Note and of any Note issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
14. Defaults and Remedies. Events of Default include in summary
form: (i) default for 30 days in the payment when due of interest on the Notes;
(ii) default in payment when due of principal on the Notes; (iii) failure by the
Company or any of its Subsidiaries to comply with Section 4.07, 4.11, 4.15 or
Article 5 of the Indenture; (iv) failure by the Company or any of its
Subsidiaries for 30 days after notice to comply with any of the provisions of
Section 4.08, 4.10 or 4.20 of the Indenture; (v) failure by the Company or any
of its Subsidiaries for 60 days after written notice to comply with any of its
other agreements in the Indenture, the Notes or the Security Documents; (vi)
default 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 Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries),
whether such Indebtedness or Guarantee now exists or is created after the date
of the Indenture, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness after any applicable grace
period provided by the documents governing such Indebtedness, which default has
not been waived or (b) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
which has been not so paid or the maturity of which has been so accelerated,
aggregates $5.0 million or more (other than Existing Indebtedness, the Exit
Facility or the Senior Mortgage Loan, to the extent it is secured by or paid by
the drawing against a letter of credit permitted to be issued under the
Indenture); (vii) the receipt by the Collateral Agent of a written notice under
the Collateral Agency Agreement from the Claims Agent to realize and foreclose
upon the Collateral; (viii) failure by the Company or any Restricted
Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days; (ix)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries that is a Restricted Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary as set forth in the Indenture; (x) except as permitted by the
Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to
be unenforceable or invalid in any material respect or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Subsidiary Guarantee; (xi) the Liens created by the Security Documents shall at
any time not constitute a valid and perfected Liens on the Collateral intended
to be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Collateral Agent, free and clear of all other Liens (other than Permitted
Liens), or, except for expiration in accordance with its terms or amendment,
modification, waiver, termination or release in accordance with the terms of the
Indenture, any of the Security Documents shall for whatever reason be terminated
or cease to be in full force and effect, if in either case, such default
continues for 15 days after notice, or the enforceability thereof shall be
contested by the Company or any Subsidiary Guarantor; (xii) failure of the
Company to make, when due, any transfer, delivery, pledge, assignment or grant
of Collateral required to be made by it and such failure continues unremedied
for 10 Business Days after notice of such failure 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 then outstanding Notes; or
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(xiii) except as permitted by the Indenture, any Subsidiary Guarantee is held in
any judicial proceeding to be unenforceable or invalid in any material respect
or shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency as set forth in the
Indenture, with respect to the Company, any Significant Subsidiary that is a
Restricted Subsidiary or any group of Restricted Subsidiaries, that taken
together would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable without further action or notice. Holders of the Notes
may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of at least 60% in aggregate principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of at least 60% in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required, upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
15. Trustee Dealings with Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
16. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall not
have any liability for any obligations of the Company or any Guarantor under the
Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes. Such waiver may not
be effective to waive liabilities under the federal securities laws and it is
the view of the Commission that such a waiver is against public policy.
17. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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19. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other. identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Fountain View, Inc.
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92010
Attention: Chief Executive Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (i) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date: ___________________
Your Signature: ___________________
(Sign exactly as your name appears
on the face of this Note)
SIGNATURE GUARANTEE.
_______________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Sections 3.09 and 4.11 or Section 4.15 of the Indenture, check the
box below:
[ ] Sections 3.09 and 4.11 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Sections 3.09 and 4.11 or Section 4.15 of the Indenture,
state the amount you elect to have purchased: $__________
Date: ____________ Your Signature: ____________________________________
(Sign exactly as your name appears on the Note)
Tax Identification No: _____________________________
SIGNATURE GUARANTEE.
_______________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/1/
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
AMOUNT OF AMOUNT OF PRINCIPAL SIGNATURE
INCREASE IN DECREASE IN AMOUNT OF THIS OF
PRINCIPAL PRINCIPAL GLOBAL NOTE AUTHORIZED
AMOUNT OF AMOUNT OF FOLLOWING OFFICER OF
DATE OF THIS GLOBAL THIS GLOBAL SUCH DECREASE TRUSTEE OR
EXCHANGE NOTE NOTE (OR INCREASE) CUSTODIAN
- -------- ----------- ----------- -------------- ----------
- ---------------
/1/ This should be included only if the Note is issued in global form.
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EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of August 19, 2003 (the "Indenture") among
Fountain View, Inc., the Guarantors listed on the signature page thereto and
U.S. Bank National Association, as trustee (the "Trustee"), (a) the due and
punctual payment of the principal of and interest on the Notes (as defined in
the Indenture), whether at maturity, by acceleration, redemption or otherwise,
the due and punctual payment of interest on overdue principal, and, to the
extent permitted by law, interest, and the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee all in accordance
with the terms of the Indenture and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. The obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set
forth in Article 11 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, and (b) appoints the Trustee attorney-in-fact of such Holder for
such purpose; provided, however, that the Indebtedness evidenced by this
Subsidiary Guarantee shall cease to be so subordinated and subject in right of
payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.
The terms of Article 11 of the Indenture are incorporated herein by
reference.
Dated: _______________
SIGNATURES
ALEXANDRIA CARE CENTER, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
ALTA CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
B-1
ANAHEIM TERRACE CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
BAY CREST CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
BRIER OAK ON SUNSET, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
CARSON SENIOR ASSISTED LIVING, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
ELMCREST CARE CENTER, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
FOUNTAIN VIEW SUBACUTE AND NURSING
CENTER, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
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HALLMARK INVESTMENT GROUP, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
HALLMARK REHABILITATION GP, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
HALLMARK REHABILITATION, LP
By: Hallmark Rehabilitation GP, LLC
By: _____________________________
Name: Roland G. Rapp
Title: Secretary
HANCOCK PARK REHABILITATION CENTER, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
HANCOCK PARK SENIOR ASSISTED LIVING, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
HEMET SENIOR ASSISTED LIVING, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
B-3
LEASEHOLD RESOURCE GROUP, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
MONTEBELLO CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
RIO HONDO SUBACUTE AND NURSING
CENTER, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
ROYALWOOD CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
SHARON CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
SKILLED HEALTHCARE, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
B-4
SUMMIT CARE CORPORATION
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
SUMMIT CARE TEXAS MANAGEMENT, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
SUMMIT CARE PHARMACY, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
SUMMIT CARE TEXAS, L.P.
By: Summit Care Texas Management, LLC
By: _____________________________
Name: Roland G. Rapp
Title: Secretary
SYCAMORE PARK CARE CENTER, INC.
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
WOODLAND CARE CENTER, LLC
By: ____________________________________
Name: Roland G. Rapp
Title: Secretary
B-5
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "Supplemental Indenture"), dated as of
_______________, among _______________ (the "Guaranteeing Subsidiary"), a
subsidiary of Fountain View, Inc. (or its permitted successor), a Delaware
corporation (the "Company"), and U.S. Bank National Association, as trustee
under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of August 19, 2003 providing
for the issuance of an aggregate principal amount of up to $106,761,608 of
Senior Subordinated Secured Increasing Rate Notes due 2008 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations
of the Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on
the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the
C-1
Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the
terms hereof and thereof; and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other
obligations, that same will be promptly paid in full
when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity,
by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall
be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or
the Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
(c) The following is hereby waived: 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, protest, notice and
all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes
and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any
custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors,
any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall 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.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided
in Article 6 of the Indenture for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such Obligations (whether or not
due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
C-2
(h) The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guarantee.
(i) The obligations hereunder shall be subject to the
subordination provisions set forth in Section 11.2 and Article
12 of the Indenture.
3. Execution and Delivery. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc. on Certain Terms.
(a) The Guaranteeing Subsidiary may not consolidate with or merge
with or into (whether or not such Guarantor is the surviving
Person) another corporation, Person or entity whether or not
affiliated with such Guarantor unless:
(i) subject to Section 11.07 and 11.08 of the Indenture,
the Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or
the Company) unconditionally assumes all the
obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance
reasonably satisfactory to the Trustee, under the
Notes, the Indenture and the Subsidiary Guarantee on
the terms set forth herein or therein;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
(iii) except in the case of a merger of a Guarantor with or
into another Guarantor or a merger of a Guarantor
with or into the Company, the Company would be
permitted by virtue of the Company's pro forma Fixed
Charge Coverage Ratio, immediately after giving
effect to such transaction, to Incur at least $1.00
of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.10
of the Indenture.
(b) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the Subsidiary
Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the
Indenture to be performed by the Guarantor, such successor
corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor corporation thereupon may cause
to be signed any or all of the Subsidiary Guarantees to be
endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and
benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the
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terms of the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution
hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained
in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another
Guarantor.
5. Releases.
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the
Capital Stock of any Guarantor (other than to the Company or
another Guarantor), then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor
(other than to the Company or another Guarantor)) or the
entity acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any Obligations
under its Subsidiary Guarantee and the Security Documents and
any such acquiring entity will not be required to assume any
Obligations of such Guarantor under the applicable Subsidiary
Guarantee and the Security Documents; provided that such sale
or other disposition complies with all applicable provisions
of the Indenture including, without limitation, Section 4.11
hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including
without limitation Section 4.11 of the Indenture, the Trustee
shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee.
(b) Any Guarantor not released from its Obligations under its
Subsidiary Guarantee shall remain liable for the full amount
of principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided
in Article 11 of the Indenture.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the Commission that such a waiver is against public policy.
C-4
7. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ____________, _____
[Guaranteeing Subsidiary]
By: ______________________________
Name: ______________________________
Title: ______________________________
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: ______________________________
Name: ______________________________
Title: ______________________________
C-5
EXHIBIT D
FORM OF INTERCREDITOR AGREEMENT
D-1
EXHIBIT E
FORM OF SECURITY AGREEMENT
E-1
SCHEDULE I
EXISTING AFFILIATE TRANSACTIONS
SCH I-1
SCHEDULE II
GUARANTORS
Summit Care Corporation
Summit Care Pharmacy, Inc.
Alexandria Care Center, Inc.
Brier Oak on Sunset, Inc.
Elmcrest Care Center, Inc.
Hancock Park Rehabilitation Center, Inc.
Hancock Park Senior Assisted Living, Inc.
Fountain View Subacute and Nursing Center, Inc.
Rio Hondo Subacute and Nursing Center, Inc.
Sycamore Park Care Center, Inc.
Anaheim Terrace Care Center, LLC
Bay Crest Care Center, LLC
Alta Care Center, LLC
Royalwood Care Center, LLC
Sharon Care Center, LLC
Woodland Care Center, LLC
Carson Senior Assisted Living, LLC
Hemet Senior Assisted Living, LLC
Montebello Care Center, LLC
Summit Care Texas, L.P.
Summit Care Texas Management, LLC
Hallmark Investment Group, Inc.
Hallmark Rehabilitation GP, LLC
Hallmark Rehabilitation, LP
Leasehold Resource Group, LLC
Skilled Healthcare, LLC
SCH II-1
SCHEDULE III
MEZZANINE LOAN BORROWERS
SHG Property Resources, LLC
SHG Investments, LLC
SCH III-1
SCHEDULE IV
PERMITTED JOINT VENTURES
APS-Summit Care Pharmacy, L.L.C.
SCH IV-1
SCHEDULE V
EXISTING LIENS
None
SCH V-1
SCHEDULE VI
REVOLVING CREDIT FACILITY BORROWERS
Borrowers:
----------
Carehouse Healthcare Center, LLC
Devonshire Care Center, LLC
The Earlwood, LLC
Fountain Care Center, LLC
Fountain Senior Assisted Living, LLC
Spring Senior Assisted Living, LLC
Valley Healthcare Center, LLC
Villa Maria Healthcare Center, LLC
Willow Creek Healthcare Center, LLC
Texas Cityview Care Center, LP
Clairmont Beaumont, LP
Clairmont Longview, LP
The Clairmont Tyler, LP
Colonial New Braunfels Care Center, LP
Colonial Tyler Care Center, LP
Coronado Nursing Center, LP
Hallesttsville Rehabilitation and Nursing Center, LP
Texas Heritage Oaks Nursing and Rehabilitation Center, LP
Hospitality Nursing and Rehabilitation Center, LP
Monument Rehabilitation and Nursing Center, LP
Oak Crest Nursing Center, LP
Flatonia Oak Manor, LP
Oakland Manor Nursing Center, LP
Southwood Care Center, LP
Town and Country Manor, LP
West Side Campus of Care, LP
Comanche Nursing Center, LP
Guadalupe Valley Nursing Center, LP
Briarcliff Nursing and Rehabilitation Center, LP
Live Oak Nursing Center, LP
SCH VI-1
SCHEDULE VII
SENIOR MORTGAGE LOAN BORROWERS
California Secured Resources, LLC
Texas Secured Resources, LLC
SHG Secured Resources, LP
Carehouse Healthcare Center, LLC
Devonshire Care Center, LLC
The Earlwood, LLC
Fountain Care Center, LLC
Fountain Senior Assisted Living, LLC (Ashton Court)
Spring Senior Assisted Living, LLC
Valley Healthcare Center, LLC
Villa Maria Healthcare Center, LLC
Willow Creek Healthcare Center, LLC
Texas Cityview Care Center, LP
Clairmont Beaumont, LP
Clairmont Longview, LP
The Clairmont Tyler, LP
Colonial New Braunfels Care Center, LP
Colonial Tyler Care Center, LP
Coronado Nursing Center, LP
Hallesttsville Rehabilitation and Nursing Center, LP
Texas Heritage Oaks Nursing and Rehabilitation Center, LP
Hospitality Nursing and Rehabilitation Center, LP
Monument Rehabilitation and Nursing Center, LP
Oak Crest Nursing Center, LP
Flatonia Oak Manor, LP
Oakland Manor Nursing Center, LP
Southwood Care Center, LP
Town and Country Manor, LP
West Side Campus of Care, LP
Comanche Nursing Center, LP
Guadalupe Valley Nursing Center, LP
Briarcliff Nursing and Rehabilitation Center, LP
Live Oak Nursing Center, LP
SCH VII-1