Exhibit 4.7
DaVita Inc.
as Issuer,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
$225,000,000
9 1/4 % Senior Subordinated Notes
due April 15, 2011
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INDENTURE
Dated as of April 11, 2001
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U.S. TRUST COMPANY
OF TEXAS, NATIONAL ASSOCIATION
as Trustee
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.................................................................. 1
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA............................................ 27
SECTION 1.3. RULES OF CONSTRUCTION........................................................ 27
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM AND DATING.............................................................. 28
SECTION 2.2. EXECUTION AND AUTHENTICATION................................................. 29
SECTION 2.3. REGISTRAR, PAYING AGENT AND DEPOSITARY....................................... 29
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.......................................... 30
SECTION 2.5. HOLDER LISTS................................................................. 30
SECTION 2.6. TRANSFER AND EXCHANGE........................................................ 30
SECTION 2.7. REPLACEMENT NOTES............................................................ 45
SECTION 2.8. OUTSTANDING NOTES............................................................ 45
SECTION 2.9. TREASURY NOTES............................................................... 45
SECTION 2.10. TEMPORARY NOTES.............................................................. 46
SECTION 2.11. CANCELLATION................................................................. 46
SECTION 2.12. DEFAULTED INTEREST........................................................... 46
SECTION 2.13. CUSIP NUMBERS................................................................ 47
ARTICLE III
REDEMPTION
SECTION 3.1. OPTIONAL REDEMPTION.......................................................... 47
SECTION 3.2. NOTICES TO TRUSTEE........................................................... 48
SECTION 3.3. SELECTION OF NOTES TO BE REDEEMED............................................ 49
SECTION 3.4. NOTICE OF REDEMPTION......................................................... 49
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION............................................... 50
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE.................................................. 50
SECTION 3.7. NOTES REDEEMED IN PART....................................................... 51
SECTION 3.8. NO MANDATORY REDEMPTION...................................................... 51
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ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF NOTES............................................................... 51
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY................................................ 52
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS.............................................. 52
SECTION 4.4. CORPORATE AND PARTNERSHIP EXISTENCE............................................ 54
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS.............................................. 54
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE........................................ 55
SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT...................................... 55
SECTION 4.8. REPORTS........................................................................ 56
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT COMPANY..................................... 56
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES..................................... 56
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS ........................... 57
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES......................................................... 59
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS........................................... 60
SECTION 4.14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK............................. 61
SECTION 4.15. WAIVER OF STAY, EXTENSION OR USURY LAWS........................................ 66
SECTION 4.16. LIMITATION ON LIENS SECURING INDEBTEDNESS...................................... 67
SECTION 4.17. LIMITATIONS ON LINES OF BUSINESS............................................... 67
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.................................... 67
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.............................................. 68
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.............................................................. 68
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SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT....................... 70
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE............... 71
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.............................................. 71
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES........................ 72
SECTION 6.6. PRIORITIES.................................................................... 72
SECTION 6.7. LIMITATION ON SUITS........................................................... 73
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST..... 74
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE................................................ 74
SECTION 6.10. DELAY OR OMISSION NOT WAIVER.................................................. 74
SECTION 6.11. CONTROL BY HOLDERS............................................................ 74
SECTION 6.12. WAIVER OF EXISTING OR PAST DEFAULT............................................ 75
SECTION 6.13. UNDERTAKING FOR COSTS......................................................... 75
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES............................................ 76
ARTICLE VII
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE............................................................. 76
SECTION 7.2. RIGHTS OF TRUSTEE............................................................. 77
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.................................................. 79
SECTION 7.4. TRUSTEE'S DISCLAIMER.......................................................... 79
SECTION 7.5. NOTICE OF DEFAULT............................................................. 79
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS................................................. 79
SECTION 7.7. COMPENSATION AND INDEMNITY.................................................... 79
SECTION 7.8. REPLACEMENT OF TRUSTEE........................................................ 81
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.............................................. 82
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION................................................. 82
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY............................. 82
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...................... 82
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE................................................ 82
SECTION 8.3. COVENANT DEFEASANCE........................................................... 83
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SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................................... 83
SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS...................................................... 84
SECTION 8.6. REPAYMENT TO THE COMPANY...................................................... 85
SECTION 8.7. REINSTATEMENT................................................................. 85
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............................ 86
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT OF HOLDERS....... 87
SECTION 9.3. COMPLIANCE WITH TIA........................................................... 88
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS............................................. 88
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.............................................. 89
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC............................................... 89
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL...... 89
ARTICLE XI
GUARANTEE
SECTION 11.1. GUARANTEE..................................................................... 93
SECTION 11.2. EXECUTION AND DELIVERY OF GUARANTEE........................................... 95
SECTION 11.3. CERTAIN BANKRUPTCY EVENTS..................................................... 95
SECTION 11.4. LIMITATION ON MERGER OF SUBSIDIARIES AND RELEASE OF GUARANTORS................ 95
SECTION 11.5. SUBORDINATION OF GUARANTEES................................................... 96
ARTICLE XII
SUBORDINATION
SECTION 12.1. NOTES SUBORDINATED TO SENIOR DEBT............................................. 96
SECTION 12.2. NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES.................................. 97
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SECTION 12.3. NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT ON DISSOLUTION,
LIQUIDATION OR REORGANIZATION................................................ 98
SECTION 12.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT......... 99
SECTION 12.5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS UNCONDITIONAL.................. 99
SECTION 12.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF NOTICE...... 100
SECTION 12.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT........................... 100
SECTION 12.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE COMPANY, THE
GUARANTORS OR HOLDERS OF SENIOR DEBT......................................... 100
SECTION 12.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF NOTES....... 101
SECTION 12.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT......................................... 101
SECTION 12.11. ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT................................. 102
SECTION 12.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR DEBT....................... 102
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA CONTROLS................................................................. 102
SECTION 13.2. NOTICES ..................................................................... 102
SECTION 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS................................. 104
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................... 104
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................................ 104
SECTION 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.................................... 105
SECTION 13.7. LEGAL HOLIDAYS............................................................... 105
SECTION 13.8. GOVERNING LAW................................................................ 105
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS................................ 106
SECTION 13.10. NO RECOURSE AGAINST OTHERS................................................... 106
SECTION 13.11. SUCCESSORS................................................................... 106
SECTION 13.12. DUPLICATE ORIGINALS.......................................................... 106
SECTION 13.13. SEVERABILITY................................................................. 106
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC............................................. 107
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SECTION 13.15. QUALIFICATION OF INDENTURE.................................................. 107
SECTION 13.16. REGISTRATION RIGHTS......................................................... 107
SECTION 13.17. BENEFITS OF INDENTURE....................................................... 107
SIGNATURES.................................................................................... S-1
EXHIBIT A FORM OF SECURITY............................................................ A-1
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER............................................. B-1
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE............................................. C-1
EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRINGINSTITUTIONAL ACCREDITED INVESTOR......... D-1
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- -------
310(a)(1)....................................................................................... 7.10
(a)(2)....................................................................................... 7.10
(a)(3)....................................................................................... N.A.
(a)(4)....................................................................................... N.A.
(a)(5)....................................................................................... 7.10
(b).......................................................................................... 7.10
(c).......................................................................................... N.A.
311(a).......................................................................................... 7.11
(b).......................................................................................... 7.11
(c).......................................................................................... N.A.
312(a).......................................................................................... 2.5
(b).......................................................................................... 13.3
(c).......................................................................................... 13.3
313(a).......................................................................................... 7.6
(b).......................................................................................... 7.6
(c).......................................................................................... 7.6
(d).......................................................................................... N.A.
314(a).......................................................................................... 4.7(a)
(b)(1)....................................................................................... N.A.
(b)(2)....................................................................................... N.A.
(c)(1)....................................................................................... N.A.
(c)(2)....................................................................................... N.A.
(c)(3)....................................................................................... N.A.
(d).......................................................................................... N.A.
(e).......................................................................................... N.A.
(f).......................................................................................... N.A.
315(a).......................................................................................... N.A.
(b).......................................................................................... N.A.
(c).......................................................................................... N.A.
(d).......................................................................................... N.A.
(e).......................................................................................... N.A.
316(a)(last sentence)........................................................................... N.A.
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TIA Indenture
Section Section
- ------- -------
(a)(1)(A).................................................................................... N.A.
(a)(1)(B).................................................................................... N.A.
(a)(2)....................................................................................... N.A.
(b).......................................................................................... N.A.
317(a)(1)....................................................................................... N.A.
(a)(2)....................................................................................... N.A.
(b).......................................................................................... N.A.
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
viii
INDENTURE, dated as of April 11, 2001, by and between DaVita Inc., a
Delaware corporation (the "Company"), and U.S. Trust Company of Texas, National
Association, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 9
1/4% Series A Senior Subordinated Notes due 2011 and the class of 9 1/4% Series
B Senior Subordinated Notes due 2011 to be exchanged for the 9 1/4% Series A
Senior Subordinated Notes due 2011:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS
"144A Global Note" means one or more Global Notes bearing the Private
Placement Legend that will be issued in an aggregate amount of denominations
equal in total to the outstanding principal amount of the Notes sold in reliance
on Rule 144A.
"Acquired Indebtedness" means Indebtedness (including Disqualified Capital
Stock) of any Person existing at the time such Person becomes a Subsidiary of
the Company, including by designation, or is merged or consolidated into or with
the Company or one of its Subsidiaries.
"Acquisition" means the purchase or other acquisition of any Person or all
or substantially all the assets of any Person or an operating business unit of
any Person by any other Person, whether by purchase, merger, consolidation, or
other transfer, and whether or not for consideration.
"Additional Notes" means additional Notes that may be issued pursuant to
this Indenture after the Issue Date, other than pursuant to an Exchange Offer or
otherwise in exchange for or in replacement of outstanding Notes.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise; provided, that with respect to ownership interest in the Company
and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting
power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control. Notwithstanding the foregoing, Affiliate shall not include Wholly Owned
Subsidiaries.
"Affiliate Transaction" shall have the meaning specified in Section 4.10.
"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 at
the relevant time.
"Asset Sale" shall have the meaning specified in Section 4.14.
"Asset Sale Offer" shall have the meaning specified in Section 4.14.
"Asset Sale Offer Amount" shall have the meaning specified in Section 4.14.
"Asset Sale Offer Period" shall have the meaning specified in Section 4.14.
"Asset Sale Offer Price" shall have the meaning specified in Section 4.14.
"Attributable Indebtedness" means in respect of a Sale-Leaseback
Transaction, as at the time of determination, the present value (discounted at
the interest rate borne by the Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale-Leaseback Transaction (including any period for
which such lease has been extended).
"Authentication Order" shall have the meaning specified in Section 2.2.
"Average Life" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (1) the sum of the
products (a) of the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (2) the sum of all such principal (or redemption)
payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal, state
or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the definition of
Change of Control and Affiliate has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether or
not applicable.
"Board of Directors" means, with respect to any Person, the board of
directors (or, if not a corporation, the equivalent board of managers or members
or body performing similar functions) of such Person or any committee of the
Board of Directors of such Person authorized, with respect to any particular
matter, to exercise the power of the board of directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
2
"Broker-Dealer" means any broker-dealer that receives Exchange Notes for
its own account in the Exchange Offer in exchange for Notes that were acquired
by such broker-dealer as a result of market-making or other trading activities.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Expenditure Indebtedness" of any Person means any Indebtedness of
such Person to any seller or other Person incurred solely to finance the
acquisition (including in the case of a Capitalized Lease Obligation, the
lease), construction, installation or improvement of any real or personal
tangible property or computer software which is directly related to a Related
Business of the Company and which is incurred within 180 days of such
acquisition or concurrently with completion of such construction, installation
or improvement and which is secured only by the assets so financed and any
attachments thereto or proceeds thereof.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not itself otherwise capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"Cash" or "cash" means 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 or private debts.
"Cash Equivalent" means:
(1) securities issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided,
that the full faith and credit of the United States of America is pledged in
support thereof), or
(2) U.S. dollar denominated and Eurodollar time deposits, bankers'
acceptances and certificates of deposit and commercial paper issued by the
parent corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000, or
(3) commercial paper issued by others rated at least A-2 or the equivalent
thereof by S&P or at least P-2 or the equivalent thereof by Moody's, or
3
(4) readily marketable direct obligations issued by any state of the United
States of America or any political subdivision thereof having one of the two
highest rating categories obtainable from either Moody's or S&P, or
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (1) and (2) above
entered into with any financial institution meeting the qualifications specified
in clause (2) above, or
(6) interests in regulated money market mutual funds that invest at least
95% of their funds in assets or securities of the type described in clauses (1)
through (5) above.
and in the case of each of (1), (2), (3) and (4) maturing within one year after
the date of acquisition.
"Change of Control" means:
(1) any sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation) of all or substantially all of the
Company's assets, on a consolidated basis, in one transaction or a series
of related transactions, to any "person" (including any group that is
deemed to be a "person");
(2) the consummation of any transaction, including, without
limitation, any merger or consolidation, whereby any "person" (including
any group that is deemed to be a "person" ) is or becomes the "beneficial
owner," directly or indirectly, of more than 35% of the aggregate Voting
Equity Interests of the surviving entity or entities;
(3) the Continuing Directors cease for any reason to constitute a
majority of the Company's Board of Directors then in office; or
(4) the Company adopts a plan of liquidation.
As used in this definition, "person" (including any group that is
deemed to be a "person") has the meaning given by Sections 13(d) of the Exchange
Act, whether or not applicable.
"Change of Control Offer" shall have the meaning specified in Section 10.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Date" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Price" shall have the meaning specified in
Section 10.1.
"Clearstream" means Clearstream Banking S.A., or its successors.
"Code" means the Internal Revenue Code of 1986, as amended.
4
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture, and thereafter means such successor.
"Consolidated Coverage Ratio" of any Person on any date of determination
(the "Transaction Date") means the ratio, on a pro forma basis, of (a) the
aggregate amount of Consolidated EBITDA of such Person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such Person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such Person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that for purposes of
such calculation:
(1) Acquisitions which occurred during the Reference Period or subsequent
to the Reference Period and on or prior to the Transaction Date shall be assumed
to have occurred on the first day of the Reference Period without regard to the
effect of clause (c) of the definition of "Consolidated Net Income", and any pro
forma adjustments shall be made in accordance with Regulation S-X promulgated by
the Securities and Exchange Commission,
(2) transactions giving rise to the need to calculate the Consolidated
Coverage Ratio shall be assumed to have occurred on the first day of the
Reference Period without regard to the effect of clause (c) of the definition of
"Consolidated Net Income",
(3) other than with respect to Indebtedness under revolving credit
facilities incurred in the ordinary course of business for general corporate
purposes and not for Acquisitions, (i) the incurrence of any Indebtedness
(including issuance of any Disqualified Capital Stock), and the application of
the proceeds therefrom to the extent used to refinance or retire other
Indebtedness, or (ii) the repayment of any Indebtedness with the Net Cash
Proceeds from any Asset Sale applied to permanently reduce the outstanding
amounts or the commitments with respect to such Indebtedness pursuant to clause
(1)(b)(ii) of the first paragraph of Section 4.14, in each case, during the
Reference Period or subsequent to the Reference Period and on or prior to the
Transaction Date shall be assumed to have occurred on the first day of the
Reference Period, and
(4) the Consolidated Fixed Charges of such Person attributable to interest
on any Indebtedness or dividends on any Disqualified Capital Stock bearing a
floating interest (or dividend) rate shall be computed on a pro forma basis as
if the average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
Person or any of its Subsidiaries is a party to an Interest Swap or Hedging
Obligation (which shall remain in effect for the 12-month period immediately
following the Transaction Date) that has the effect of fixing the interest rate
on the date of computation, in which case such rate (whether higher or lower)
shall be used.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the Consolidated Net Income of such Person for such period adjusted to exclude
all losses that are either extraordinary
5
(as determined in accordance with GAAP) or are either unusual or nonrecurring
and to add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of
(1) Consolidated income tax expense,
(2) Consolidated depreciation and amortization expense,
(3) Consolidated Fixed Charges,
(4) all other non-recurring non-cash charges of such Person and its
Consolidated Subsidiaries,
(5) Goodwill Impairment Charges, and
(6) Minority Interest,
less the amount of all cash payments made by such Person or any of its
Subsidiaries during such period to the extent such payments relate to
non-recurring non-cash charges that were added back in determining Consolidated
EBITDA for such period or any prior period; provided, that consolidated income
tax expense and depreciation and amortization and other non-recurring non-cash
charges of a Subsidiary that is a less than Wholly Owned Subsidiary shall only
be added to the extent of the equity interest of such Person in such Subsidiary,
and with respect to the Company, any cash payments made by the Company or one of
the Company's Subsidiaries, not exceeding $15,000,000 in the aggregate, paid to
settle or otherwise finally resolve the Florida Overpayment Dispute shall not be
so subtracted.
"Consolidated Fixed Charges" of any Person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of:
(a) interest expensed or capitalized, paid, accrued, or scheduled to be
paid or accrued (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations) of such Person and its
Consolidated Subsidiaries during such period, including (1) original issue
discount and non-cash interest payments or accruals on any Indebtedness, (2) the
interest portion of all deferred payment obligations, and (3) all commissions,
discounts and other fees and charges owed with respect to bankers' acceptances
and letters of credit financings and currency and Interest Swap and Hedging
Obligations, in each case to the extent attributable to such period, and
(b) the amount of dividends accrued or payable (or guaranteed) by such
Person or any of its Consolidated Subsidiaries in respect of Preferred Stock
(other than by Subsidiaries of such Person to such Person or such Person's
Consolidated Subsidiaries), excluding all non-cash dividends which, pursuant to
the terms of the Preferred Stock in respect thereof, may not be converted to or
otherwise paid in cash prior to 91 days after the Stated Maturity.
6
For purposes of this definition, (x) interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
in good faith by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guarantee by such Person or
a Subsidiary of such Person of an obligation of another Person shall be deemed
to be the interest expense attributable to the Indebtedness guaranteed.
"Consolidated Minority Adjusted EBITDA Ratio" of any Person on any date of
determination means the ratio, on a pro forma basis, of (a) the aggregate amount
of Consolidated EBITDA of such Person attributable to continuing operations and
businesses (exclusive of amounts attributable to operations and businesses
permanently discontinued or disposed of) for the Reference Period, less the
Minority Interest of such Person, to (b) the aggregate amount of Consolidated
EBITDA of such Person attributable to continuing operations and businesses
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of) for the Reference Period.
"Consolidated Net Income" means, with respect to any Person for any period,
the net income (or loss) of such Person and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP) for such period,
adjusted to exclude (only to the extent included in computing such net income
(or loss) and without duplication):
(a) all gains (but not losses) that are either extraordinary (as determined
in accordance with GAAP) or are either unusual or nonrecurring (including any
gain from the sale or other disposition of assets outside the ordinary course of
business or from the issuance or sale of any capital stock),
(b) the net income, if positive, of any Person, other than a Consolidated
Subsidiary, in which such Person or any of its Consolidated Subsidiaries has an
interest, except to the extent of the amount of any dividends or distributions
actually paid in cash to such Person or a Consolidated Subsidiary of such Person
during such period, but in any case not in excess of such Person's pro rata
share of such Person's net income for such period,
(c) the net income or loss of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition,
(d) the net income, if positive, of any of such Person's Consolidated
Subsidiaries to the extent that the declaration or payment of dividends or
similar distributions is not at the time permitted by operation of the terms of
its charter or bylaws or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Consolidated
Subsidiary,
(e) the net income of, and all dividends and distributions from, any
Unrestricted Subsidiary, and
(f) the cumulative effect of a change in accounting principles.
7
"Consolidated Subsidiary" means, for any Person, each Subsidiary of such
Person (whether now existing or hereafter created or acquired) the financial
statements of which are consolidated for financial statement reporting purposes
with the financial statements of such Person in accordance with GAAP.
"Consolidation" means, with respect to the Company, the consolidation of
the accounts of the Subsidiaries with those of the Company, all in accordance
with GAAP; provided, that "consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary with the accounts of the Company. The
term "consolidated" has a correlative meaning to the foregoing.
"Continuing Director" means during any period of 12 consecutive months
after the Issue Date, individuals who at the beginning of any such 12-month
period constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved, including new directors designated in or provided for in an agreement
regarding the merger, consolidation or sale, transfer or other conveyance, of
all or substantially all of the assets of the Company, if such agreement was
approved by a vote of such majority of directors).
"Corporate Trust Office" means the office of the Trustee in the Borough of
Manhattan, The City of New York.
"Covenant Defeasance" shall have the meaning specified in Section 8.3.
"Credit Agreement" means the Second Amended and Restated Revolving Credit
Agreement and the Second Amended and Restated Term Loan Agreement, each dated as
of July 14, 2000, by and among the Company and certain financial institutions
and agents party thereto, and, in each case, any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as such credit agreement and/or related documents may be amended,
restated, supplemented, renewed, replaced or otherwise modified from time to
time whether or not with the same agent, trustee, representative lenders or
holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Credit Agreement" shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement (or any Affiliate of such lenders) and
shall also include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to any Credit Agreement and all
refundings, refinancings and replacements in whole or in part of any Credit
Agreement with any other credit agreement, including any credit agreement:
(1) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby,
(2) adding or deleting borrowers or guarantors thereunder, so long as
borrowers and issuers include one or more of the Company and its Subsidiaries
and their respective successors and assigns,
8
(3) increasing the amount of Indebtedness incurred thereunder or available
to be borrowed thereunder; provided, that on the date such Indebtedness is
incurred it would not be prohibited by paragraph (c) of Section 4.11,or
(4) otherwise altering the terms and conditions thereof in a manner not
prohibited by the terms of this Indenture.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Debt Incurrence Ratio" shall have the meaning specified in Section 4.11.
"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.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Definitive Notes" means one or more certificated Notes registered in the
name of the Holder thereof and issued in accordance with Section 2.6 hereof, in
the form of Exhibit A hereto except that such Note shall not include the
information called for by footnotes 3, 4 and 8 thereof.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the person specified in Section 2.3 as the Depositary
with respect to the Notes, until a successor shall have been appointed and
become such pursuant to the applicable provision of this Indenture, and,
thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means (i) all Indebtedness outstanding under the
Credit Agreement and (ii) any other Senior Indebtedness permitted to be incurred
under this Indenture that (a) at the time of determination exceeds $20,000,000
in aggregate principal amount outstanding and (b) is specifically designated in
the instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by the Company.
"Disqualified Capital Stock" means with respect to any Person, (a) Equity
Interests of such Person that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time or both would be, required to be redeemed or
repurchased (including at the option of the holder thereof) by such Person or
any of its Subsidiaries, in whole or in part, on or prior to 91 days following
the Stated Maturity of the Notes and (b) any Equity Interests of any Subsidiary
of such Person other than any common equity with no preferences, privileges, and
no redemption or repayment provisions; provided, however, that any Equity
Interest that would constitute Disqualified Capital Stock solely because the
holders thereof have the right to require the issuer to repurchase such
Disqualified Capital Stock upon the occurrence of a change of control shall not
constitute Disqualified Capital Stock if the terms of such Equity Interest
provide that (i) any such repurchases may not be made sooner than 10 days after
the Change of Control Purchase Date for the Notes and (ii) such Equity Interests
so
9
repurchased are fully and absolutely subordinated to the indefeasible payment
in full of all principal, interest and other amounts due under the Notes
repurchased on such Change of Control Purchase Date, and any Equity Interest not
so repurchased shall remain so fully and absolutely subordinated to the Notes
not so repurchased.
"Distribution Compliance Period" means the 40-day restricted period as
defined in Regulation S.
"Equity Interests" means Capital Stock or partnership, participation or
membership interests and all warrants, options or other rights to acquire
Capital Stock or partnership, participation or membership interests (but
excluding any debt security that is convertible into, or exchangeable for,
Capital Stock or partnership, participation or membership interests).
"Euroclear" means Euroclear Bank S.A/N.V., or its successor, as operator of
the Euroclear system.
"Event of Default" shall have the meaning specified in Section 6.1.
"Excess Proceeds" shall have the meaning specified in Section 4.14.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Exchange Notes" means Series B Notes issued pursuant to an Exchange Offer.
"Exchange Offer" means an offer that may be made by the Company pursuant to
the Registration Rights Agreement to exchange Exchange Notes for Series A Notes.
"Exchange Offer Registration Statement" shall have the meaning set forth in
the Registration Rights Agreement.
"Exempted Affiliate Transaction" means (a) the payment of reasonable fees
and compensation to and indemnity provided for the benefit of directors,
officers or employees of the Company or any Guarantor in the ordinary course of
business, (b) transactions solely between the Company and any of its
Consolidated Subsidiaries or solely among Consolidated Subsidiaries of the
Company, (c) any issuance of securities pursuant to, or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock option and stock ownership plans approved by the
Board of Directors of the Company, (d) loans or advances to employees in the
ordinary course of business in accordance with past practices of the Company or
any Guarantor, but in any event not to exceed $10,000,000 in the aggregate
outstanding at any one time; (e) the issuance or sale of any Qualified Capital
Stock of the Company approved by a majority of the members of the Board of
Directors and, if any, a majority of the independent members of such Board of
Directors, (f) Restricted Payments and Investments permitted by the provisions
of Section 4.3 and (g) transactions between the Company and any owner of a
Special Purpose Licensed Entity
10
or between any Special Purpose Licensed Entity and any of its owners, in each
case, in the ordinary course of business to facilitate the operations of such
Special Purpose Licensed Entity.
"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date, reduced to the extent such amounts are repaid, refinanced or
retired.
"Florida Overpayment Dispute" means the third-party carrier review relating
to claims that the Company's Florida-based laboratory subsidiary submitted for
Medicare reimbursement, pursuant to which the carrier has suspended Medicare
payments and issued formal overpayment determinations.
"Foreign Subsidiary" means any Subsidiary of the Company which (i) is not
organized under the laws of the United States, any state thereof or the District
of Columbia and (ii) conducts substantially all of its business operations
outside the United States of America.
"GAAP" means United States generally accepted accounting principles as in
effect on the Issue Date as set forth in (1) the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants, (2) statements and pronouncements of the Financial Accounting
Standards Board, (3) such other statements by such other entity as approved by a
significant segment of the accounting profession in the United States and (4)
the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP.
"Global Notes" means one or more Notes in the form of Exhibit A hereto that
includes the information referred to in footnotes 3, 4 and 8 to the form of
Note, attached hereto as Exhibit A, issued under this Indenture, that is
deposited with or on behalf of and registered in the name of the Depositary or
its nominee.
"Global Note Legend" means the legend set forth in Section 2.6(g)(2), which
is required to be placed on all Global Notes issued under this Indenture.
"Goodwill Impairment Charges" means with respect to any Person, impairment
and valuation losses, as reflected on such Person's consolidated financial
statements.
"Guarantee" shall have the meaning provided in Section 11.1.
"Guarantor" means each of the Company's present and future Subsidiaries
(other than Non-Guarantor Subsidiaries and Foreign Subsidiaries) that at the
time are guarantors of the Notes in accordance with this Indenture.
11
"Holder" or "Securityholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" or "incur" shall have the meaning specified in Section 4.11.
"Incurrence Date" shall have the meaning specified in Section 4.11.
"Indebtedness" of any Person means, without duplication,
(a) all liabilities and obligations, contingent or otherwise, of such
Person, to the extent such liabilities and obligations would appear as a
liability upon the consolidated balance sheet of such Person in accordance with
GAAP, (1) in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), (2) evidenced by bonds, notes, debentures or similar instruments, (3)
representing the balance deferred and unpaid of the purchase price of any
property or services, except those incurred in the ordinary course of its
business that would constitute ordinarily a trade payable to trade creditors;
(b) all liabilities and obligations, contingent or otherwise, of such
Person (1) evidenced by bankers' acceptances or similar instruments issued or
accepted by banks, or (2) evidenced by a letter of credit or a reimbursement
obligation of such Person with respect to any letter of credit;
(c) all net obligations of such Person under Interest Swap and Hedging
Obligations;
(d) all Capitalized Lease Obligations and Attributable Indebtedness of such
Person;
(e) all liabilities and obligations of others of the kind described in the
preceding clause (a), (b) (c) or (d) to the extent that such Person has
guaranteed or provided credit support or that is otherwise its legal liability;
(f) all liabilities and obligations of others of the kind described in the
preceding clause (a), (b), (c), (d) or (e) secured by any Lien on any property
or assets of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured;
(g) any and all deferrals, renewals, extensions, refinancing and refundings
(whether direct or indirect) of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (a), (b),
(c), (d), (f), or this clause (g), whether or not between or among the same
parties; and
(h) all Disqualified Capital Stock of such Person (measured at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued and
unpaid dividends).
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms
12
of such Disqualified Capital Stock as if such Disqualified Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to the terms hereof, and if such price is based upon, or measured by,
the fair market value of such Disqualified Capital Stock, such fair market value
to be determined in good faith by the board of directors of the issuer (or
managing general partner of the issuer) of such Disqualified Capital Stock.
The amount of any Indebtedness outstanding as of any date shall be (1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, but the accretion of original issue discount in accordance with
the original terms of Indebtedness issued with an original issue discount will
not be deemed to be an incurrence and (2) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Indirect Participant" means any entity that, with respect to DTC, clears
through or maintains a direct or indirect, custodial relationship with a
Participant.
"Initial Purchasers" means Credit Suisse First Boston Corporation, Banc of
America Securities LLC, SunTrust Equitable Securities Corporation, BNY Capital
Markets, Inc. and Scotia Capital (USA) Inc.
"Initial Notes" means the 9 1/4% Series A Senior Subordinated Notes due
2011, as supplemented from time to time in accordance with the terms hereof,
issued under this Indenture that contain the information referred to in
footnotes 6 and 7 to the form of Note attached hereto as Exhibit A.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Interest Payment Date" means the stated due date of an installment of
interest on the Notes.
"Interest Swap and Hedging Obligation" means any obligation of any Person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such Person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such Person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any Person in any other Person means (without duplication):
13
(a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such Person (whether for cash, property, services, securities or
otherwise) of Equity Interests, capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other Person or any agreement to make any such
acquisition;
(b) the making by such Person of any deposit with, or advance, loan or
other extension of credit to, such other Person (including the purchase of
property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such other Person) or any
commitment to make any such advance, loan or extension (but excluding accounts
receivable, endorsements for collection or deposits arising in the ordinary
course of business);
(c) other than guarantees of Indebtedness of the Company or any Guarantor
to the extent permitted by Section 4.11, the entering into by such Person of any
guarantee of, or other credit support or contingent obligation with respect to,
Indebtedness or other liability of such other Person;
(d) the making of any capital contribution by such Person to such other
Person; and
(e) the designation by the Board of Directors of the Company of any Person
to be an Unrestricted Subsidiary.
The Company shall be deemed to make an Investment in an amount equal to the
fair market value of the net assets of any subsidiary (or, if neither the
Company nor any of its Subsidiaries has theretofore made an Investment in such
subsidiary, in an amount equal to the Investments being made), at the time that
such subsidiary is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from the Company or a Subsidiary of
the Company shall be deemed an Investment valued at its fair market value at the
time of such transfer. The Company or any of its Subsidiaries shall be deemed to
have made an Investment in a Person that is or was required to be a Guarantor
if, upon the issuance, sale or other disposition of any portion of the Company's
or the Subsidiary's ownership in the Capital Stock of such Person, such Person
ceases to be a Guarantor. The fair market value of each Investment shall be
measured at the time made or returned, as applicable.
"Issue Date" means the date of first issuance of the Notes under this
Indenture.
"Junior Security" means any Qualified Capital Stock and any Indebtedness of
the Company or a Guarantor, as applicable, that is contractually subordinated in
right of payment to Senior Debt at least to the same extent as the Notes or the
Guarantee, as applicable, and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Notes; provided, that in the case of subordination in respect of
Senior Debt under the Credit Agreement, "Junior Security" shall mean any
Qualified Capital Stock and any Indebtedness of the Company or a Guarantor, as
applicable, that:
14
(1) has a final maturity date occurring after the final maturity date of,
all Senior Debt outstanding under the Credit Agreement on the date of issuance
of such Qualified Capital Stock or Indebtedness,
(2) is unsecured,
(3) has an Average Life longer than the security for which such Qualified
Capital Stock or Indebtedness is being exchanged, and
(4) by their terms or by law are subordinated to Senior Debt outstanding
under the Credit Agreement on the date of issuance of such Qualified Capital
Stock or Indebtedness at least to the same extent as the Notes.
"Legal Defeasance" shall have the meaning specified in Section 8.2.
"Legal Holiday" shall have the meaning specified in Section 13.7.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"Liquidated Damages" means all liquidated damages then owing pursuant to
the Registration Rights Agreement.
"Maturity Date" means, when used with respect to any Note, the date
specified on such Note as the fixed date on which the final installment of
principal of such Note is due and payable (in the absence of any acceleration
thereof pursuant to the provisions of this Indenture regarding acceleration of
Indebtedness or any Change of Control Offer or Asset Sale Offer).
"Minority Interest" means, with respect to any Person, interests in income
of such Person's Consolidated Subsidiaries held by Persons other than such
Person or another Subsidiary of such Person, as reflected on such Person's
consolidated financial statements.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means the aggregate amount of cash or Cash Equivalents
received by the Company in the case of a sale of Qualified Capital Stock and by
the Company and its Subsidiaries in respect of an Asset Sale plus, in the case
of an issuance of Qualified Capital Stock upon any exercise, exchange or
conversion of securities (including options, warrants, rights and convertible or
exchangeable debt) of the Company that were issued for cash on or after the
Issue Date, the amount of cash originally received by the Company upon the
issuance of such securities (including options, warrants, rights and convertible
or exchangeable debt) less, (1) in each case, the sum of all payments, fees,
commissions and (in the case of Asset Sales, reasonable) expenses (including,
without limitation, the fees and expenses of legal counsel and investment
banking fees
15
and expenses) incurred in connection with such Asset Sale or sale of Qualified
Capital Stock, and (2) in the case of an Asset Sale only, less
(a) the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes required to be paid by the
Company or any of its respective Subsidiaries in connection with such Asset Sale
in the taxable year that such sale is consummated or in the immediately
succeeding taxable year (the "Asset Sale Tax Liability"), the computation of
which shall take into account (estimated reasonably and in good faith by the
Company) the reduction in tax liability resulting from any available operating
losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes ("Available Tax Attributes"). The
determination of the Available Tax Attributes shall be estimated reasonably and
in good faith by the Company and, in connection therewith, the Company may
exclude from its determination those Available Tax Attributes as to which there
exists an issue of law or fact which may ultimately result in such attributes
not being available to effectuate a reduction in the Asset Sale Tax Liability,
(b) amounts used to retire Indebtedness (other than Subordinated
Indebtedness) secured by the asset that was the subject of the Asset Sale,
(c) any distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Sale,
(d) appropriate amounts to be provided by the Company or any Subsidiary as
a reserve against any liabilities (other than tax liabilities) associated with
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP.
"Non-Guarantor Subsidiary" means each non-Wholly Owned Subsidiary of the
Company that is not a Foreign Subsidiary, provided, that
(a) any Equity Interest in such Subsidiary not owned by the Company or any
Guarantor is owned by a physician, physician group or other strategic joint
venture partner;
(b) such Subsidiary was formed to and exists solely for the purpose of
owning and operating one or more dialysis centers and providing services related
thereto; and
(c) on each date that a non-Wholly Owned Subsidiary is formed or a Wholly
Owned Subsidiary becomes a non-Wholly Owned Subsidiary, the Company's
Consolidated Minority Adjusted EBITDA Ratio for the Reference Period immediately
preceding such date would be at least 0.80 to 1.00, on a pro forma basis after
giving effect to such formation or transformation to a non-Wholly Owned
Subsidiary.
16
"Non-Recourse Indebtedness" means Indebtedness (a) as to which neither the
Company nor any of its Subsidiaries (1) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (2) is directly or indirectly liable (as a guarantor or
otherwise), or (3) constitutes the lender, and (b) 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 of the
Company or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Notes" means, collectively (i) the Initial Notes, (ii) the Exchange Notes,
when and if issued as provided in the Registration Rights Agreement, and (iii)
the Additional Notes.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to the Company or any Guarantor, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary of the Company or such
Guarantor.
"Officers' Certificate" means, with respect to the Company or any
Guarantor, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company or such Guarantor and otherwise complying
with the requirements of Sections 13.4 and 13.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.4 and 13.5. An Opinion of Counsel delivered hereunder may have qualifications
that are customary for the opinions of the type required.
"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 Depository Trust Company,
shall include Euroclear and Clearstream).
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Default" shall have the meaning specified in Section 12.2.
"Payment Notice" shall have the meaning specified in Section 12.2.
"Permitted Indebtedness" means that:
(a) the Company and the Guarantors may incur Indebtedness evidenced by
the Notes and the Guarantees issued pursuant to this Indenture up to the amounts
being issued on the original Issue Date, less any amounts repaid or retired;
17
(b) the Company and the Guarantors, as applicable, may incur
Refinancing Indebtedness with respect to any Existing Indebtedness or any
Indebtedness (including Disqualified Capital Stock) described in clause (a) of
this definition or incurred pursuant to the Debt Incurrence Ratio, or which was
refinanced pursuant to this clause (b);
(c) the Company and its Subsidiaries may incur Indebtedness solely in
respect of bankers' acceptances, performance bonds and letters of credit to the
extent not drawn upon (to the extent that such incurrence does not result in the
incurrence of any obligation to repay any obligation relating to borrowed money
or other Indebtedness), all in the ordinary course of business in accordance
with customary industry practices, in amounts and for the purposes customary in
the Company's industry; provided, that the aggregate principal amount
outstanding of such Indebtedness (including any Refinancing Indebtedness and any
other Indebtedness issued to retire, refinance, refund, defease or replace such
Indebtedness) shall at no time exceed $15,000,000;
(d) the Company may incur Indebtedness owed to (borrowed from) any
Subsidiary, and any Subsidiary may incur Indebtedness owed to (borrowed from)
any other Subsidiary or the Company; provided, that (i) the aggregate amount of
Indebtedness that may be incurred and outstanding at any one time (including any
Refinancing Indebtedness issued to retire, defease, refinance, replace or refund
such Indebtedness) pursuant to this clause (d) by Subsidiaries that are not
Guarantors shall not exceed $35,000,000, and (ii) in the case of Indebtedness of
the Company, such obligations shall be unsecured and contractually subordinated
in all respects to the Company's obligations pursuant to the Notes and any event
that causes any Guarantor no longer to be a Guarantor (including by designation
to be an Unrestricted Subsidiary) shall be deemed to be a new incurrence by such
issuer of such Indebtedness and any guarantor thereof subject to the provisions
of Section 4.11; and
(e) the Company and the Guarantors may incur Interest Swap and Hedging
Obligations that are incurred for the purpose of fixing or hedging interest rate
or currency risk with respect to any fixed or floating rate Indebtedness that is
permitted by this Indenture to be outstanding or any receivable or liability the
payment of which is determined by reference to a foreign currency (and not for
the purpose of speculation); provided, that the notional amount of any such
Interest Swap and Hedging Obligation does not exceed the principal amount of
Indebtedness to which such Interest Swap and Hedging Obligation relates.
"Permitted Investment" means:
(a) any Investment in any of the Notes;
(b) any Investment in Cash Equivalents;
(c) intercompany Indebtedness to the extent permitted under clause (d)
of the definition of "Permitted Indebtedness";
18
(d) any Investment in the Company or in a Guarantor, or by the Company
or any Guarantor in a Person in a Related Business if as a result of such
Investment such Person immediately becomes a Guarantor or a Non-Guarantor
Subsidiary or such Person is immediately merged with or into the Company or a
Guarantor;
(e) other Investments in any Person or Persons, provided, that after
giving pro forma effect to each such Investment, the aggregate amount of all
such Investments made on and after the Issue Date pursuant to this clause (e)
that are outstanding (after giving effect to any such Investments that are
returned to the Company or the Guarantor that made such prior Investment,
without restriction, in cash on or prior to the date of any such calculation,
but only up to the amount of the Investment made under this clause (e) in such
Person) at any time does not in the aggregate exceed $35,000,000 (measured by
the value attributed to the Investment at the time made or returned, as
applicable); and
(f) any asset exchange permitted under clause (7) of Section 4.14.
"Permitted Lien" means:
(a) Liens existing on the Issue Date;
(b) Liens imposed by governmental authorities for taxes, assessments
or other charges not yet subject to penalty or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the Company in accordance with GAAP;
(c) statutory liens of carriers, warehousemen, mechanics, material
men, landlords, repairmen or other like Liens arising by operation of law in the
ordinary course of business provided, that (1) the underlying obligations are
not overdue for a period of more than 60 days, or (2) such Liens are being
contested in good faith and by appropriate proceedings and adequate reserves
with respect thereto are maintained on the books of the Company in accordance
with GAAP;
(d) Liens securing the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, tenders, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) easements, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title defects which, singly or in the aggregate, do not
in any case materially detract from the value of the property, subject thereto
(as such property is used by the Company or any of its Subsidiaries) or
materially interfere with the ordinary conduct of the business of the Company or
any of its Subsidiaries;
(f) Liens arising from the rendering of a final judgment, only to the
extent, for an amount and for a period not resulting in an Event of Default with
respect thereto;
19
(g) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security legislation;
(h) Liens securing the Notes;
(i) Liens securing Indebtedness of a Person existing at the time such
Person becomes a Subsidiary or is merged with or into the Company or a
Subsidiary or Liens securing Indebtedness incurred in connection with an
Acquisition, provided, that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets;
(j) Liens arising from Capital Expenditure Indebtedness permitted to
be incurred pursuant to clause (a) of Section 4.11 provided such Liens relate
solely to the property which is subject to such Capital Expenditure Indebtedness
or the proceeds thereof;
(k) leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the business
of the Company or any of its Subsidiaries or materially detracting from the
value of the relative assets of the Company or any Subsidiary;
(l) Liens arising from precautionary Uniform Commercial Code financing
statement filings regarding operating leases entered into by the Company or any
of its Subsidiaries in the ordinary course of business;
(m) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness that was previously so secured in a manner no more adverse to the
Holders of the Notes than the terms of the Liens securing such refinanced
Indebtedness, and provided that the Indebtedness secured is not increased and
the Lien is not extended to any additional assets or property that would not
have been security for the Indebtedness refinanced;
(n) Liens securing Senior Debt of the Company or any Guarantor,
including Indebtedness incurred under the Credit Agreement in accordance with
the provisions of Section 4.11; and
(o) Liens securing reimbursement obligations with respect to letters
of credit that encumber only documents and other property relating to such
letters of credit and the products and proceeds thereof.
"Person" or "person" means any corporation, individual, limited liability
company joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state or political
subdivision thereof, trust, municipality or other entity.
"Preferred Stock" means any Equity Interest of any class or classes of a
Person (however designated) which is preferred as to payments of dividends, or
as to distributions upon any liquidation or dissolution, over Equity Interests
of any other class of such Person.
20
"Private Placement Legend" means the legend set forth in Section 2.6(g)(1)
to be placed on all Notes issued under this Indenture except where specifically
stated otherwise by the provisions of this Indenture.
"principal" of any Indebtedness means the principal of such Indebtedness.
"property" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible,
intangible, contingent, direct or indirect.
"Pro Forma" or "pro forma" shall have the meaning set forth in Regulation
S-X of the Securities Act, unless otherwise specifically stated herein.
"Public Equity Offering" means an underwritten public offering for cash
pursuant to a registration statement filed with the SEC in accordance with the
Securities Act of Qualified Capital Stock of the Company.
"Purchase Agreement" means the Purchase Agreement, dated April 6, 2001, by
and among the Company, the Guarantors and the Initial Purchasers, as such
agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Qualified Exchange" means:
(1) any legal defeasance, redemption, retirement, repurchase or
other acquisition of Capital Stock, or Indebtedness of the Company (other
than to a Subsidiary) with the Net Cash Proceeds received by the Company
from the substantially concurrent sale of its Qualified Capital Stock, or
(2) any issuance of Qualified Capital Stock of the Company in
exchange for any Capital Stock or Indebtedness of the Company.
"Record Date" means a Record Date specified in the Notes whether or not
such Record Date is a Business Day, or, if applicable, as specified in Section
2.12.
"Redemption Date," when used with respect to any Note to be redeemed, means
the date fixed for such redemption pursuant to Article III of this Indenture and
Section 5 in the form of Note attached hereto as Exhibit A.
"Redemption Price," when used with respect to any Note to be redeemed,
means the redemption price for such redemption pursuant to Section 5 in the form
of Note attached hereto as
21
Exhibit A, which shall include, without duplication, in each case, accrued and
unpaid interest and Liquidated Damages, if any, to the Redemption Date.
"Reference Period" with regard to any Person means the four full fiscal
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Notes or this Indenture.
"Refinancing Indebtedness" means Indebtedness (including Disqualified
Capital Stock) (a) issued in exchange for, or the proceeds from the issuance and
sale of which are used substantially concurrently to repay, redeem, defease,
refund, refinance, discharge or otherwise retire for value, in whole or in part,
or (b) constituting an amendment, modification or supplement to, or a deferral
or renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness (including Disqualified Capital Stock) in a principal amount or, in
the case of Disqualified Capital Stock, liquidation preference, not to exceed
(after deduction of reasonable fees and expenses incurred in connection with the
Refinancing plus the amount of any premium paid in connection with such
Refinancing in accordance with the terms of the documents governing the
Indebtedness refinanced without giving effect to any modification thereof made
in connection with or in contemplation of such refinancing) the lesser of (1)
the principal amount or, in the case of Disqualified Capital Stock, liquidation
preference, of the Indebtedness (including Disqualified Capital Stock) so
Refinanced and (2) if such Indebtedness being Refinanced was issued with an
original issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing; provided, that (A) such Refinancing
Indebtedness is incurred by the Company or by the Subsidiary who is the obligor
on the Indebtedness being refinanced, (B) such Refinancing Indebtedness shall
(x) not have an Average Life shorter than the Indebtedness (including
Disqualified Capital Stock) to be so refinanced at the time of such Refinancing
and (y) in all respects, be no less contractually subordinated or junior, if
applicable, to the rights of Holders of the Notes than was the Indebtedness
(including Disqualified Capital Stock) to be refinanced, (C) such Refinancing
Indebtedness shall have a final stated maturity or redemption date, as
applicable, no earlier than the final stated maturity or redemption date, as
applicable, of the Indebtedness (including Disqualified Capital Stock) to be so
refinanced or, if sooner, 91 days after the Stated Maturity of the Notes, and
(D) such Refinancing Indebtedness shall be secured (if secured) in a manner no
more adverse to the Holders of the Notes than the terms of the Liens (if any)
securing such refinanced Indebtedness, including, without limitation, the amount
of Indebtedness secured shall not be increased.
"Reg S Permanent Global Note" means one or more permanent Global Notes
bearing the Private Placement Legend, that will be issued in an aggregate amount
of denominations equal in total to the outstanding principal amount of the Reg S
Temporary Global Note upon expiration of the Distribution Compliance Period.
"Reg S Temporary Global Note" means one or more temporary Global Notes
bearing the Private Placement Legend and the Reg S Temporary Global Note Legend,
issued in an aggregate amount of denominations equal in total to the outstanding
principal amount of the Notes initially sold in reliance on Rule 903 of
Regulation S.
22
"Reg S Temporary Global Note Legend" means the legend set forth in Section
2.6(g)(iii), which is required to be placed on all Reg S Temporary Global Notes
issued under this Indenture.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Company and the other parties named
on the signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act, as
it may be amended from time to time, and any successor provision thereto.
"Regulation S Global Note" means a Reg S Temporary Global Note or a Reg S
Permanent Global Note, as the case may be.
"Related Business" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are related businesses.
"Restricted Definitive Note" means one or more Definitive Notes bearing the
Private Placement Legend, issued under this Indenture.
"Restricted Global Note" means one or more Global Notes bearing the Private
Placement Legend, issued under this Indenture; provided, that in no case shall
an Exchange Note issued in accordance with this Indenture and the terms of the
Registration Rights Agreement be a Restricted Global Note.
"Restricted Investment" means, in one or a series of related transactions,
any Investment, other than Permitted Investments.
"Restricted Note" means a Note, unless or until it has been (i) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering it or (ii) distributed to the public pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act;
provided, that in no case shall an Exchange Note issued in accordance with this
Indenture and the terms and provisions of the Registration Rights Agreement be a
Restricted Note.
"Restricted Payment" means, with respect to any Person:
(a) the declaration or payment of any dividend or other distribution
in respect of Equity Interests of such Person or any parent of such Person,
(b) any payment (except to the extent with Qualified Capital Stock)
on account of the purchase, redemption or other acquisition or retirement for
value of Equity Interests of such Person or any or parent of such Person,
23
(c) other than with the proceeds from the substantially concurrent
sale of, or in exchange for, Refinancing Indebtedness, any purchase, redemption,
or other acquisition or retirement for value of, any payment in respect of any
amendment of the terms of or any defeasance of, any Subordinated Indebtedness,
directly or indirectly, by such Person or a parent or Subsidiary of such Person
prior to the scheduled maturity, any scheduled repayment of principal, or
scheduled sinking fund payment, as the case may be, of such Indebtedness and
(d) any Restricted Investment by such Person;
provided, however, that the term "Restricted Payment" does not include (1) any
dividend, distribution or other payment on or with respect to Equity Interests
of an issuer to the extent payable solely in shares of Qualified Capital Stock
of such issuer, or (2) any dividend, distribution or other payment to the
Company, or to any Guarantors, by any Subsidiary of the Company.
"Rule 144A" means Rule 144A promulgated under the Securities Act, as it may
be amended from time to time, and any successor provision thereto.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, and
its successors.
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing (other than operating leases in the ordinary course of
business) by the Company or any Subsidiary of any real or tangible personal
property owned by the Company or a Subsidiary of the Company as of the Issue
Date or thereafter acquired, which property has been or is to be sold or
transferred by the Company or such Subsidiary to a Person and leased back from
such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Securityholder" or "Holder" means the Person in whose name a Note is
registered on the Registrar's books.
"Senior Debt" of the Company or any Guarantor means Indebtedness (including
any monetary obligation in respect of the Credit Agreement, and interest,
whether or not allowable, accruing on Indebtedness incurred pursuant to the
Credit Agreement after the filing of a petition initiating any proceeding under
any bankruptcy, insolvency or similar law) of the Company or such Guarantor,
including Indebtedness arising under the Credit Agreement, unless by the terms
of the instrument creating or evidencing such Indebtedness, such Indebtedness is
expressly designated equal or junior in right of payment to the Notes or the
applicable Guarantee; provided, that in no
24
event shall Senior Debt include (a) Indebtedness to any Subsidiary of the
Company or any officer, director or employee of the Company or any Subsidiary of
the Company, (b) Indebtedness incurred in violation of the terms of this
Indenture, (c) Indebtedness to trade creditors, (d) Disqualified Capital Stock,
and (e) any liability for taxes owed or owing by the Company or such Guarantor.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" shall have the meaning provided under Regulation
S-X of the Securities Act, as in effect on the Issue Date.
"Special Purpose Licensed Entity" means any Person in a Related Business
that (i) the Company and its Subsidiaries are prohibited from engaging in
directly under applicable law, including provisions of state law (a) prohibiting
the ownership of healthcare facilities by public companies, (b) prohibiting the
corporate practice of medicine or (c) otherwise restricting the ability of the
Company or one of its Subsidiaries to acquire directly a required license to
operate a healthcare facility, and (ii) has entered into a transaction or series
of transactions with the Company or any of its Subsidiaries under which
(x) the Company or any of its Subsidiaries provides management,
administrative or consulting services to the Special Purpose Licensed Entity,
(y) the owners of the Special Purpose Licensed Entity are prohibited
from transferring any of their interests in the Special Purpose Licensed Entity
without the consent of the Company or one of its Subsidiaries, and
(z) the Company or one of its Subsidiaries has the right to require
the owners of the Special Purpose Licensed Entity to transfer all of their
interests in the Special Purpose Licensed Entity to a Person designated by the
Company or one of its Subsidiaries.
"Special Record Date" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Note, means April 15,
2011.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment by its terms or the terms of
any document or instrument relating thereto ("contractually") to the Notes or
such Guarantee, as applicable, in any respect.
"Subsidiary," with respect to any Person, means (1) a corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, (2) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person, or
such Person and one or more
25
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof has a majority ownership interest, or (3) a partnership in
which such Person or a Subsidiary of such Person is, at the time, a general
partner. Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be
a Subsidiary of the Company or of any Subsidiary of the Company and any Special
Purpose Licensed Entity shall be considered a Subsidiary of the Company. Unless
the context requires otherwise, Subsidiary means each direct and indirect
Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture, except as provided in Section 9.3.
"Transfer Restricted Notes" means Global Notes and Definitive Notes that
bear or are required to bear the Private Placement Legend, issued under this
Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Trust Officer" means any officer within the corporate trust division (or
any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the Persons who
at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend, issued under
this Indenture.
"Unrestricted Global Note" means one or more permanent Global Notes
representing a series of Notes that does not bear and is not required to bear
the Private Placement Legend, issued under this Indenture.
"Unrestricted Subsidiary" means any subsidiary of the Company that does not
own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided, that such Subsidiary at the time of such
designation (a) has no Indebtedness other than Non-Recourse Indebtedness; (b) is
not party to any agreement, contract, arrangement or understanding with the
Company or any Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company; (c) is a Person with respect to which neither
the Company nor any of its Subsidiaries has any direct or indirect obligation
(x) to subscribe for additional Equity Interests or (y) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Subsidiaries. The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Subsidiary, provided, that (1) no
Default or Event of Default is existing or will
26
occur as a consequence thereof and (2) immediately after giving effect to such
designation, on a pro forma basis, the Company could incur at least $1.00 of
Indebtedness pursuant to the Debt Incurrence Ratio. Each such designation shall
be evidenced by filing with the Trustee a certified copy of the resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions. Any subsidiary of an
Unrestricted Subsidiary must also be an Unrestricted Subsidiary.
"U.S. Government Obligations" means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"Voting Equity Interests" means Equity Interests which at the time are
entitled to vote in the election of, as applicable, directors, members or
partners generally.
"Wholly Owned Subsidiary" means a Subsidiary all the Equity Interests of
which (other than directors' qualifying Shares) are owned by the Company or one
or more Wholly Owned Subsidiaries of the Company or a combination thereof.
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, each
Guarantor and any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. RULES OF CONSTRUCTION
Unless the context otherwise requires:
27
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM AND DATING
(a) General. The Notes and the Trustee's certificate of
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authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or 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 $1,000 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.
(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). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without 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
28
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
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.6 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions
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of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream in effect at the relevant time
shall be applicable to transfers of beneficial interests in the Regulation S
Global Notes that are held by Participants through Euroclear or Clearstream
Bank.
SECTION 2.2. EXECUTION AND AUTHENTICATION
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. In the case of Definitive Notes, such signatures may be
imprinted or otherwise reproduced on such Notes. 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 written order of the Company signed by an Officer (an
"Authentication Order"), authenticate Notes for issuance up to the aggregate
principal amount stated in such Authentication Order; provided that Notes
authenticated for issuance on the Issue Date shall not exceed $225,000,000 in
aggregate principal amount. The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An authenticating agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company.
SECTION 2.3. REGISTRAR, PAYING AGENT AND DEPOSITARY
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, 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 Notes Custodian with respect to the Global Notes.
29
SECTION 2.4. 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, premium or Liquidated Damages, if any, 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 2.5. 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, or shall cause the Registrar (if other
than the Company) to 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 reasonably
require of the names and addresses of the Holders of Notes and the Company shall
otherwise comply with TIA ss.312(a).
SECTION 2.6. TRANSFER AND EXCHANGE
(a) Transfer and Exchange of Global Notes. A Global Note may not be
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transferred as a whole except 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. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that (x) the Depositary is unwilling or unable to
continue to act as Depositary for the Global Notes and the Company thereupon
fails to appoint a successor Depositary within 90 days or (y) the Depositary is
no longer a clearing agency registered under the Exchange Act, (ii) the Company
in its sole discretion determines that the Global Notes (in whole but not in
part) should be exchanged for Definitive Notes and delivers a written notice to
such effect to the Trustee or (iii) upon request of the Trustee or Holders of a
majority of the aggregate principal amount of outstanding Notes if there shall
have occurred and be continuing a Default or Event of Default with respect to
the Notes; provided that in no event shall the Reg S Temporary Global Note be
exchanged by the Company for Definitive Notes prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificate identified by the Company and its counsel to be required pursuant to
Rule 903 or Rule 904 under the Securities Act. Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or
30
replaced, in whole or in part, as provided in Sections 2.7 and 2.10 hereof.
Every Note authenticated and delivered in exchange for, or in lieu of, a Global
Note or any portion thereof, pursuant to this Section 2.6 or Section 2.7 or 2.10
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.6(a), however, beneficial interests in a Global Note
may be transferred and exchanged as provided in Section 2.6(b), (c) or (f)
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. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
--------------------------------------------------------
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Distribution Compliance Period,
transfers of beneficial interests in the Reg S Temporary Global Note may
not be made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchasers). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section
2.6(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in
------------------------------------------------------------
Global Notes. In connection with all transfers and exchanges of beneficial
------------
interests that are not subject to Section 2.6(b)(1) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) an
order from a Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) an order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or exchange
referred to in (B)(1) above; provided, that in no event shall Definitive
Notes be issued upon the transfer or exchange of beneficial interests in
the Reg S Temporary Global Note prior to (x) the expiration of the
Distribution
31
Compliance Period and (y) the receipt by the Registrar of any certificates
identified by the Company or its counsel to be required pursuant to Rule
903 and Rule 904 under the Securities Act. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.6(f) hereof, the
requirements of this Section 2.6(b)(2) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.6(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted
------------------------------------------------------
Global Note. A beneficial interest in any Restricted Global Note may be
-----------
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.6(b)(2) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the
form of a beneficial interest in the 144A Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1)
thereof; and
(B) if the transferee will take delivery in the
form of a beneficial interest in the Reg S Temporary Global
Note or the Reg S Permanent Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.
(4) Transfer and Exchange of Beneficial Interests in a
--------------------------------------------------
Restricted Global Note for Beneficial Interests in an Unrestricted Global
-------------------------------------------------------------------------
Note. A beneficial interest in any Restricted Global Note may be exchanged
----
by any holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.6(b)(2) above and:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration
Rights Agreement and Section 2.6(f) hereof, and the holder
of the beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
32
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the holder
of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (1)(a)
thereof; or (2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and, in each such case set forth
in this subparagraph (D), an Opinion of Counsel in form, and from
legal counsel, reasonably acceptable to the Registrar and the Company
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above. Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes
-----------------------------------------------------------------
(1) Beneficial Interests in Restricted Global Notes to
--------------------------------------------------
Restricted Definitive Notes. If any holder of a beneficial interest in a
- ---------------------------
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
33
for a Restricted Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, the Trustee shall authenticate and deliver or
cause to be delivered to the Person designated in the instructions a Restricted
Definitive Note in the appropriate principal amount. Any Restricted Definitive
Note issued in exchange for a beneficial
34
interest in a Restricted Global Note pursuant to this Section 2.6(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver or cause to be delivered such
Restricted Definitive Notes to the Persons in whose names such Notes are so
registered. Any Restricted Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.6(c)(1) shall
bear the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to
--------------------------------------------------
Unrestricted Definitive Notes. A holder of a beneficial interest in a
-----------------------------
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and Section 2.6(f) hereof, and the holder of such beneficial interest,
in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the holder
of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive Note that does not
bear the Private Placement Legend, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(1)(b) thereof; or (2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and, in each such
case set forth in this subparagraph (D), an Opinion of Counsel
35
in form, and from legal counsel, reasonably acceptable to the
Registrar and the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Beneficial Interests in Unrestricted Global Notes to
----------------------------------------------------
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
-----------------------------
Unrestricted Global Note proposes to exchange such beneficial interest for
an Unrestricted Definitive Note or to transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note, then, upon satisfaction of the conditions set forth in
Section 2.6(b)(2) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Unrestricted Global Note to be reduced accordingly
pursuant to Section 2.6(h) hereof, and the Company shall execute and, upon
receipt of an Authentication Order pursuant to Section 2.2, the Trustee
shall authenticate and deliver to the Person designated in the instructions
an Unrestricted Definitive Note in the appropriate principal amount. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.6(c)(3) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Unrestricted Definitive Notes to the Persons in
whose names such Notes are so registered. Any Unrestricted Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.6(c)(3) shall not bear the Private Placement Legend.
(4) Transfer or Exchange of Reg S Temporary Global Notes.
----------------------------------------------------
Notwithstanding the other provisions of this Section 2.6, a beneficial
interest in the Reg S Temporary Global Note may not be (A) exchanged for a
Definitive Note prior to (x) the expiration of the Distribution Compliance
Period (unless such exchange is effected by the Company, does not require
an investment decision on the part of the holder thereof and does not
violate the provisions of Regulation S) and (y) the receipt by the
Registrar of any certificates identified by the Company or its counsel to
be required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act or
(B) transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the events set forth in clause (A) above or unless
the transfer is pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 903 or Rule 904.
(d) Transfer and Exchange of Definitive Notes for Beneficial
--------------------------------------------------------
Interests.
---------
(1) Restricted Definitive Notes to Beneficial Interests in
------------------------------------------------------
Restricted Global Notes. If any Holder of a Restricted Definitive Note
-----------------------
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
36
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (2) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, and in the case of clause (C) above, the Regulation S Global
Note.
(2) Restricted Definitive Notes to Beneficial Interests in
------------------------------------------------------
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
-------------------------
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and Section 2.6(f) hereof, and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Broker-Dealer,
(2) a Person participating in the distribution of the Exchange Notes
or (3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
37
(D) the Registrar receives the following: (1) if the Holder
of such Restricted Definitive Notes proposes to exchange such Notes
for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or (2) if the
Holder of such Restricted Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and, in each such case set forth
in this subparagraph (D), an Opinion of Counsel in form, and from
legal counsel, reasonably acceptable to the Registrar and the Company
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act. Upon satisfaction of the
conditions of any of the subparagraphs in this Section 2.6(d)(2), the
Trustee shall cancel the Restricted Definitive Notes so transferred or
exchanged and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
--------------------------------------------------------
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
-------------------------
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes. If any such exchange or transfer from a
Definitive Note to a beneficial interest is effected pursuant to
subparagraphs (2)(B), (2)(D) or (3) of this Section 2.6(d) at a time when
an Unrestricted Global Note has not yet been issued, the Company shall
issue and, upon receipt of an Authentication Order in accordance with
Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount
of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
--------------------------------------------------------------
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.6(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.6(e).
38
(1) Restricted Definitive Notes to Restricted Definitive Notes.
----------------------------------------------------------
Any Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes.
-------------------------------------------------------------
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and Section 2.6(f) hereof, and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Broker-Dealer,
(2) a Person participating in the distribution of the Exchange Notes
or (3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the Holder
of such Restricted Definitive Notes proposes to exchange such
39
Notes for an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications
in item (1)(d) thereof; or (2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and, in each such
case set forth in this subparagraph (D), an Opinion of Counsel in
form, and from legal counsel, reasonably acceptable to the Registrar
and the Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
--------------------------------------------------------
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to
-----
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
--------------
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.2 and an
Opinion of Counsel for the Company as to certain matters discussed in this
Section 2.6(f), the Trustee shall authenticate (i) one or more Unrestricted
Global Notes in an aggregate principal amount equal to the sum of (A) the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not Broker-Dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Exchange
Offer and (B) the principal amount of Definitive Notes exchanged or transferred
for beneficial interests in Unrestricted Global Notes in connection with the
Exchange Offer pursuant to Section 2.6(d)(2) and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer (other than
Definitive Notes described in clause (i)(B) immediately above). Concurrently
with the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and, upon receipt of an Authentication Order pursuant
to Section 2.2, the Trustee shall authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Definitive Notes in
the appropriate principal amount.
The Opinion of Counsel for the Company referenced above shall state
that:
(A) the issuance and sale of the Exchange Notes by the
Company have been duly authorized and, when executed and authenticated
in accordance with the provisions of this Indenture and
40
delivered in exchange for Series A Notes in accordance with this
Indenture and the Exchange Offer, will be entitled to the benefits of
this Indenture and will be valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms except as the enforceability thereof may be limited by (x)
bankruptcy, fraudulent transfer, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
(y) equitable principles of general applicability (regardless of
whether enforceability is considered at equity or in law); and
(B) when the Exchange Notes are executed and authenticated in
accordance with the provisions of this Indenture and delivered in
exchange for Series A Notes in accordance with this Indenture and the
Exchange Offer, the Guarantees by the Guarantors endorsed thereon will
be entitled to the benefits of this Indenture and will be valid and
binding obligations of the Guarantors, enforceable against the
Guarantors in accordance with their terms except as the enforceability
thereof may be limited by (x) bankruptcy, fraudulent transfer,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (y) equitable principles of general
applicability (regardless of whether enforceability is considered at
equity or in law).
(g) Legends. The following legends shall appear on the face of all
-------
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
------------------------
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER."
41
"THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE AND, IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
OF CASES (1) THROUGH (5) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4), (c)(2),
(c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) to this Section 2.6
(and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(2) Global Note Legend. To the extent required by the
------------------
Depositary, each Global Note shall bear legends in substantially the
following forms:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
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"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN."
(3) Reg S Temporary Global Note Legend. To the extent
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required by the Depositary, each Reg S Temporary Global Note shall bear
a legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST
DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS
LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE."
(h) Cancellation and/or Adjustment of Global Notes. At such time
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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 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 may 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 may be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
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(i) General Provisions Relating to Transfers and Exchanges.
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(1) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order.
(2) 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, 3.7, 4.14 and 10.1 hereof).
(3) 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.
(4) 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
Indebtedness, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(5) The Company and 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 3.3 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.
(6) 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.
(7) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.2 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.6 to
effect a registration of transfer or exchange may be submitted by
facsimile.
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Notwithstanding anything herein to the contrary, as to any
certifications and certificates delivered to the Registrar pursuant to this
Section 2.6, the Registrar's duties shall be limited to confirming that any such
certifications and certificates delivered to it are in the form of Exhibits B, C
and D attached hereto. The Registrar shall not be responsible for confirming the
truth or accuracy of representations made in any such certifications or
certificates.
SECTION 2.7. REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee and the Company receive evidence (which evidence may be from the
Trustee) to their satisfaction of the destruction, loss or theft of any Note and
if the requirements of Section 8-405 of the New York Uniform Commercial Code are
met, the Company shall issue and the Trustee, upon receipt of an Authentication
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. 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.
SECTION 2.8. OUTSTANDING NOTES
The Notes outstanding at any time are all the Notes authenticated by
the Trustee (including any Note represented by a Global Note) except for those
cancelled by it or at its direction, 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 as
not outstanding. Except as set forth in Section 2.9 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note. If a Note is replaced pursuant to Section 2.7 hereof, such Note,
together with the Guarantee of that particular Note endorsed thereon, 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 4.1 hereof, it ceases to be outstanding
and interest on it ceases to accrue. If the Paying Agent (other than the
Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption
date or the 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 2.9. 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.
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SECTION 2.10. TEMPORARY NOTES
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall 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, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else shall
cancel 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
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date plus, to the extent lawful,
any interest payable on the defaulted interest at the rate and in the manner
provided in Section 4.1 hereof and in the Note (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee and the Paying Agent in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Paying Agent an amount of cash equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements reasonably satisfactory to the Paying Agent for such deposit
prior to the date of the proposed payment, such cash when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this clause (1). Thereupon the Paying Agent shall
fix a "Special Record Date" for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the
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Paying Agent of the notice of the proposed payment. The Paying Agent shall
promptly notify the Company and the Trustee of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note register maintained by the Registrar not
less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the persons in whose names the Notes (or their respective predecessor
Notes) are registered on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee and the Paying Agent of the proposed payment pursuant to
this clause, such manner shall be deemed practicable by the Trustee and the
Paying Agent.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
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
of redemption as a convenience to Holders; provided, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption 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.
ARTICLE III
REDEMPTION
SECTION 2.1. OPTIONAL REDEMPTION
(a) Except as set forth in clause (b) of this Section 3.1, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.1 prior
to April 15, 2006. The Notes will be redeemable for cash at the option of the
Company, in whole or in part, at any time on or after April 15, 2006, upon not
less than 30 days nor more than 60 days prior notice mailed by first class mail
to each Holder at its last registered address, at the following redemption
prices (expressed as
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percentages of the principal amount) if redeemed during the 12-month period
commencing April 15, of the years indicated below, in each case (subject to the
right of Holders of record on a Record Date to receive the corresponding
interest due (and the corresponding Liquidated Damages, if any) on the
corresponding Interest Payment Date that is on or prior to such Redemption Date)
together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the Redemption Date:
Year Percentage
---- ----------
2006................................ 104.625%
2007................................ 103.083%
2008................................ 101.542%
2009 and thereafter................. 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.1,
at any time on or prior to April 15, 2004, upon any Public Equity Offering, up
to 35% of the aggregate principal amount of the Notes issued pursuant to this
Indenture may be redeemed at the option of the Company within 90 days of such
Public Equity Offering, on not less than 30 days, but not more than 60 days,
prior notice to each Holder of the Notes to be redeemed, with cash from the Net
Cash Proceeds of such Public Equity Offering, at a redemption price equal to
109.25% of the principal amount thereof (subject to the right of Holders of
record on a Record Date to receive the corresponding interest (and the
corresponding Liquidated Damages, if any) due on the Interest Payment Date that
is on or prior to such Redemption Date) together with accrued and unpaid
interest and Liquidated Damages, if any, thereon to the Redemption Date;
provided that immediately following such redemption not less than 65% of the
aggregate principal amount of the Notes originally issued pursuant to this
Indenture remain outstanding.
(c) Any redemption pursuant to this Section 3.1 shall be made pursuant
to the provisions of Sections 3.2 through 3.7 hereof.
SECTION 3.2. NOTICES TO TRUSTEE
If the Company elects to redeem Notes pursuant to Section 5 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of Notes to be redeemed and whether it
wants the Paying Agent to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Notes to be
redeemed pursuant to Section 5 of the Notes by crediting against any such
redemption Notes it has not previously delivered to the Trustee and the Paying
Agent for cancellation, it shall so notify the Trustee, in the form of an
Officers' Certificate, and the Paying Agent of the amount of the reduction and
deliver such Notes with such notice.
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The Company shall give each notice to the Trustee and the Paying Agent
provided for in this Section 3.2 at least 45, but not more than 75, days before
the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee and the Paying Agent). Any such notice may be cancelled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
SECTION 3.3. SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes or portions thereof to be redeemed 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.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company and
the Paying Agent 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 in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Notes that have denominations larger than
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.4. NOTICE OF REDEMPTION
At least 30 days, but not more than 60 days prior to the Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee, the Paying Agent and each Holder whose Notes are to be
redeemed. At the Company's request, the Paying Agent shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including accrued and unpaid interest
and Liquidated Damages, if any, to be paid upon such redemption;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) that, unless (a) the Company defaults in its obligation to
deposit with the Paying Agent cash which through the scheduled payment of
principal and interest (and Liquidated Damages, if any) in respect thereof
in accordance with their terms shall provide
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the amount to fund the Redemption Price in accordance with Section 3.6
hereof or (b) such redemption payment is prohibited, interest (and
Liquidated Damages, if any) on Notes called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the
Holders of such Notes is to receive payment of the Redemption Price,
including accrued and unpaid interest (and Liquidated Damages, if any) to
the Redemption Date, upon surrender to the Paying Agent of the Notes called
for redemption and to be redeemed;
(6) if any Note is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple thereof, of such
Note to be redeemed and that, after the Redemption Date, and upon surrender
of such Note, a new Note or Notes in aggregate principal amount equal to
the unredeemed portion thereof shall be issued;
(7) if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of such Notes to be redeemed and
the aggregate principal amount of Notes to be outstanding after such
partial redemption;
(8) the CUSIP number of the Notes to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4
and pursuant to the optional redemption provisions of Section 5 of the
Notes.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section 3.4
hereof, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price, including accrued and unpaid interest (and
Liquidated Damages, if any) to the Redemption Date. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price, including interest and Liquidated Damages, if any, accrued and
unpaid to the Redemption Date; provided, that if the Redemption Date is on or
after an interest Record Date on which the Holders of record have a right to
receive the corresponding interest due, and Liquidated Damages, if any, and on
or before the associated Interest Payment Date, any accrued and unpaid interest
and Liquidated Damages, if any, due on such Interest Payment Date shall be paid
to the Person in whose name a Note is registered at the close of business on
such Record Date on the corresponding Interest Payment Date; and provided,
further, that if a Redemption Date is a Legal Holiday, payment shall be made on
the next succeeding Business Day and no interest (or Liquidated Damages, if any)
shall accrue for the period from such Redemption Date to such succeeding
Business Day.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE
Prior to 10:00 a.m. New York City time on the Redemption Date, the
Company shall deposit with the Paying Agent (which may not for purposes of this
Section 3.6, notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) cash
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sufficient to pay the Redemption Price of all Notes to be redeemed on such
Redemption Date (other than Notes or portions thereof called for redemption on
that date that have been delivered by the Company to the Trustee for
cancellation). The Paying Agent shall promptly return to the Company any cash so
deposited (together with all money earned on funds so held in trust, if
applicable) which is not required for that purpose upon the written request of
the Company.
If the Company complies with the preceding paragraph and payment of
the Notes called for redemption is not prohibited for any reason, interest (and
Liquidated Damages, if any) on the Notes to be redeemed shall cease to accrue on
the applicable Redemption Date, whether or not such Notes are presented for
payment. Notwithstanding anything herein to the contrary, if any Note
surrendered for redemption in the manner provided in the Notes shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest (and Liquidated Damages, if any)
shall continue to accrue and be paid from the Redemption Date until such payment
is made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 hereof and the Note.
SECTION 3.7. NOTES REDEEMED IN PART
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder,
without service charge to the Holder, a new Note or Notes equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.8. NO MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption
payments with respect to the Notes. The Notes shall not have the benefit of any
sinking fund.
ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF NOTES
The Company shall pay the principal of and interest (and Liquidated
Damages, if any) on the Notes on the dates and in the manner provided herein and
in the Notes. An installment of principal of or interest (or Liquidated Damages,
if any) on the Notes shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company or an Affiliate of the Company)
holds for the benefit of the Holders (on or before 10:00 a.m. New York City time
to the extent necessary to provide the funds to the Depositary in accordance
with the Depositary's procedures) on that date cash deposited and designated for
and sufficient to pay the installment.
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The Company shall pay interest on overdue principal and on overdue
installments of interest (and Liquidated Damages, if any) at the rate specified
in the Notes compounded semi-annually, to the extent lawful.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Notes and this Indenture may be
served. The Company and the Guarantors shall give prompt written notice to the
Trustee and the Paying Agent of the location, and any change in the location, of
such office or agency. If at any time the Company and the Guarantors shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee and the Paying Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.2 hereof.
The Company and the Guarantors 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 and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee and the Paying Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby initially designates the Corporate Trust Office of the Trustee as
such office.
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS
The Company and the Guarantors shall not, and neither the Company nor
the Guarantors shall permit any of their respective Subsidiaries to, directly or
indirectly, make any Restricted Payment if, after giving effect to such
Restricted Payment on a pro forma basis:
(1) a Default or an Event of Default shall have occurred and be
continuing,
(2) the Company is not permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt Incurrence Ratio, or
(3) the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries, including after giving effect to such
proposed Restricted Payment, on and after the Issue Date, would exceed,
without duplication, the sum of:
(a) $25,000,000, plus
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(b) 50% of the Company's aggregate Consolidated Net Income
for the period (taken as one accounting period), commencing on the first day of
the fiscal quarter including the Issue Date, to and including the last day of
the fiscal quarter ended immediately prior to the date of each such calculation
for which the Company's consolidated financial statements are required to be
delivered to the Trustee or, if sooner, filed with the SEC (or, in the event
Consolidated Net Income for such period is a deficit, then minus 100% of such
deficit), plus
(c) the aggregate Net Cash Proceeds received by the Company
from the sale of its Qualified Capital Stock (other than (i) to one of the
Company's Subsidiaries and (ii) to the extent applied in connection with a
Qualified Exchange or a Permitted Investment pursuant to clause (f) thereof or,
to avoid duplication, otherwise given credit for in any provision of the
following paragraph), after the Issue Date, plus
(d) except in each case, in order to avoid duplication, to
the extent any such payment or proceeds have been included in the calculation of
Consolidated Net Income, an amount equal to the net reduction in Investments
(other than returns of or from Permitted Investments) in any Person resulting
from distributions on or repayments of any Investments, including payments of
interest on Indebtedness, dividends, repayments of loans or advances, or other
distributions or other transfers of assets, in each case to the Company or any
Subsidiary of the Company or from the Net Cash Proceeds from the sale of any
such Investment or from redesignations of Unrestricted Subsidiaries as
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Subsidiary in such Person, including, if
applicable, such Unrestricted Subsidiary, less the cost of disposition.
The foregoing clauses (2) and (3) of the immediately preceding
paragraph, however, shall not prohibit:
(v) Restricted Payments in an amount not to exceed
$25,000,000 in the aggregate (exclusive of any accrued and unpaid interest
payable in connection with repurchases of Subordinated Indebtedness) consisting
solely of repurchases of the Company's Capital Stock and the Company's
Subordinated Indebtedness on and after the Issue Date,
(w) in addition to the amounts permitted under clause (v)
above, Restricted Payments in an amount not to exceed $50,000,000 in the
aggregate (excluding accrued and unpaid interest) consisting solely of
repurchases of the Company's Capital Stock and the Company's Subordinated
Indebtedness on and after the Issue Date, provided, that, after giving effect to
any such repurchase on a pro forma basis, on the date of any such repurchase,
the Company's Consolidated Coverage Ratio for the Reference Period immediately
preceding the date of repurchase would be at least 3.25 to 1.0,
and the provisions of the immediately preceding paragraph will not prohibit,
53
(x) any dividend, distribution or other payments by any of
the Company's Subsidiaries on its Equ Equity Interests that is paid pro rata to
all holders of such Equity Interests,ity Interests that is paid pro rata to all
holders of such Equity Interests,
(y) a Qualified Exchange, or
(z) the payment of any dividend on Qualified Capital Stock
within 60 days after the date of its declaration if such dividend could have
been made on the date of such declaration in compliance with the foregoing
provisions.
The full amount of any Restricted Payment made pursuant to the
foregoing clauses (x) and (z) (but not pursuant to clause (v) or (w) or (y)) of
the immediately preceding sentence, however, will be counted as Restricted
Payments made for purposes of the calculation of the aggregate amount of
Restricted Payments available to be made referred to in clause (3) of the first
paragraph under this Section 4.3.
For purposes of this Section 4.3, the amount of any Restricted Payment
made or returned, if other than in cash, shall be the fair market value thereof,
as determined in the good faith reasonable judgment of the Company's Board of
Directors, unless stated otherwise, at the time made or returned, as applicable.
Additionally, (a) concurrently with each Restricted Payment in excess of
$10,000,000 and (b) on February 15 of each year (or if such day is not a
Business Day, the next succeeding Business Day) with respect to all Restricted
Payments made during the preceding 12-month period and not previously reported
pursuant to clause (a) of this paragraph, the Company shall deliver an Officers'
Certificate to the Trustee describing in reasonable detail the nature of such
Restricted Payment, stating that the Restricted Payment is permitted and setting
forth the basis upon with the calculations required by this covenant were
computed.
SECTION 4.4. CORPORATE AND PARTNERSHIP EXISTENCE
Except as otherwise permitted by Article V, Section 4.14 or Section
11.4, the Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their respective
corporate, partnership or other organizational existence, as the case may be,
and the corporate, partnership or other organizational existence, as the case
may be, of each of their Subsidiaries in accordance with the respective
organizational documents of each of them and the material rights (charter and
statutory) and material corporate franchises of the Company, the Guarantors and
each of their respective Subsidiaries; provided, however, that neither the
Company nor any Guarantor shall be required to preserve, with respect to
themselves, any right or franchise, and with respect to any of their respective
Subsidiaries, any such existence, right or franchise, if (a) the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and (b) the loss thereof would not have a material
adverse effect on the Company's or any Guarantor's ability to perform its
obligations under this Indenture or the Notes.
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS
54
The Company and the Guarantors shall, and each of the Company and the
Guarantors shall cause each of their Subsidiaries to, pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (a) all
material taxes, assessments and governmental charges (including withholding
taxes and any penalties, interest and additions to taxes) levied or imposed upon
the Company, any Guarantor or any of their Subsidiaries or any of their
respective properties and assets and (b) all lawful claims, whether for labor,
materials, supplies or services, which have become due and payable and which by
law have or may become a Lien upon any material property and assets of the
Company, any Guarantor or any of their Subsidiaries; provided, however, that
neither the Company nor any Guarantor shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE
The Company and the Guarantors shall cause all material properties
used or useful in the conduct of their business and the business of each of
their Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) so that the business carried
on in connection therewith may be properly conducted at all times; provided,
however, that nothing in this Section 4.6 shall prevent the Company or any
Guarantor from discontinuing any operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
(a)(i) in the judgment of the Board of Directors of the Company, desirable in
the conduct of the business of the Company and (ii) would not have a material
adverse effect on the Company's or any Guarantor's ability to perform its
obligations under this Indenture or the Notes or (b) otherwise permitted under
Section 4.14.
The Company and the Guarantors shall provide, or cause to be provided,
for themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries in a prudent manner, with (except for self-insurance)
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the reasonable, good faith opinion of
the Company and adequate and appropriate for the conduct of the business of the
Company, the Guarantors and such Subsidiaries in a prudent manner for entities
similarly situated in the industry in which, at any time of determination, they
are then operating.
SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT
(a) The Company shall deliver to the Trustee within 120 days after
the end of its fiscal year an Officers' Certificate, one of the signers of which
shall be the principal executive, principal financial or principal accounting
officer of the Company, complying with TIA 314(a)(4) and stating that a review
of its activities and the activities of its Subsidiaries, if any, during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to
55
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture (without regard to notice requirements or grace
periods) and further stating, as to each such Officer signing such certificate,
whether or not the signer knows of any failure by the Company, any Guarantor or
any Subsidiary of the Company to comply with any conditions or covenants in this
Indenture and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with reasonable particularity. The
Officers' Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year end date.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, promptly upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
The Trustee shall not be deemed to have knowledge of any Default, any Event of
Default or any such fact unless one of its Trust Officers receives written
notice thereof from the Company or any of the Holders.
SECTION 4.8. REPORTS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall furnish to the
Trustee, to each Holder and to prospective purchasers of Notes identified to the
Company by an Initial Purchaser, within 5 days after the Company is or would
have been (if it were subject to such reporting obligations) required to file
such with the SEC, annual and quarterly financial statements substantially
equivalent to financial statements that would have been included in reports
filed with the SEC, if the Company were subject to the requirements of Section
13 or 15(d) of the Exchange Act, including, with respect to annual information
only, a report thereon by the Company's certified independent public accountants
as such would be required in such reports to the SEC, and, in each case,
together with a management's discussion and analysis of financial condition and
results of operations which would be so required and, unless the SEC will not
accept such reports, file with the SEC the annual, quarterly and other reports
which the Company is or (if it were subject to such reporting requirements)
would have been required to file with the SEC.
For so long as any Transfer Restricted Notes remain outstanding, the
Company shall make available (which shall include filings by EDGAR) to all
Holders and to securities analysts and prospective investors, upon their
reasonable request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT COMPANY
Neither the Company nor any of its Subsidiaries shall become required
to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended).
56
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Subsidiaries shall, on or after the
Issue Date, enter into or suffer to exist any contract, agreement, arrangement
or transaction with any Affiliate (an "Affiliate Transaction"), or any series of
related Affiliate Transactions, (other than Exempted Affiliate Transactions),
(1) unless it is determined that the terms of such Affiliate Transaction are
fair and reasonable to the Company, and no less favorable to the Company than
could have been obtained in an arm's length transaction with a non-Affiliate,
and (2) if involving consideration to either party in excess of $5,000,000,
unless such Affiliate Transaction(s) is evidenced by an Officers' Certificate
addressed and delivered to the Trustee certifying that such Affiliate
Transaction(s) has been approved by a majority of the members of the Company's
Board of Directors that are disinterested in such transaction, if there are any
directors who are so disinterested, and (3) if involving consideration to either
party in excess of $10,000,000, unless in addition the Company, prior to the
consummation thereof, obtains a written favorable opinion as to the fairness of
such transaction to the Company from a financial point of view from an
independent investment banking firm of national reputation in the United States
or, if pertaining to a matter for which such investment banking firms do not
customarily render such opinions, an accounting, appraisal or valuation firm of
national reputation in the United States.
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS
Except as set forth in this Section 4.11, the Company and the
Guarantors shall not, and neither the Company nor the Guarantors shall permit
any of their respective Subsidiaries to, directly or indirectly, issue, assume,
guarantee, incur, become directly or indirectly liable with respect to
(including as a result of an Acquisition), or otherwise become responsible for,
contingently or otherwise (individually and collectively, to "incur" or, as
appropriate, an "incurrence"), any Indebtedness (including Disqualified Capital
Stock and Acquired Indebtedness), other than Permitted Indebtedness.
Notwithstanding the foregoing if:
(1) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect on a pro
forma basis to, such incurrence of Indebtedness and
(2) on the date of such incurrence (the "Incurrence Date"), the
Company's Consolidated Coverage Ratio for the Reference Period immediately
preceding the Incurrence Date, after giving effect on a pro forma basis to
such incurrence of such Indebtedness and, to the extent set forth in the
definition of Consolidated Coverage Ratio, the use of proceeds thereof,
would be at least 2.5 to 1.0 (the "Debt Incurrence Ratio"),
then the Company and the Guarantors may incur such Indebtedness (including
Disqualified Capital Stock).
57
In addition, the foregoing limitations of the first paragraph of this
Section 4.11 will not prohibit:
(a) the Company's incurrence or the incurrence by any Guarantor or
Non-Guarantor Subsidiary of Capital Expenditure Indebtedness; provided, that
(1) the aggregate amount of such Indebtedness incurred and
outstanding at any time pursuant to this paragraph (a) (plus any
Refinancing Indebtedness issued to retire, defease, refinance, replace or
refund such Indebtedness) shall not exceed $25,000,000, and
(2) in each case, such Indebtedness shall not constitute more
than 100% of the Company's cost or the cost to such Guarantor or
Non-Guarantor Subsidiary (determined in accordance with GAAP), as
applicable, of the property so acquired, constructed, installed, improved
or leased;
(b) if no Event of Default shall have occurred and be continuing, the
Company's incurrence or the incurrence by any Guarantor or Non-Guarantor
Subsidiary of Indebtedness in an aggregate amount incurred and outstanding at
any time pursuant to this paragraph (b) (plus any Refinancing Indebtedness
incurred to retire, defease, refinance, replace or refund such Indebtedness) of
up to $25,000,000; and
(c) the Company's incurrence or the incurrence by any Guarantor of
Indebtedness pursuant to the Credit Agreement in an aggregate amount incurred
and outstanding at any time pursuant to this paragraph (c) (plus any Refinancing
Indebtedness incurred to retire, defease, refinance, replace or refund such
Indebtedness) of up to $600,000,000, minus the amount of any such Indebtedness
(1) retired with the Net Cash Proceeds from any Asset Sale applied to
permanently reduce the outstanding amounts or the commitments with respect to
such Indebtedness pursuant to clause (1)(b)(ii) of Section 4.14 or (2) assumed
by a transferee in an Asset Sale so long as neither the Company nor such
Guarantor continues to be an obligor under such Indebtedness.
Indebtedness (including Disqualified Capital Stock) of any Person
which is outstanding at the time such Person becomes one of the Company's
Subsidiaries (including upon designation of any subsidiary or other Person as a
Subsidiary) or is merged with or into or consolidated with the Company or one of
the Company's Subsidiaries shall be deemed to have been incurred at the time
such Person becomes or is designated one of the Company's Subsidiaries or is
merged with or into or consolidated with the Company or one of the Company's
Subsidiaries as applicable.
Notwithstanding any other provision of this Section 4.11, but only to
avoid duplication, a guarantee of the Company's Indebtedness or of the
Indebtedness of a Guarantor or a Non-Guarantor Subsidiary incurred in accordance
with the terms of this Indenture issued at the time such Indebtedness was
incurred or if later at the time the guarantor thereof became one of the
Company's Subsidiaries will not constitute a separate incurrence, or amount
outstanding, of Indebtedness. Upon each incurrence the Company may determine
pursuant to which provision of
58
this Section 4.11 such Indebtedness is being incurred and the Company may
subdivide an amount of Indebtedness and determine more than one provision
pursuant to which such amount of Indebtedness is being incurred and such
Indebtedness shall not be deemed to have been incurred or outstanding under any
other provision of this Section 4.11, except as stated otherwise in the
foregoing provisions.
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES
The Company and the Guarantors shall not, and neither the Company nor
the Guarantors shall permit any of their respective Subsidiaries to, directly or
indirectly, create, assume or suffer to exist any consensual restriction on the
ability of any of the Subsidiary of the Company (w) to pay dividends or make
other distributions to or on behalf of, or (x) to pay any obligation to or on
behalf of, or (y) otherwise to transfer assets or property to or on behalf of,
or (z) to make or pay loans or advances to or on behalf of, the Company or any
of its Subsidiaries except:
(1) restrictions imposed by the Notes or this Indenture or by
the Company's other Indebtedness (which may also be guaranteed by the
Guarantors) ranking senior to the Notes or the Guarantees, as applicable;
provided, that such restrictions are no more restrictive than those imposed
by this Indenture and the Notes.
(2) restrictions imposed by applicable law,
(3) existing restrictions under Existing Indebtedness,
(4) restrictions under any Acquired Indebtedness not incurred in
violation of this Indenture or any agreement (including any Equity
Interest) relating to any property, asset, or business acquired by the
Company or any of its Subsidiaries, which restrictions in each case existed
at the time of acquisition, were not put in place in connection with or in
anticipation of such acquisition and are not applicable to any Person,
other than the Person acquired, or to any property, asset or business,
other than the property, assets and business so acquired,
(5) any restriction imposed by Indebtedness incurred under the
Credit Agreement pursuant to clause (c) of Section 4.11; provided, that
such restriction or requirement is no more restrictive than that imposed by
the Credit Agreement as of the Issue Date,
(6) restrictions with respect solely to any of the Company's
Subsidiaries imposed pursuant to a binding agreement which has been entered
into for the sale or disposition of all or substantially all of the Equity
Interests or assets of such Subsidiary; provided, that such restrictions
apply solely to the Equity Interests or assets of such Subsidiary which are
being sold,
59
(7) restrictions on transfer contained in Capital Expenditure
Indebtedness incurred pursuant to clause (a) of Section 4.11; provided,
that such restrictions relate only to the transfer of the property financed
with the proceeds of such Capital Expenditure Indebtedness, and
(8) in connection with and pursuant to permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (1), (3), (4) or
(7) or this clause (8) of this paragraph that are not more restrictive than
those being replaced and do not apply to any other Person or assets than
those that would have been covered by the restrictions in the Indebtedness
so refinanced, and
(9) solely with respect to Non-Guarantor Subsidiaries,
restrictions under the organizational documents governing such Subsidiary:
(a) with respect to existing Non-Guarantor Subsidiaries,
existing on the Issue Date, and
(b) with respect to Non-Guarantor Subsidiaries created
after the Issue Date:
(i) prohibiting such Subsidiary from guaranteeing
Indebtedness of the Company or another Subsidiary,
(ii) on dividend payments and other distributions
solely to permit pro rata dividends and other distributions in respect
of any Equity Interests of such Subsidiary, and
(iii) with respect to clauses (y) and (z) above,
limiting such transactions to those with terms that are fair and
reasonable to such Subsidiary and no less favorable to such Subsidiary
than could have been obtained in an arm's length transaction with an
unrelated third party.
Notwithstanding the foregoing, in the case of clause (y) above,
encumbrances or restrictions (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is subject to a
lease, license or similar contract entered into in the ordinary course of
business, or the assignment or transfer of any lease, license or contract
entered into in the ordinary course of business, (B) by virtue of any transfer
of, agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Subsidiary not otherwise prohibited by
this Indenture in respect of the assets subject thereto or (C) contained in
security agreements or mortgages securing Indebtedness to the extent such
encumbrances or restrictions restrict the transfer of the property subject to
such security agreements or mortgages may be subject to customary restrictions
on the transfer or disposition thereof pursuant to such Lien.
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS
60
The Company and the Guarantors shall not, and neither the Company nor
the Guarantors shall permit any of their respective Subsidiaries to, directly or
indirectly, incur, create, issue, assume, guarantee or otherwise become liable
for any Indebtedness that is contractually subordinate in right of payment to
any of the Company's other Indebtedness or any other Indebtedness of a Guarantor
unless, by its terms, such Indebtedness is contractually subordinate in right of
payment to, or ranks pari passu with, the Notes or the Guarantee, as applicable.
SECTION 4.14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK
The Company and the Guarantors shall not, and neither the Company nor
the Guarantors shall permit any of their respective Subsidiaries to, in one or a
series of related transactions, convey, sell, lease, transfer, assign or
otherwise dispose of, directly or indirectly, any of their property, business or
assets, including by merger or consolidation (in the case of a Guarantor or one
of the Company's Subsidiaries), and including any sale or other transfer or
issuance of any Equity Interests of any of the Company's Subsidiaries or
Unrestricted Subsidiaries, whether by the Company or one of its Subsidiaries or
Unrestricted Subsidiaries or through the issuance, sale or transfer of Equity
Interests by one of the Company's Subsidiaries or Unrestricted Subsidiaries and
including any sale and leaseback transaction (any of the foregoing, an "Asset
Sale"), unless:
(1) (a) the Net Cash Proceeds therefrom (the "Asset Sale Offer
Amount") are applied within 365 days after the date of such Asset Sale, to
the extent not applied in accordance with paragraph (b) below, to the:
(i) optional redemption of the Notes in accordance
with the terms of this Indenture and the Company's other Indebtedness
ranking on a parity with the Notes and with similar provisions
requiring the Company to redeem such Indebtedness with the proceeds
from such Asset Sale, pro rata in proportion to the respective
principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other
Indebtedness then outstanding, or
(ii) repurchase of the Notes and such other
Indebtedness ranking on a parity with the Notes and with similar
provisions requiring the Company to make an offer to purchase such
Indebtedness with the proceeds from such Asset Sale pursuant to a cash
offer (subject only to conditions required by applicable law, if any)
(pro rata in proportion to the respective principal amounts (or
accreted values in the case of Indebtedness issued with an original
issue discount) of the Notes and such other Indebtedness then
outstanding) (the "Asset Sale Offer") at a purchase price of 100% of
the principal amount (or accreted value in the case of Indebtedness
issued with an original issue discount) (the "Asset Sale Offer Price")
together with accrued and unpaid interest and Liquidated Damages, if
any, to the date of payment, made within 335 days of such Asset Sale,
or
61
(b) within 365 days following such Asset Sale, the Asset
Sale Offer Amount is:
(i) invested in assets or property (other than notes,
bonds, obligations and securities, except in connection with the
acquisition of a Wholly Owned Subsidiary that immediately becomes a
Guarantor in a Related Business) which will constitute or be a part of
a Related Business of the Company or such Subsidiary (if it continues
to be a Subsidiary) immediately following such transaction or
(ii) used to retire Senior Debt and to permanently
reduce the amount of such Senior Debt outstanding on the Issue Date or
permitted pursuant to paragraphs (b) and (c) of Section 4.11
(including that in the case of a revolver or similar arrangement that
makes credit available, such commitment is so permanently reduced by
such amount);
provided, however, that with respect to any Asset Sale occurring during 2001,
the Asset Sale Offer Amount received therefrom may be applied as provided in (a)
or (b) above at any time prior to December 31, 2002, and any Asset Sale Offer
made in accordance with (a)(ii) above may be made at any time prior to December
1, 2002,
(2) at least 75% of the total consideration for such Asset Sale
or series of related Asset Sales consists of cash or Cash Equivalents,
provided, that up to one-third of such 75% may consist of notes or other
obligations received by the Company or such Subsidiary from such transferee
that are converted by the Company or such Subsidiary into cash (to the
extent of the cash received) within 365 days after receipt, which shall
constitute Net Cash Proceeds attributable to the original Asset Sale for
which such notes or other obligations were received, and provided further
that any Indebtedness of the Company or any Subsidiary (as shown on the
Company's or such Subsidiary's most recent balance sheet), other than
Subordinated Indebtedness, that is assumed by the transferee of any such
assets shall constitute cash for purposes hereof, so long as the Company
and all of its Subsidiaries are fully and unconditionally released
therefrom, and
(3) the Company or such Subsidiary, as applicable, receives fair
market value for such Asset Sale, such determination to be made in good
faith by the Company's Board of Directors, for Asset Sales exceeding
$25,000,000.
Pending the final application of any Net Cash Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest the Net
Cash Proceeds in any manner that is not prohibited by this Indenture.
An acquisition of Notes pursuant to an Asset Sale Offer may be
deferred until the accumulated Net Cash Proceeds from Asset Sales not applied to
the uses and in the time periods set forth in 1(a)(i) or 1(b) above (the "Excess
Proceeds") exceeds $10,000,000 and that each Asset Sale
62
Offer shall remain open for at least 20 Business Days following its commencement
(the "Asset Sale Offer Period").
Upon expiration of the Asset Sale Offer Period, the Company shall
apply the Asset Sale Offer Amount plus an amount equal to accrued and unpaid
interest and Liquidated Damages, if any, to the purchase of all Indebtedness
properly tendered in accordance with the provisions hereof (on a pro rata basis
if the Asset Sale Offer Amount is insufficient to purchase all Indebtedness so
tendered) at the Asset Sale Offer Price (together with accrued interest and
Liquidated Damages, if any). To the extent that the aggregate amount of Notes
and such other pari passu Indebtedness tendered pursuant to an Asset Sale Offer
is less than the Asset Sale Offer Amount, the Company may use any remaining Net
Cash Proceeds for general corporate purposes as otherwise permitted by this
Indenture and following the consummation of each Asset Sale Offer the Excess
Proceeds amount shall be reset to zero.
Notwithstanding, and without complying with, the provisions of this
covenant:
(1) the Company may and its Subsidiaries may, in the ordinary
course of business, (a) convey, sell, transfer, assign or otherwise dispose
of inventory and other assets acquired and held for resale in the ordinary
course of business and (b) liquidate Cash Equivalents,
(2) the Company may and its Subsidiaries may convey, sell,
transfer, assign or otherwise dispose of assets pursuant to and in
accordance with Article V,
(3) the Company may and its Subsidiaries may sell or dispose of
damaged, worn out surplus or obsolete personal property in the ordinary
course of business so long as such property is no longer necessary for the
proper conduct of the Company's business or the business of such
Subsidiary, as applicable,
(4) the Company may and its Subsidiaries may convey, sell,
lease, transfer, assign or otherwise dispose of assets to the Company or
any of the Guarantors,
(5) the Company may and its Subsidiaries may, in the ordinary
course of business, convey, sell, lease, transfer, assign, or otherwise
dispose of assets (or related assets in related transactions) with a fair
market value of less than $1,000,000,
(6) the Company may and each of its Subsidiaries may settle or
release litigation claims in the ordinary course of business or grant Liens
not prohibited by this Indenture,
(7) the Company may and its Subsidiaries may exchange assets
held by the Company or such Subsidiaries for assets held by any Person or
entity; provided, that (a) at the time of or when entering into any such
exchange of assets and immediately after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing or would
63
occur as a consequence thereof, (b) the assets received by the Company or
such Subsidiaries in any such exchange will immediately constitute, be a
part of, or be used in, a Related Business of the Company or such
Subsidiaries, (c) with respect to transactions involving assets with a fair
market value of $25,000,000 or more, the Company's Board of Directors has
determined that the terms of any exchange are fair and reasonable, and (d)
any such exchange shall be deemed to be an Asset Sale to the extent that
the Company or any of the Company's Subsidiaries receives cash or Cash
Equivalents in such exchange, and
(8) the Company and its Subsidiaries may enter into operating
leases of real or personal property in the ordinary course of business.
In addition to the foregoing and notwithstanding anything herein to
the contrary, the Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, make any Asset Sale of any of the Equity Interests
of any of its Subsidiaries (other than to the Company or to a Wholly Owned
Subsidiary that is a Guarantor) except (i) pursuant to an Asset Sale of all the
Equity Interests of such Subsidiary or (ii) provided, that after such sale the
Company or its Subsidiaries own a majority of the voting and economic Equity
Interests of such Subsidiary, an Asset Sale of Equity Interests with no
preferences or special rights or privileges and with no redemption or prepayment
provisions, or (iii) up to $10,000,000 in the aggregate per fiscal year, not to
exceed $50,000,000 in the aggregate, of sales of Equity Interests in excess of
50% of the Equity Interests of such Subsidiary, provided, that (x) such
Subsidiary exists solely for the purpose of owning and operating one or more
dialysis centers and providing services related thereto, (y) the Company or its
Subsidiaries own at least 20% of the voting and economic Equity Interests in
such Subsidiary after such Asset Sale, and (z) the Company or any of its
Subsidiaries enter into a management contract with respect to all of the
dialysis centers owned by the Subsidiary that was the subject of the Asset Sale.
In the case of clause (iii) of the preceding sentence, to the extent that the
aggregate amount available for sales of Equity Interests has been reduced as a
result of such sales, and the Company, a Guarantor or a Non-Guarantor Subsidiary
thereafter shall either (A) sell in an Asset Sale in compliance with the
provisions of this covenant all of the remaining Equity Interests in such
Subsidiary owned by the Company and its Subsidiaries or (B) repurchase Equity
Interests of such Subsidiary such that the Company, a Guarantor and/or a
Non-Guarantor Subsidiary own(s) in the aggregate in excess of 50% of the Equity
Interests of such Subsidiary upon repurchase, then an amount equal to the sales
price received for such Equity Interests sold in the case of clause (A), or the
purchase price paid for such Equity Interests so repurchased in the case of
clause (B), in either case as determined in good faith, shall increase the
aggregate amount available for future sales under such clause (iii); provided,
that
(a) the amount added back to the aggregate amount shall not exceed
the amount originally deducted therefrom upon the original sale of the Equity
Interests in such Subsidiary;
(b) the aggregate amount available shall in no event exceed
$50,000,000 at any time;
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(c) the aggregate amount available per year shall in no event
exceed $10,000,000 in any year; and
(d) to the extent a Non-Guarantor Subsidiary repurchases such
Equity Interests, such repurchase shall be deemed a formation of a
Non-Guarantor Subsidiary on the date of repurchase for purposes of the
definition of Non-Guarantor Subsidiary.
Any Asset Sale Offer shall be made in compliance with all applicable
laws, rules, and regulations, including, if applicable, Regulation 14E of the
Exchange Act and the rules and regulations thereunder and all other applicable
federal and state securities laws. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this paragraph,
the Company's compliance or the compliance of any of the Company's subsidiaries
with such laws and regulations shall not in and of itself cause a breach of the
Company's obligations under this Section 4.14.
If the payment date in connection with an Asset Sale Offer hereunder
is on or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and Liquidated Damages,
if any) due on such Interest Payment Date will be paid to the Person in whose
name a Note is registered at the close of business on such Record Date on the
corresponding Interest Payment Date.
Notice of an Asset Sale Offer shall be sent, on or prior to the
commencement of the Asset Sale Offer, by first-class mail, by the Company to
each Holder at its registered address, with a copy to the Trustee. At the
Company's request, the Paying Agent shall give the notice of Asset Sale Offer in
the Company's name and at the Company's expense. The notice to the Holders shall
contain all information, instructions and materials required by applicable law
or which the Company in good faith believes will enable such Holders to make an
informed decision with respect to the Asset Sale Offer. The notice, which (to
the extent consistent with this Indenture) shall govern the terms of an Asset
Sale Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to such
notice and this Section 4.14;
(2) the Asset Sale Offer Amount, the Asset Sale Offer Price
(including the amount of accrued but unpaid interest (and Liquidated
Damages, if any)), and the date of purchase;
(3) that any Note or portion thereof not tendered or accepted
for payment will continue to accrue interest (and Liquidated Damages, if
any) if interest (and Liquidated Damages, if any) is then accruing;
(4) that, unless the Company defaults in depositing cash with
the Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding anything in this Indenture to the contrary, be the Company
or any Affiliate of the Company) in accordance
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with the last paragraph of this Section 4.14, any Note, or portion thereof,
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest (and Liquidated Damages, if any) after the payment date in
connection with an Asset Sale Offer;
(5) that Holders electing to have a Note, or portion thereof,
purchased pursuant to an Asset Sale Offer will be required to surrender
their Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, to the Paying Agent (which may not for
purposes of this Section 4.14, notwithstanding any other provision of this
Indenture, be the Company or any Affiliate of the Company) prior to the
close of business on the date specified in the notice, which shall not be
earlier than the date on which the Asset Sale Offer expires, at the address
specified in the notice;
(6) that Holders will be entitled to withdraw their elections,
in whole or in part, if the Paying Agent receives, prior to the expiration
of the Asset Sale Offer, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes the Holder is
withdrawing and a statement containing a facsimile signature and stating
that such Holder is withdrawing his election to have such principal amount
of the Notes purchased;
(7) that if Indebtedness in an aggregate principal amount in
excess of the aggregate principal amount of Notes to be acquired pursuant
to the Asset Sale Offer are tendered and not withdrawn, the Company shall
purchase Indebtedness on a pro rata basis in proportion to the respective
principal amounts (or accreted values in the case of Indebtedness issued
with an original issue discount) thereof (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of
$1,000 or integral multiples of $1,000 shall be acquired);
(8) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered; and
(9) the circumstances and relevant facts regarding such Asset
Sales.
On or before the date of purchase, the Company shall (i) accept for
payment Notes or portions thereof properly tendered pursuant to the Asset Sale
Offer (on a pro rata basis if required pursuant to paragraph (7) above), (ii)
deposit with the Paying Agent cash sufficient to pay the Asset Sale Offer Price
for all Notes or portions thereof so accepted and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate setting forth the Notes
or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Notes so accepted payment in an amount
equal to the Asset Sale Offer Price for such Notes, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered. Any Notes
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof.
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SECTION 4.15. WAIVER OF STAY, EXTENSION OR USURY LAWS
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium of, or interest (or Liquidated Damages, if any) on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.16. LIMITATION ON LIENS SECURING INDEBTEDNESS
The Company and the Guarantors shall not, and neither the Company nor
the Guarantors shall permit any of their respective Subsidiaries to, create,
incur, assume or suffer to exist any Lien of any kind, other than Permitted
Liens, upon any of their respective assets now owned or acquired on or after the
date of this Indenture or upon any income or profits therefrom securing any
Indebtedness of the Company, or any Indebtedness of any Guarantor, unless the
Company provides, and causes its Subsidiaries to provide, concurrently
therewith, that the Notes and the applicable Guarantees are equally and ratably
so secured, provided that if such Indebtedness is Subordinated Indebtedness, the
Lien securing such Subordinated Indebtedness shall be contractually subordinate
and junior to the Lien securing the Notes (and any related applicable
Guarantees) with the same relative priority as such Subordinated Indebtedness
shall have with respect to the Notes (and any related applicable Guarantees).
SECTION 4.17. LIMITATIONS ON LINES OF BUSINESS
Neither the Company nor any of its Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than that which is a Related Business.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Company will not consolidate with or merge with or into another
Person or, directly or indirectly, sell, lease, convey or transfer all or
substantially all of its assets (such amounts to be computed on a consolidated
basis), whether in a single transaction or a series of related transactions, to
another Person or group of affiliated Persons, unless:
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(1) either (a) the Company is the continuing entity or (b) the
resulting, surviving or transferee entity is a corporation organized under
the laws of the United States, any state thereof or the District of
Columbia and expressly assumes by supplemental indenture all of the
Company's obligations in connection with the Notes and this Indenture;
(2) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction;
(3) unless such transaction is solely the merger of the Company
and one of its previously existing Subsidiaries and which transaction is
not for the purpose of evading this provision and not in connection with
any other transaction, immediately after giving effect to such transaction
on a pro forma basis, the consolidated resulting, surviving or transferee
entity would immediately thereafter be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt Incurrence Ratio set forth in
Section 4.11; and
(4) each Guarantor shall have by amendment to this Indenture
confirmed that its Guarantee shall apply to the obligations of the Company
or the surviving entity in accordance with the Notes and this Indenture.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets of
one or more Subsidiaries of the Company, the Company's interest in which
constitutes all or substantially all of the Company's properties and assets,
shall be deemed to be the transfer of all or substantially all of the Company's
properties and assets.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made, shall succeed to and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named herein as the Company, and (except in the case of a
lease) when a successor corporation duly assumes all of the obligations of the
Company pursuant hereto and pursuant to the Notes, the Company shall be released
from such obligations (except with respect to any obligations that arise from,
or are related to, such transaction).
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT
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"Event of Default," wherever used herein, means any one of the
following events (whatever reason for such Event of Default and whether it shall
be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the Company's failure to pay any installment of
interest (or Liquidated Damages, if any) on the Notes as and when the same
becomes due and payable and the continuance of any such failure for 30
days,
(ii) the Company's failure to pay all or any part of the
principal, or premium, if any, on the Notes when and as the same becomes
due and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, payment of the Change of Control Purchase
Price or the Asset Sale Offer Price on Notes validly tendered and not
properly withdrawn pursuant to a Change of Control Offer or Asset Sale
Offer, as applicable,
(iii) the Company's failure or the failure by any of its
Subsidiaries to observe or perform any other covenant or agreement
contained in the Notes or this Indenture and, except for the provisions
under Section 4.3 and Article V the continuance of such failure for a
period of 30 days after written notice is given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes outstanding,
(iv) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a period
of 60 days; or a decree, judgment or order of a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency for the Company, any of its Significant
Subsidiaries, or any substantial part of the property of any such Person,
or for the winding up or liquidation of the affairs of any such Person,
shall have been entered, and such decree, judgment, or order shall have
remained in force undischarged and unstayed for a period of 60 days;
(v) the Company or any of its Significant Subsidiaries
shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization under any
bankruptcy or similar law or similar statute, or shall consent to the
filing of any such petition, or shall consent to the appointment of a
custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any substantial part of its assets or property, or
shall make a general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become
due, fail generally to
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pay its debts as they become due, or take any corporate action in
furtherance of any of the foregoing;
(vi) a default in the Company's Indebtedness or the
Indebtedness of any of its Subsidiaries with an aggregate amount
outstanding in excess of $10,000,000 (a) resulting from the failure to pay
principal at the stated maturity of such Indebtedness or (b) as a result of
which the maturity of such Indebtedness has been accelerated prior to its
stated maturity,
(vii) final unsatisfied judgments not covered by insurance
aggregating in excess of $5,000,000, at any one time rendered against the
Company or any of its Subsidiaries and not stayed, bonded or discharged
within 60 days, and
(viii) any Guarantee of a Guarantor ceases to be in full
force and effect or becomes unenforceable or invalid or is declared null
and void or any Guarantor denies or disaffirms its obligations under its
Guarantee, in any case, other than in accordance with the terms of the
Guarantee and this Indenture.
SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT
If an Event of Default occurs and is continuing (other than an Event
of Default specified in Section 6.1(iv) or Section 6.1(v) above relating to the
Company or any of its Significant Subsidiaries), then, and in every such case,
unless the principal of all of the Notes shall have already become due and
payable, either the Trustee or the Holders of at least 25% in aggregate
principal amount of then outstanding Notes, by notice in writing to the Company
(and to the Trustee if given by Holders) (an "Acceleration Notice"), may declare
all principal, determined as set forth below, and accrued interest (and
Liquidated Damages, if any) thereon to be due and payable immediately, provided,
however, that if any Senior Debt is outstanding pursuant to the Credit
Agreement, upon a declaration of such acceleration, such principal and interest
shall be due and payable upon the earlier of (x) the fifth Business Day after
sending the Company and such Senior Debt representatives such written notice,
unless such Event of Default is cured or waived prior to such date and (y) the
date of acceleration of any Senior Debt under the Credit Agreement.
In the event a declaration of acceleration resulting from an Event of
Default described in Section 6.1(vi) above with respect to any Senior Debt has
occurred and is continuing, such declaration of acceleration shall be
automatically annulled if such default is cured or waived or the holders of the
Indebtedness which is the subject of such default have rescinded their
declaration of acceleration in respect of such Indebtedness within 10 days
thereof and the Trustee has received written notice of such cure, waiver or
rescission and no other Event of Default described in clause (vi) above has
occurred that has not been cured or waived within 10 days of the declaration of
such acceleration in respect of such Indebtedness.
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If an Event of Default specified in Section 6.1(iv) or Section 6.1(v)
above relating the Company or any of its Significant Subsidiaries occurs, all
principal and accrued interest (and Liquidated Damages, if any) thereon will be
immediately due and payable on all outstanding Notes without any declaration or
other act on the part of the Trustee or the Holders.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal of,
premium, if any, interest or Liquid Damages, if any, that has become due solely
because of the acceleration) have been cured or waived as provided in Section
6.12.
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (i) or (ii) of Section 6.1
hereof occurs and is continuing, the Company shall, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Notes, the whole amount then
due and payable on such Notes for principal, premium (if any), and interest (and
Liquidated Damages, if any), and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium, if
any), and on any overdue interest (and Liquidated Damages, if any), at the rate
borne by the Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including compensation
to, and expenses, disbursements and advances of the Trustee and its agents and
counsel and all other amounts due the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Notes,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or of such other
71
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest (and Liquidated Damages, if any)) shall be entitled and empowered,
by intervention in such proceeding or otherwise to take any and all actions
under the TIA, including
(1) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest (and Liquidated Damages, if any) owing
and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agent and counsel and all
other amounts due the Trustee under Section 7.7) and of the Holders allowed
in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided, however, that the
Trustee may, on behalf of the Holders, vote for the election of a Trustee in
bankruptcy or a similar official and may be a member of any creditor's committee
approved in such matter.
SECTION 6.5. 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 in favor of the Holders, and any recovery of judgment shall,
after provision for the payment of compensation to, and expenses, disbursements
and advances of the Trustee and its agents and counsel and all other amounts due
the Trustee under Section 7.7, be for the ratable benefit of the Holders of the
Notes in respect of which such judgment has been recovered.
SECTION 6.6. PRIORITIES
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Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), or interest (or Liquidated Damages, if any), upon presentation of the
Notes and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 hereof;
SECOND: To the holders of Senior Debt if and to the extent required by
Articles XI and XII;
THIRD: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), and interest (and Liquidated Damages, if
any) on, the Notes in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Notes for principal, premium
(if any), and interest (and Liquidated Damages, if any), respectively; and
FOURTH: To the Company, the Guarantors or such other Person as may be
lawfully entitled thereto, the remainder, if any, each as their respective
interests may appear.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. LIMITATION ON SUITS
No Holder of any Note shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in
aggregate principal amount of then outstanding Notes shall
have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(C) such Holder or Holders have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities to be incurred or reasonably
probable to be incurred in compliance with such request;
73
(D) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(E) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in aggregate principal
amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST
Notwithstanding any other provision of this Indenture, the Holder of
any Note shall have the right, which, subject to the provisions of Section 11.5
and Article XII, is absolute and unconditional, to receive payment of the
principal of, and premium (if any), and interest (and Liquidated Damages, if
any) on, such Note on the Maturity Dates of such payments as expressed in such
Note (in the case of redemption, the Redemption Price on the applicable
Redemption Date, in the case of a Change of Control, the Change of Control
Purchase Price on the Change of Control Purchase Date, and in the case of an
Asset Sale, the Asset Sale Offer Price on the relevant purchase date) and to
institute suit for the enforcement of any such payment after such respective
dates, and such rights shall not be impaired without the consent of such Holder.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in Section 2.7 hereof, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.10. DELAY OR OMISSION NOT WAIVER
No delay or omission by the Trustee or by any Holder of any Note to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this
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Article VI or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 6.11. CONTROL BY HOLDERS
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. WAIVER OF EXISTING OR PAST DEFAULT
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Notes may, on behalf
of all Holders, waive any existing or past Default or Event of Default hereunder
and its consequences under this Indenture, except a continuing Default or Event
of Default
(A) in the payment of the principal of, premium,
if any, or interest (or Liquidated Damages, if any) on, any
Note as specified in clauses (i) and (ii) of Section 6.1
hereof and not yet cured, or
(B) in respect of a covenant or provision hereof
which, under Article IX, cannot be modified or amended
without the consent of the Holders of each outstanding Note
affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 6.13. UNDERTAKING FOR COSTS
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that in any suit for the
enforcement of any right or remedy
75
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, any court may in its
discretion require the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 6.13 shall not apply to any suit instituted by
the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Notes, or to any suit instituted
by any Holder for enforcement of the payment of principal of, or premium (if
any), or interest (or Liquidated Damages, if any) on, any Note on or after the
respective Maturity Date expressed in such Note (including, in the case of
redemption, on or after the Redemption Date).
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
SECTION 7.1. DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are
adverse to the Trustee, and
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(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein or otherwise verify the contents thereof).
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1,
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts, and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.11 hereof.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company
(including without limitation to the extent the Trustee receives funds prior to
the interest payment date in order to comply with the provisions of Section
4.1). Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE
Subject to Section 7.1 hereof:
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(a) The Trustee may rely on any document reasonably believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in such document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5 hereof. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or, if in writing, advice of counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it or its agent
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this Indenture, any
demand, request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or such Guarantor, as
applicable.
(h) The Trustee shall have no duty to inquire as to the performance
of the Company's or any Guarantor's covenants in Article IV hereof or as to the
performance by any Agent of its duties hereunder. In addition, the Trustee shall
not be deemed to have knowledge of any Default or Event of Default except (i)
any Event of Default occurring pursuant to Sections 6.1(i), 6.1(ii) and 4.1
hereof, or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate, an Opinion of Counsel or both.
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(j) No permissive right of the Trustee to act hereunder shall be
construed as a duty.
(k) The Trustee shall not be deemed to have notice or knowledge
(including actual knowledge) of any matter unless a Trust Officer has actual
knowledge thereof or unless written notice thereof is received by the Trustee at
the office specified in Section 13.2 and such notice references the Notes
generally, the Company or this Indenture.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11
hereof.
SECTION 7.4. TRUSTEE'S DISCLAIMER
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes and it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement or recital herein or any other document in connection with the sale of
the Notes, other than the Trustee's certificate of authentication, or the use or
application of any funds received by a Paying Agent other than the Trustee.
SECTION 7.5. NOTICE OF DEFAULT
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. The Trustee may withhold such notice if and so long as
a Trust Officer in good faith determines that withholding the notice is in the
interest of the Holders, except in the case of a Default in payment of principal
(or premium, if any) of, interest on or Liquidated Damages with respect to, any
Notes (including the repayment of the Redemption Price on the Redemption Date).
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall, if required by law, mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA (S)
313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Notes
become listed on any stock exchange or automatic quotation system.
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A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Notes are listed.
SECTION 7.7. COMPENSATION AND INDEMNITY
The Company and the Guarantors jointly and severally agree to pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company and the Guarantors shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in accordance with this Indenture. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence, bad faith or willful misconduct on
the part of the Trustee, arising out of or in connection with the administration
of this trust, including the costs and expenses of enforcement of this Indenture
against the Company and the Guarantors (including this Section 7.7), and its
rights or duties hereunder, including the reasonable costs and expenses of
defending itself against any claim (whether asserted by any Holder, the Company,
any Guarantor or third party) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, but excluding any
franchise taxes imposed on the Trustee and any taxes based on the income of the
Trustee. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company and the
Guarantors shall defend the claim and the Trustee shall provide reasonable
cooperation at the Company's and the Guarantors' expense in the defense. The
Trustee may have separate counsel and the Company and the Guarantors shall pay
the reasonable fees and expenses of such counsel; provided, that the Company and
the Guarantors will not be required to pay such fees and expenses if they assume
the Trustee's defense and the Trustee is not advised in writing by counsel that
there is a conflict of interest between the Company and the Guarantors and the
Trustee in connection with such defense. The Company and the Guarantors need not
pay for any settlement made without their written consent, which consent shall
not be unreasonably withheld, delayed or conditioned. The Company and the
Guarantors need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a perfected lien prior to the Notes on
all assets held or collected by the Trustee, in its capacity as Trustee, except
assets held in trust to pay principal and premium, if any, of or interest on
particular Notes.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(iv) or (v) of this Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section 7.7
and any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's and the Guarantors' obligations pursuant
to Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the outstanding
Notes may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. No resignation of the Trustee and no appointment of a successor Trustee
pursuant to this Article VII shall become effective until the acceptance of
appointment by the successor Trustee under this Section 7.8. Within one year
after the successor Trustee takes office, the Holder or Holders of a majority in
principal amount of the Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 hereof have been paid, the retiring Trustee shall transfer all property held
by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7 hereof, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of the outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION
The Trustee shall at all times satisfy the requirements of TIA (S)
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus of
at least $25,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA (S) 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
The Company may elect to have Section 8.2, at the Company's option and
at any time, or Section 8.3, at the Company's option and at any time, of this
Indenture applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article VIII.
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantors shall be deemed
to have been discharged from their respective obligations with respect to all
outstanding Notes and Guarantees on the date the
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conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the Notes and
this Indenture shall cease to be of further effect as to all outstanding Notes
and Guarantees, except as to be deemed to be "outstanding" only for the purposes
of the Sections of this Indenture referred to in (a) and (b) below, and the
Company and the Guarantors shall be deemed to have satisfied all other of their
respective obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest (and Liquidated Damages, if any) on such Notes when such
payments are due from the trust described in Section 8.5, (b) the Company's
obligations with respect to such Notes under Sections 2.4, 2.6, 2.7, 2.10, 4.2,
8.5, 8.6 and 8.7 hereof and (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith. Subject to compliance with this Article VIII, the Company may
exercise its option under this Section 8.2 notwithstanding the prior exercise of
its option under Section 8.3 hereof with respect to the Notes.
SECTION 8.3. COVENANT DEFEASANCE
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16 and 4.17, Article V and
Article X hereof with respect to the outstanding Notes on and after the date the
conditions set forth below 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. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Notes, neither the Company nor any Guarantor need comply with and shall have any
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.1(iii), but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.1 hereof of the option applicable to this Section 8.3, and
subject to Section 8.4, Sections 6.1(vi) through 6.1(viii) hereof shall not
constitute Events of Default with respect to the Notes.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
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(a) (i) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee, in trust, for the benefit of the Holders of the
Notes, U.S. legal tender, U.S. Government Obligations, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium, if
any, and interest (and Liquidated Damages, if any) on such outstanding Notes on
the stated date for payment thereof or on the redemption date of such principal
or installment of principal of, premium, if any, or interest (and Liquidated
Damages, if any) on such Notes, and the Holders of Notes must have a valid,
perfected, exclusive security interest in such trust, (ii) in the case of Legal
Defeasance, 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 such 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; (iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to such Trustee confirming that the Holders of such 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; (iv) no Default or Event
of Default shall have occurred and be continuing on the date of such deposit or
insofar as Events of Default from bankruptcy or insolvency events are concerned,
at any time in the period ending on the 91st day after the date of deposit; (v)
such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under this Indenture or any other material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound; (vi) 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 such Notes over the other creditors of the Company or with the intent
of defeating, hindering, delaying or defrauding the other creditors of the
Company or others; and (vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an opinion of counsel, each stating that the
conditions precedent provided for in, in the case of the Officers' Certificate,
(i) through (vi) and, in the case of the opinion of counsel, clauses (i) (with
respect to the validity and perfection of the security interest), (ii), (iii)
and (v) of this paragraph, have been complied with and the Company shall have
delivered to the Trustee an Officers' Certificate, subject to such
qualifications and exceptions as the Trustee deems appropriate, to the effect
that, assuming no Holder of the Notes is an insider of the Company, the trust
funds will not be subject to the effect of any applicable federal bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
If the funds deposited with the Trustee to effect Covenant Defeasance
are insufficient to pay the principal of, premium, if any, and interest (and
Liquidated Damages, if any) on the Notes when due, then the obligations of the
Company and the Guarantors under this Indenture, will be revived and no such
defeasance will be deemed to have occurred.
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SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS
Subject to Section 8.6 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Paying Agent") pursuant to Section 8.4 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Paying Agent, in accordance with
the provisions of such Notes and this Indenture, to the payment, either directly
or through any other 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,
premium, if any, and interest (and Liquidated Damages, if any), but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Notes.
SECTION 8.6. REPAYMENT TO THE COMPANY
(a) Anything in this Article VIII to the contrary notwithstanding,
the Trustee or the Paying Agent shall deliver or pay to the Company from time to
time upon the request of the Company any cash or U.S. Government Obligations
held by it as provided in Section 8.4 hereof which in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest (and Liquidated Damages, if any) on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest (and
Liquidated Damages, if any) has become due and payable shall be paid to the
Company on its request (or if held by the Company, shall be discharged from such
trust); and the Holder of such Note shall thereafter look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall be not
less than 30 days nor more than 90 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 8.7. REINSTATEMENT
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If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or
Paying Agent is permitted to apply such money in accordance with Sections 8.2
and 8.3 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest (and Liquidated
Damages, if any) on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the cash or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency;
(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 make any other change that
does not materially adversely affect the rights of any Holder;
(3) to provide for collateral for or additional Guarantors of
the Notes;
(4) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the obligations of the Company,
herein and in the Notes in accordance with Article V;
(5) to comply with the TIA;
(6) to evidence the succession of another corporation to any
Guarantor and assumption by any such successor of the Guarantee of such
Guarantor (as set forth in Section 11.4) in accordance with Article XI;
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(7) to evidence the release of any Guarantor in accordance with
Article XI;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(9) to provide for the issuance and authorization of the
Exchange Notes.
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT OF
HOLDERS
Subject to Section 6.8 hereof, with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for such Notes), by written act of said Holders delivered to the Company and the
Trustee, the Company and the Guarantors, when authorized by Board Resolutions,
and the Trustee may amend or supplement this Indenture or enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders under
this Indenture or the Notes. Subject to Section 6.8, the Holder or Holders of
not less than a majority in aggregate principal amount of then outstanding Notes
may waive compliance by the Company or any Guarantor with any provision of this
Indenture or the Notes. Notwithstanding any of the above, however, no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holder of each outstanding Note affected thereby:
(1) change the Stated Maturity on any Note, or reduce the
principal amount thereof or the rate (or extend the time for payment) of
interest thereon or any premium payable upon the redemption thereof at the
Company's option, or change the place of payment where, or the coin or
currency in which, any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such principal, interest or premium payment thereon on or after the
Maturity Date (or, in the case of redemption at the Company's option, on or
after the Redemption Date), or reduce the Change of Control Purchase Price
or the Asset Sale Offer Price after the corresponding Asset Sale or Change
of Control has occurred or alter the provisions (including the defined
terms used therein) of Article III of this Indenture or Section 5 of the
Notes regarding the right of the Company to redeem the Notes as a right, or
at the Company's option or the provisions (including the deferred terms
used therein) of Article X in a manner adverse to the Holders; or
(2) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for any such amendment,
supplemental indenture or wavier provided for in this Indenture; or
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(3) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
under Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. COMPLIANCE WITH TIA
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note 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 or subsequent Holder may revoke the consent as to
his Note or portion of his Note by written notice to the Company or the Person
designated by the Company as the Person to whom consents should be sent if such
revocation is received by the Company or such Person before the date on which
the Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated
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proxies), shall be entitled to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (3) of Section 9.2 hereof, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Note who has consented to it and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note; provided, that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal and
premium of and interest (and Liquidated Damages, if any) on a Note, on or after
the respective dates set for such amounts to become due and payable expressed in
such Note, or to bring suit for the enforcement of any such payment on or after
such respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Note. The Trustee may
place an appropriate notation on the Note about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Any failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment,
supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture and that such amendment is the legal,
valid and binding obligation of the Company and the Guarantors party thereto,
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.3).
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF
CONTROL.
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(a) In the event that a Change of Control has occurred, each Holder
of Notes will have the right, at such Holder's option, pursuant to an offer
(subject only to conditions required by applicable law, if any) by the Company
(the "Change of Control Offer"), to require the Company to repurchase all or any
part of such Holder's Notes (provided, that the principal amount of such Notes
must be $1,000 or an integral multiple thereof) on a date (the "Change of
Control Purchase Date") that is no later than 60 days after the occurrence of
such Change of Control, at a cash price equal to 101% of the principal amount
thereof (the "Change of Control Purchase Price"), together with accrued and
unpaid interest and Liquidated Damages, if any, to the Change of Control
Purchase Date.
Notwithstanding the foregoing, the Company will 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 herein applicable to a Change of
Control Offer made by the Company, including any requirements to repay in full
all Indebtedness under the Credit Agreement, any Senior Debt or Senior Debt of
any Guarantor or obtains the consents of such lenders to such Change of Control
Offer as set forth in the following paragraph of this Section, and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
Notwithstanding anything in this Article X to the contrary, prior to
the commencement of a Change of Control Offer, but in any event within 30 days
following any Change of Control, the Company shall:
(1) (A) repay in full, and terminate all commitments under, all
Indebtedness under the Credit Agreement and all other Senior Debt the terms
of which require repayment upon a Change of Control or (B) offer to repay
in full, and terminate all commitments under, all Indebtedness under the
Credit Agreement and all such other Senior Debt and repay the Indebtedness
owed to each lender that has accepted such offer in full, or
(2) obtain the requisite consents under the Credit Agreement and
all such other Senior Debt to permit the repurchase of the Notes as
provided herein.
The Company's failure to comply with the preceding sentence shall
constitute an Event of Default described in Section 6.1(iii), but without giving
effect to the stated exceptions in such clause.
(b) In the event that, pursuant to this Section 10.1, the Company
shall be required to commence a Change of Control Offer, the Company shall
follow the procedures set forth in this Section 10.1 as follows:
(1) the Change of Control Offer shall commence within 30 days
following the occurrence of a Change of Control;
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(2) the Change of Control Offer shall remain open for 20
Business Days (the "Change of Control Offer Period") or such other period
as may be required by applicable law;
(3) upon the expiration of the Change of Control Offer Period,
the Company promptly shall purchase all of the tendered Notes at the Change
of Control Purchase Price;
(4) if the Change of Control Purchase Date is on or after an
interest payment Record Date and on or before the associated Interest
Payment Date, any accrued and unpaid interest (and Liquidated Damages, if
any) due on such Interest Payment Date will be paid to the Person in whose
name a Note is registered at the close of business on such Record Date on
the corresponding Interest Payment Date;
(5) the Company shall provide the Trustee and the Paying Agent
with written notice of the Change of Control Offer at least three Business
Days before the commencement of any Change of Control Offer; and
(6) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(A) that the Change of Control Offer is being
made pursuant to this Section 10.1 and that all Notes, or
portions thereof, tendered will be accepted for payment;
(B) the Change of Control Purchase Price
(including the amount of accrued but unpaid interest (and
Liquidated Damages, if any)) and the Change of Control
Purchase Date;
(C) that any Note, or portion thereof, not
tendered or accepted for payment will continue to accrue
interest (and Liquidated Damages, if any);
(D) that, unless the Company defaults in
depositing cash with the Paying Agent in accordance with
the penultimate paragraph of this Section 10.1, or such
payment is prevented for any reason, any Note, or portion
thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest (and
Liquidated Damages, if any) after the Change of Control
Purchase Date;
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(E) that Holders electing to have a Note, or
portion thereof, purchased pursuant to a Change of
Control Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the
Paying Agent (which may not for purposes of this Section
10.1, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the Company)
at the address specified in the notice prior to the
expiration of the Change of Control Offer;
(F) that Holders will be entitled to withdraw
their election, in whole or in part, if the Paying Agent
receives, prior to the expiration of the Change of Control
Offer, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Notes the
Holder is withdrawing and a statement containing a facsimile
signature and stating that such Holder is withdrawing his
election to have such principal amount of Notes purchased;
(G) that Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered; and
(H) a brief description of the events resulting in
such Change of Control.
On or before the Change of Control Purchase Date, the Company shall,
to the extent lawful:
(1) accept for payment Notes or portions thereof properly
tendered and not validly withdrawn pursuant to the Change of Control Offer,
(2) deposit with the Paying Agent an amount in cash sufficient
to pay the Change of Control Purchase Price (together with accrued and
unpaid interest and Liquidated Damages, if any), of all Notes so tendered,
and
(3) deliver to the Trustee the Notes so accepted together with
an Officers' Certificate listing the Notes or portions thereof being
purchased by the Company.
The Paying Agent promptly shall pay the Holders of Notes so accepted an amount
equal to the Change of Control Purchase Price (together with accrued and unpaid
interest and Liquidated Damages, if any), and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be delivered promptly by the Company to the Holder thereof. The Company publicly
will announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date.
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Any Change of Control Offer will be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and all other applicable federal
and state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Article X, the
Company's compliance or compliance by any of the Guarantors with such laws and
regulations shall not in and of itself cause a breach of their obligations under
this Article X.
ARTICLE XI
GUARANTEE
SECTION 11.1. GUARANTEE
(a) Each of the Guarantors shall, jointly and severally, irrevocably
and unconditionally guarantee (the "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 against the Company
and any other Guarantors of this Indenture, the Notes or the obligations of the
Company under this Indenture or the Notes, that: (x) the principal of and
premium (if any), and interest (and Liquidated Damages, if any) on the Notes
will be paid on a senior subordinated basis in full when due, subject to any
expressly stated applicable grace period, whether at the Maturity Date or
Interest Payment Date, by acceleration, call for redemption, upon a Change of
Control Offer, an Asset Sale Offer or otherwise; (y) all other obligations of
the Company to the Holders or the Trustee under this Indenture or the Notes
(including fees, expenses or other) will be promptly paid in full or performed,
all in accordance with the terms of this Indenture and the Notes; and (z) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, they will be paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a Change of Control Offer, an Asset Sale
Offer or otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, each Guarantor shall be obligated to pay the same before
failure so to pay becomes an Event of Default.
If the Company or a Guarantor defaults in the payment of the principal
of, premium, if any, or interest (or Liquidated Damages, if any) on, the Notes
when and as the same shall become due, whether upon maturity, acceleration, call
for redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, without the necessity of action by the Trustee or any Holder, each
Guarantor shall be required, jointly and severally, to promptly make such
payment in full.
The Company shall cause each Subsidiary that is formed or acquired
after the date hereof and each subsidiary that becomes a Subsidiary after the
date hereof, in each case other than Foreign Subsidiaries and Non-Guarantor
Subsidiaries, concurrently upon becoming a Subsidiary, to become a Guarantor
hereunder and execute and deliver to the Trustee a supplemental indenture as
provided pursuant to the terms of this Indenture.
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Notwithstanding anything herein to the contrary, if any of the
Company's Subsidiaries that is not a Guarantor guarantees any of the Company's
other Indebtedness or any other Indebtedness of any of its Subsidiaries, or the
Company or any of its Subsidiaries, individually or collectively, pledges,
directly or indirectly, more than 65% of the Voting Equity Interests of such
Subsidiary to a lender (other than pledges of Equity Interests of Non-Guarantor
Subsidiaries pursuant to the Credit Agreement), then such Subsidiary must become
a Guarantor in accordance with the terms hereof.
(b) Each Guarantor hereby agrees to the fullest extent permitted by
applicable law, that its obligations with regard to this Guarantee shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
delays in obtaining or realizing upon or failures to obtain or realize upon
collateral, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstances that might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives to the fullest extent permitted by applicable law diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company or right to require the prior disposition of the assets of the Company
to meet its obligations, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any Custodian or
similar official acting in relation to either the Company or such Guarantor, any
amount paid by either the Company or such Guarantor to the Trustee or such
Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.2 hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Company of the obligations guaranteed hereby, and (ii) in
the event of any declaration of acceleration of those obligations as provided in
Section 6.2 hereof, those obligations (whether or not due and payable) will
forthwith become due and payable by each of the Guarantors for the purpose of
this Guarantee.
(d) It is the intention of each Guarantor and the Company that the
obligations of each Guarantor hereunder shall be in, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations in
respect of the Guarantee would be annulled, avoided or subordinated to the
creditors of any Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that such
Guarantee was made by such Guarantor without fair consideration and, immediately
after giving effect thereto, such Guarantor was insolvent or unable to pay its
debts as they mature or left with an unreasonably small capital, then the
obligations of such Guarantor under such Guarantee shall be reduced by such
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court if and to the extent such reduction would result in the avoidance of such
annulment, avoidance or subordination; provided, however, that any reduction
pursuant to this paragraph shall be made in the smallest amount as is strictly
necessary to reach such result. For purposes of this paragraph, "fair
consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
SECTION 11.2. EXECUTION AND DELIVERY OF GUARANTEE
Each Guarantor shall, by virtue of such Guarantor's execution and
delivery of an indenture supplement pursuant to Section 11.1 hereof, be deemed
to have signed on each Note issued hereunder the notation of guarantee set forth
on the form of the Notes attached hereto as Exhibit A to the same extent as if
the signature of such Guarantor appeared on such Note.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
Section 11.1 on behalf of each Guarantor. The notation of a guarantee set forth
on any Note shall be null and void and of no further effect with respect to the
guarantee of any Guarantor which, pursuant to Section 11.4, is released from
such Guarantee.
SECTION 11.3. CERTAIN BANKRUPTCY EVENTS
Each Guarantor hereby covenants and agrees, to the fullest extent that
it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
SECTION 11.4. LIMITATION ON MERGER OF SUBSIDIARIES AND RELEASE OF GUARANTORS
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving Person) another Person unless, subject to the
provisions of the following paragraph and the other provisions of this
Indenture, (1) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of such
Guarantor pursuant to a supplemental indenture in form reasonably satisfactory
to the Trustee, pursuant to which such Person shall guarantee, on a senior
subordinated basis, all of such Guarantor's obligations under such Guarantor's
Guarantee on the terms set forth herein; and (2) immediately before and
immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred or be continuing. The provisions
of this Section 11.4 shall not apply to the merger of any Guarantors with and
into each other or with or into the Company.
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Upon the sale or disposition (whether by merger, stock purchase, Asset
Sale or otherwise) of a Guarantor (as an entity) to an entity which is not, and
is not required to become, a Guarantor, or the designation of a Subsidiary to
become an Unrestricted Subsidiary, or upon a Guarantor becoming a Non-Guarantor
Subsidiary which transaction is otherwise in compliance with this Indenture
(including, without limitation, the provisions of Section 4.14), such Guarantor
will be deemed released from its obligations under its Guarantee of the Notes
and such Guarantee will terminate; provided, however, that any such termination
shall occur only to the extent that all obligations of such Guarantor under all
of its guarantees of, and under all of its pledges of assets or other security
interests that secure, any of the Company's Indebtedness or any Indebtedness of
any other of the Company's Subsidiaries shall also terminate upon such release,
sale or transfer and none of such Guarantor's Equity Interests are pledged for
the benefit of any holder of any of the Company's Indebtedness or any
Indebtedness of any of the Company's Subsidiaries (other than pledges of Equity
Interests of Non-Guarantor Subsidiaries pursuant to the Credit Agreement).
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 in accordance with the applicable provisions of this
Indenture, the Trustee shall execute any documents reasonably required to
evidence the release of any Guarantor from its obligations under the Guarantee.
SECTION 11.5. SUBORDINATION OF GUARANTEES
The obligations of each Guarantor under its Guarantee pursuant to this
Article XI are subordinated in right of payment to the prior payment in full in
cash of all Senior Debt of such Guarantor on the same basis as the Notes are
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 Notes pursuant to this Indenture, including
Article XII hereof. In the event that the Trustee receives any Guarantor payment
at a time when such payment is prohibited by the foregoing sentence, such
Guarantor payment shall be held for the benefit of, and paid over and delivered
to, the holders of the Senior Debt of such Guarantor remaining unpaid, to the
extent necessary to pay in full all such Senior Debt. In the event that a Holder
receives any Guarantor payment at a time when such payment is prohibited by the
foregoing sentence, such Guarantor payment shall be held for the benefit of, and
paid over and delivered to, the holders of the Senior Debt of such Guarantor
remaining unpaid, to the extent necessary to pay in full all such Senior Debt.
Each Holder of a Note by its acceptance thereof (a) agrees to and
shall be bound by the provisions of this Section 11.5, (b) authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary and appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee as the Holder's attorney-in-fact for any and all such
purposes.
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ARTICLE XII
SUBORDINATION
SECTION 12.1. NOTES SUBORDINATED TO SENIOR DEBT
The Company and the Guarantors and each Holder, by its acceptance of
Notes, agree that (a) the payment of the principal of and interest (and
Liquidated Damages, if any) on the Notes and (b) any other payment in respect of
the Notes, including on account of the acquisition or redemption of the Notes by
the Company and the Guarantors (including, without limitation, pursuant to
Section 4.14 and Article X) is subordinated, to the extent and in the manner
provided in this Article XII, to the prior payment in full in cash or Cash
Equivalents of all Senior Debt of the Company and the Guarantors and that these
subordination provisions are for the benefit of the holders of Senior Debt.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
SECTION 12.2. NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES
(a) No payment (by set-off or otherwise) shall be made by or on
behalf of the Company or a Guarantor, as applicable, on account of the principal
of, premium, if any, or interest (or Liquidated Damages) on the Notes, or on
account of the redemption provisions of the Notes (including any repurchases of
Notes), for cash or property (other than Junior Securities), (i) upon the
maturity of any Senior Debt of the Company or such Guarantor, as applicable, by
lapse of time, acceleration (unless waived) or otherwise, unless and until all
principal of, premium, if any, and the interest on, and all other amounts owning
in respect of, such Senior Debt are first paid in full in cash or Cash
Equivalents (or such payment is duly provided for) or otherwise to the extent
holders accept satisfaction of amounts due by settlement in other than cash or
Cash Equivalents, or (ii) in the event of default in the payment of any
principal of, premium, if any, or interest on Senior Debt of the Company or such
Guarantor, as applicable, when it becomes due and payable, whether at maturity,
or at a date fixed for prepayment or by declaration or otherwise (a "Payment
Default"), unless and until such Payment Default has been cured or waived or
otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default other than a
Payment Default that permits the holders of any Designated Senior Debt to
declare such Designated Senior Debt to be due and payable and (ii) written
notice of such event of default given to the Company and the Trustee by the
holders of such Designated Senior Debt or their representative (a "Payment
Notice"), then, unless and until such event of default has been cured or waived
or otherwise has ceased to exist, no payment (by set-off or otherwise) may be
made by or on behalf of the Company or any Guarantor which is an obligor under
such Designated Senior Debt on account of the principal of, premium, if any, or
interest (or Liquidated Damages, if any) on the Notes, (including any
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repurchases of any of the Notes), or on account of the redemption provisions of
the Notes, in any such case, other than payments made with Junior Securities.
Notwithstanding the foregoing, unless the Designated Senior Debt in respect of
which such event of default exists has been declared due and payable in its
entirety within 179 days after the Payment Notice is delivered as set forth
above (the "Payment Blockage Period") (and such declaration has not been
rescinded or waived), at the end of the Payment Blockage Period, the Company and
the Guarantors shall be required, to pay all sums not previously paid to the
Holders of the Notes during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the Notes.
Any number of Payment Notices may be given; provided, however, that
(i) not more than one Payment Notice shall be given within a period of any 360
consecutive days, and (ii) no non-payment default that existed upon the date of
such Payment Notice or the commencement of such Payment Blockage Period (whether
or not such event of default is on the same issue of Designated Senior Debt)
shall be made the basis for the commencement of any other Payment Blockage
Period (for purposes of this provision, any subsequent action, or any subsequent
breach of any financial covenant for a period commencing after the expiration of
such Payment Blockage Period that, in either case, would give rise to a new
event of default, even though it is an event that would also have been a
separate breach pursuant to any provision under which a prior event of default
previously existed, shall constitute a new event of default).
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2 or Section
12.3, any payment or distribution of assets of the Company or any Guarantor
(other than Junior Securities) shall be received by the Trustee or the Holders
at a time when such payment or distribution is prohibited by the foregoing
provisions of this Section 12.2, such payment or distribution shall be held for
the benefit of the holders of such Senior Debt, and shall be paid or delivered
by the Trustee or such Holders, as the case may be, to the holders of such
Senior Debt remaining unpaid or unprovided for or to their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate principal amounts remaining unpaid on account
of such Senior Debt held or represented by each, for application to the payment
of all such Senior Debt remaining unpaid, to the extent necessary to pay or to
provide for the payment of all such Senior Debt in full in cash or Cash
Equivalents, or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt.
SECTION 12.3. NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT ON
DISSOLUTION, LIQUIDATION OR REORGANIZATION
Upon any distribution of assets of the Company or any Guarantor upon
any dissolution, winding up, total or partial liquidation or reorganization of
the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
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(a) the holders of all Senior Debt of the Company or such Guarantor,
as applicable, will first be entitled to receive payment in full in cash or Cash
Equivalents (or have such payment duly provided for) or otherwise to the extent
such holders accept satisfaction of amounts due by settlement in other than cash
or Cash Equivalents before the Holders are entitled to receive any payment on
account of the principal of, premium, if any, and interest (or Liquidated
Damages, if any) on the Notes (other than Junior Securities); and
(b) any payment or distribution of assets of the Company or such
Guarantor of any kind or character from any source, whether in cash, property or
securities (other than Junior Securities) to which the Holders or the Trustee on
behalf of the Holders would be entitled (by set-off or otherwise), except for
the subordination provisions contained in this Indenture, will be paid by the
liquidating trustee or agent or other Person making such a payment or
distribution directly to the holders of such Senior Debt or their representative
to the extent necessary to make payment in full (or have such payment duly
provided for) on all such Senior Debt remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt.
SECTION 12.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR
DEBT
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt of the Company or any Guarantor as provided herein, the Holders of
Notes shall be subrogated to the rights of the holders of such Senior Debt to
receive payments or distributions of assets of the Company applicable to the
Senior Debt until all amounts owing on the Notes shall be paid in full, and for
the purpose of such subrogation no such payments or distributions to the holders
of such Senior Debt by or on behalf of the Company or any Guarantor, or by or on
behalf of the Holders by virtue of this Article XII, which otherwise would have
been made to the Holders shall, as between the Company or any Guarantor and the
Holders, be deemed to be payment by the Company or any Guarantor or on account
of such Senior Debt, it being understood that the provisions of this Article XII
are and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of such Senior Debt, on the other
hand.
SECTION 12.5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS UNCONDITIONAL
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as between the Company and any
Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest (and Liquidated Damages, if any) on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of the
Company and the Guarantors other than the holders of the Senior Debt, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII, of the holders
of Senior Debt in respect of cash, property or securities of the Company and the
Guarantors received upon the exercise of any
99
such remedy. Notwithstanding anything to the contrary in this Article XII or
elsewhere in this Indenture or in the Notes, upon any distribution of assets of
the Company and the Guarantors referred to in this Article XII, the Trustee,
subject to the provisions of Sections 7.1 and 7.2, and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
Trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other Indebtedness of
the Company or any Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XII so long as such court has been apprised of the provisions
of, or the order, decree or certificate makes reference to, the provisions of
this Article XII.
Nothing in this Article XII shall apply to the claims of, or payments
to, the Trustee under or pursuant to Section 7.7.
SECTION 12.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF
NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment
written notice thereof from the Company or from one or more holders of Senior
Debt or from any representative therefor and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Sections 7.1 and 7.2,
shall be entitled in all respects conclusively to assume that no such fact
exists.
SECTION 12.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent the making of such deposit by the Company shall (i) not be in
contravention of any term or provision of the Credit Agreement and (ii) be
allocated for the payment of the Notes, shall not be subject to the
subordination provisions of this Article XII. Otherwise, any deposit of assets
with the Trustee or the Agent (whether or not in trust) for the payment of
principal of or interest on any Notes shall be subject to the provisions of
Sections 12.1, 12.2, 12.3 and 12.4; provided, that, if prior to one Business Day
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including without limitation, the payment
of either principal of or interest on any Note) the Trustee or such Paying Agent
shall not have received with respect to such assets the written notice provided
for in Section 12.6, then the Trustee or such Paying Agent shall have full power
and authority to receive such assets and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such date.
100
SECTION 12.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY, THE GUARANTORS OR HOLDERS OF SENIOR DEBT
No right of any present or future holders of any Senior Debt to
enforce the subordination provisions contained in this Article XII shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or any Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company or any
Guarantor with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The holders of
Senior Debt may extend, renew, modify or amend the terms of the Senior Debt or
any security therefor and release, sell or exchange such security and otherwise
deal freely with the Company and the Guarantors, all without affecting the
liabilities and obligations of the parties to this Indenture or the Holders. The
subordination provisions contained in this Indenture are for the benefit of the
holders from time to time of Senior Debt and may not be rescinded, cancelled,
amended or modified in any way other than any amendment or modification that
would not adversely affect the rights of any holder of Senior Debt or any
amendment or modification that is consented to by each holder of Senior Debt
that would be adversely affected thereby. The subordination provisions hereof
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Senior Debt is rescinded or must otherwise be
returned by any holder of the Senior Debt upon the insolvency, bankruptcy, or
reorganization of the Company, any Guarantor, or otherwise, all as though such
payment has not been made.
SECTION 12.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
NOTES.
Each Holder of the Notes by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company or
any Guarantor), the immediate filing of a claim for the unpaid balance of his
Notes in the form required in said proceedings and cause said claim to be
approved. In the event of any liquidation or reorganization of the Company or
any Guarantor in bankruptcy, insolvency, receivership or similar proceeding, if
the Holders of the Notes (or the Trustee on their behalf) have not filed any
claim, proof of claim, or other instrument of similar character necessary to
enforce the obligations of the Company or any Guarantor in respect of the Notes
at least thirty (30) days before the expiration of the time to file the same,
then in such event, but only in such event, the holders of the Senior Debt or a
representative on their behalf may, as an attorney-in-fact for such Holders,
file any claim, proof of claim, or other instrument of similar character on
behalf of such Holders. Nothing herein contained shall be deemed to authorize
the Trustee or the holders of Senior Debt or their representative to authorize
or consent to or accept or adopt on behalf of any Securityholder any plan
101
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their representative to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 12.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
SECTION 12.11. ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT
The failure to make a payment on account of principal of, premium, if
any, or interest (or Liquidated Damages, if any) on the Notes by reason of any
provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 6.1 or in any way
limit the rights of the Trustee or any Holder to pursue any other rights or
remedies with respect to the Notes.
SECTION 12.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR DEBT
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Notes or the Company, any Guarantor or
any other Person, cash, property or securities to which any holders of Senior
Debt shall be entitled by virtue of this Article XII or otherwise. Nothing in
this Section 12.12 shall affect the obligation of any other such Person to hold
such payment for the benefit of, and to pay such payment over to, the holders of
Senior Debt or their representative. In the event of any conflict between the
fiduciary duty of the Trustee to the Holders of Notes and to the holders of
Senior Debt, the Trustee is expressly authorized to resolve such conflict in
favor of the Holders.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA CONTROLS
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 13.2. NOTICES
102
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier, recognized overnight courier or registered or certified mail,
postage prepaid, return receipt requested, and if to the Company or any
Guarantor or the Trustee, addressed as follows:
if to the Company or any Guarantor:
DaVita Inc.
21250 Hawthorne Boulevard
Suite 800
Torrance, California 90503
Attention: Chief Financial Officer
Telecopy: (310) 792-0020
with a copy to:
Riordan & McKinzie
300 South Grand Avenue
Suite 2900
Los Angeles, California 90071
Attention: Roger Lustberg, Esq.
Telecopy: (213) 229-8550
if to the Trustee:
U.S. Trust Company of Texas, National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: John Stohlman, Corporate Trust Administration
Telecopy: (214) 754-1301
with a copy to:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1000
Attention: Patricia Gallagher, Corporate Trust Administration
Telecopy: (212) 852-1626
with a copy to:
Winston & Strawn
200 Park Avenue
New York, New York 10166
103
Attention: Jeffrey H. Elkin
Telecopy: (212) 294-4700
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when receipt is acknowledged, if
telecopied; the next Business Day after timely delivery to the courier, if sent
by a recognized overnight courier guaranteeing next day delivery; and five
Business Days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee and notice to the Trustee
shall not be deemed to have been given until actually received by the Trustee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS
Securityholders may communicate pursuant to TIA ss.312(b) with other
Securityholders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA ss.312(c).
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, such Person shall furnish to
the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been met.
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
104
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been met; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been met; provided, however,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.7. LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest (or Liquidated Damages, if any) shall accrue for the
intervening period.
SECTION 13.8. GOVERNING LAW
THIS INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND RULE 327(B) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES. EACH OF THE
COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS.
105
EACH OF THE COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY AND THE GUARANTORS IN ANY OTHER
JURISDICTION.
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.10. NO RECOURSE AGAINST OTHERS
No direct or indirect stockholder, partner, member, employee, manager,
officer or director, as such, past, present or future, of the Company or any
Guarantor, or any successor entity, shall have any personal liability in respect
of the obligations of the Company or the Guarantors under this Indenture or the
Notes solely by reason of his or its status as such stockholder, partner,
member, employee, manager, officer or director; provided, that this Section
13.10 shall in no way limit the obligation of any Guarantor pursuant to any
Guarantee of the Notes. Each Securityholder 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.
SECTION 13.11. SUCCESSORS
All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.12. DUPLICATE ORIGINALS
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
SECTION 13.13. SEVERABILITY
In case any one or more of the provisions in this Indenture or in the
Notes or in the Guarantees shall be held invalid, illegal or unenforceable, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining
106
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.15. QUALIFICATION OF INDENTURE
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Notes and printing this
Indenture and the Notes. The Trustee shall be entitled to receive from the
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.16. REGISTRATION RIGHTS
Certain Holders of the Notes may be entitled to certain registration
rights with respect to such Notes pursuant to, and subject to the terms of, the
Registration Rights Agreement.
SECTION 13.17. BENEFITS OF INDENTURE
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, the holders of Senior Debt
(subject to Section 11.5 and Article XII) and the Holders of the Notes, any
benefit or any legal or equitable right, remedy or claim under this Indenture or
the Notes.
107
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
DAVITA INC.
By:_____________________________________
Steven Udicious
Vice President, General Counsel and Secretary
S-1
GUARANTORS
----------
CARROLL COUNTY DIALYSIS FACILITY, INC.
CONTINENTAL DIALYSIS CENTER, INC.
CONTINENTAL DIALYSIS CENTER OF
SPRINGFIELD-FAIRFAX, INC.
DIALYSIS SPECIALISTS OF DALLAS, INC.
EAST END DIALYSIS CENTER, INC.
ELBERTON DIALYSIS FACILITY, INC.
FLAMINGO PARK KIDNEY CENTER, INC.
LINCOLN PARK DIALYSIS SERVICES, INC.
MASON-DIXON DIALYSIS FACILITIES, INC.
OPEN ACCESS SONOGRAPHY, INC.
PENINSULA DIALYSIS CENTER, INC.
RENAL TREATMENT CENTERS, INC.
RENAL TREATMENT CENTERS-CALIFORNIA, INC.
RENAL TREATMENT CENTERS-HAWAII, INC.
RENAL TREATMENT CENTERS-ILLINOIS, INC.
RENAL TREATMENT CENTERS-MID-ATLANTIC, INC.
RENAL TREATMENT CENTERS-NORTHEAST, INC.
RENAL TREATMENT CENTERS-SOUTHEAST, INC.
RENAL TREATMENT CENTERS-WEST, INC.
RTC-TEXAS ACQUISITION, INC.
S-2
RTC TN, INC.
TOTAL ACUTE KIDNEY CARE, INC.
TOTAL RENAL CARE, INC.
TOTAL RENAL CARE OF COLORADO, INC.
TOTAL RENAL LABORATORIES, INC.
TOTAL RENAL RESEARCH, INC.
TOTAL RENAL SUPPORT SERVICES, INC.
TRC OF NEW YORK, INC.
TRI-CITY DIALYSIS CENTER, INC.
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary of each of the above
TRC WEST, INC.
By:___________________________________
David Manheim
Vice President and Secretary
RTC HOLDINGS, INC.
By:___________________________________
Steven J. Udicious
President
S-3
BEVERLY HILLS DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:_________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
CRESCENT CITY DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:_________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
HOUSTON KIDNEY CENTER/TOTAL RENAL CARE
INTEGRATED SERVICE NETWORK LIMITED PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:_________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-4
KENNER REGIONAL DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
SUNRISE DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TOTAL RENAL CARE/PERALTA RENAL CENTER
PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By __________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-5
TOTAL RENAL CARE/PIEDMONT DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TOTAL RENAL CARE TEXAS LIMITED PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TRC-INDIANA, LLC
By: TOTAL RENAL CARE, INC.
Its: Manager
By:__________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TOTAL RENAL CARE OF UTAH, L.L.C.
By: TOTAL RENAL CARE, INC.
By:__________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-6
U.S. TRUST COMPANY OF TEXAS, NATIONAL ASSOCIATION
as Trustee
By:_____________________________________
Name:
Title: Authorized Officer
S-7
EXHIBIT A
[FORM OF NOTE]
DAVITA INC.
9 1/4% [SERIES A] [SERIES B]/1/ SENIOR SUBORDINATED NOTE
DUE 2011
CUSIP No.: __________
No. $________________
DaVita Inc., a Delaware corporation (hereinafter called the "Company",
which term includes any successors under the Indenture hereinafter referred to),
for value received, hereby promises to pay to __________, or registered assigns,
the principal sum of __________ Dollars, on April 15, 2011.
Interest Payment Dates: April 15 and October 15; commencing October
15, 2001.
Record Dates: April 1 and October 1.
Reference is made to the further provisions of this Note on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
_____________________________
/1/ Series A should be replaced with Series B in the Exchange Notes.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
DAVITA INC.
a Delaware corporation
By: -------------------------------------------
Name: Richard K. Whitney
Title: Chief Financial Officer
By: -------------------------------------------
Name: Steven J. Udicious
Title: Vice President, General Counsel and
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the within-mentioned Indenture.
U.S. TRUST COMPANY OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By: -------------------------------------------
Authorized Signatory
Dated: April 11, 2001
A-2
(Back of Note)
9 1/4% [Series A] [Series B]/2/ Senior Subordinated Notes due 2011
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.]/3/
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.]/4/
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED
___________________________
/2/Series A should be replaced with Series B in the Exchange Notes.
/3/To be included only on Global Notes deposited with DTC as Depositary.
/4/To be included only on Global Notes deposited with DTC as Depositary.
A-3
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST
DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND
SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE.]/5/
[THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (1) THROUGH (5) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]/6/
______________________
/5/To be included only on Reg S Temporary Global Notes.
/6/To be included only on Transfer Restricted Notes.
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Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. DaVita Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 9 1/4% per
annum from April 11, 2001 until maturity and shall pay the Liquidated Damages,
if any, payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on April 15 and October 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or provided for or, if no interest has been
paid, from the Issue Date; provided, that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a Record Date
(defined below) referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be October
15, 2001. The Company shall pay interest on overdue principal and premium, if
any, from time to time on demand at the rate then in effect; it shall pay
interest on overdue installments of interest and Liquidated Damages, if any,
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the April 1 or
October 1 next preceding the Interest Payment Date (each a "Record Date"), even
if such Notes are cancelled after such Record Date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture (as
defined below) with respect to defaulted interest. The Notes will be payable as
to principal, premium, interest and Liquidated Damages, if any, at the office or
agency of the Company maintained in the Borough of Manhattan, the City and State
of New York for such purpose, or, at the option of the Company, payment of
interest and Liquidated Damages, if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided,
that payment by wire transfer of immediately available funds to an account
within the United States will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on all Global Notes. 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. Trust Company of
Texas, 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. Indenture. The Company issued the Notes under an Indenture dated
as of April 11, 2001 ("Indenture") among the Company, the Guarantors party
thereto and the
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Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms.
5. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 5, the
Company shall not have the option to redeem the Notes pursuant to this Section 5
prior to April 15, 2006. The Notes will be redeemable for cash at the option of
the Company, in whole or in part, at any time on or after April 15, 2006, upon
not less than 30 days nor more than 60 days prior notice mailed by first class
mail to each Holder at its last registered address, at the following redemption
prices (expressed as percentages of the principal amount) if redeemed during the
12-month period commencing April 15, of the years indicated below, in each case
(subject to the right of Holders of record on a Record Date to receive the
corresponding interest due (and the corresponding Liquidated Damages, if any) on
the corresponding Interest Payment Date that is on or prior to such Redemption
Date) together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the Redemption Date:
Year Percentage
---- ----------
2006............................................ 104.625%
2007............................................ 103.083%
2008............................................ 101.542%
2009 and thereafter............................. 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
5, at any time on or prior to April 15, 2004, upon any Public Equity Offering,
up to 35% of the aggregate principal amount of the Notes issued under the
Indenture may be redeemed at the option of the Company within 90 days of such
Public Equity Offering, on not less than 30 days, but not more than 60 days,
prior notice to each Holder of the Notes to be redeemed, with cash from the Net
Cash Proceeds of such Public Equity Offering, at a redemption price equal to
109.25% of the principal amount thereof (subject to the right of Holders of
record on a Record Date to receive the corresponding interest (and the
corresponding Liquidated Damages, if any) due on the Interest Payment Date that
is on or prior to such Redemption Date) together with accrued and unpaid
interest and Liquidated Damages, if any, thereon to the Redemption Date;
provided, that immediately following such redemption not less than 65% of the
aggregate principal amount of the Notes originally issued pursuant to the
Indenture remain outstanding.
(c) Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days prior to the Redemption Date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000, unless all of the Notes held by a
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Holder are to be redeemed. On and after the Redemption Date interest (and
Liquidated Damages, if any) ceases to accrue on Notes or portions thereof called
for redemption unless the Company defaults in such payments due on the
Redemption Date.
6. Mandatory Redemption. The Company shall not be required to make
mandatory redemption payments with respect to the Notes. The Notes shall not
have the benefit of any sinking fund.
7. Offers to Purchase.
(a) Change of Control. In the event that a Change of Control has
occurred, each Holder of Notes will have the right, at such Holder's option,
pursuant to an offer (subject only to conditions required by applicable law, if
any) by the Company (the "Change of Control Offer"), to require the Company to
repurchase all or any part of such Holder's Notes (provided, that the principal
amount of such Notes must be $1,000 or an integral multiple thereof) on a date
(the "Change of Control Purchase Date") that is no later than 60 days after the
occurrence of such Change of Control, at a cash price equal to 101% of the
principal amount thereof (the "Change of Control Purchase Price"), together with
accrued and unpaid interest and Liquidated Damages, if any, to the Change of
Control Purchase Date. The Change of Control Offer shall be made within 30 days
following a Change of Control and shall remain open for 20 Business Days
following its commencement (the "Change of Control Offer Period"). Upon
expiration of the Change of Control Offer Period, the Company promptly shall
purchase all Notes properly tendered in response to the Change of Control Offer.
Prior to the commencement of a Change of Control Offer, but in any
event within 30 days following any Change of Control, the Company shall (i)(a)
repay in full, and terminate all commitments under, all Indebtedness under the
Credit Agreement and all other Senior Debt, the terms of which require repayment
upon a Change of Control or (b) offer to repay in full, and terminate all
commitments under, all Indebtedness under the Credit Agreement and all such
other Senior Debt and repay the Indebtedness owed to each lender that has
accepted such offer in full or (ii) obtain the requisite consents under the
Credit Agreement and all such other Senior Debt to permit the repurchase of the
Notes as provided herein. The Company's failure to comply with the preceding
sentence shall constitute an Event of Default described in Section 6.1(iii), but
without giving effect to the stated exceptions in such clause.
On or before the Change of Control Purchase Date, the Company shall,
to the extent lawful, (i) accept for payment Notes or portions thereof properly
tendered and not validly withdrawn pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount in cash sufficient to pay the Change of
Control Purchase Price (together with accrued and unpaid interest and Liquidated
Damages, if any), of all Notes so tendered and (iii) deliver to the Trustee the
Notes so accepted together with an Officers' Certificate listing the Notes or
portions thereof being purchased by the Company. The Paying Agent
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promptly shall pay the Holders of Notes so accepted an amount equal to the
Change of Control Purchase Price (together with accrued and unpaid interest and
Liquidated Damages, if any), and the Trustee promptly will authenticate and
deliver to such Holders a new Note equal in principal amount to any unpurchased
portion of the Note surrendered. Any Notes not so accepted will be delivered
promptly by the Company to the Holder thereof. The Company publicly will
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Purchase Date.
(b) Asset Sale. The Company and the Guarantors shall not, and neither
the Company nor the Guarantors shall permit any of their respective Subsidiaries
to, in one or a series of related transactions, convey, sell, lease, transfer,
assign or otherwise dispose of, directly or indirectly, any of their property,
business or assets, including by merger or consolidation (in the case of a
Guarantor or a Subsidiary of the Company), and including any sale or other
transfer or issuance of any Equity Interests of any Subsidiary or Unrestricted
Subsidiary of the Company, whether by the Company or one of its Subsidiaries or
Unrestricted Subsidiaries or through the issuance, sale or transfer of Equity
Interests by a Subsidiary or Unrestricted Subsidiary of the Company, and
including any sale and leaseback transaction (any of the foregoing, an "Asset
Sale"), unless (l)(a) the Net Cash Proceeds therefrom (the "Asset Sale Offer
Amount") are applied within 365 days after the date of such Asset Sale, to the
extent not applied in accordance with paragraph (b) below, to the (i) optional
redemption of the Notes in accordance with the terms of the Indenture and other
Indebtedness of the Company ranking on a parity with the Notes and with similar
provisions requiring the Company to redeem such Indebtedness with the proceeds
from such Asset Sale, pro rata in proportion to the respective principal amounts
(or accreted values in the case of Indebtedness issued with an original issue
discount) of the Notes and such other Indebtedness then outstanding or (ii)
repurchase of the Notes and such other Indebtedness ranking on a parity with the
Notes and with similar provisions requiring the Company to make an offer to
purchase such Indebtedness with the proceeds from such Asset Sale pursuant to a
cash offer (subject only to conditions required by applicable law, if any) (pro
rata in proportion to the respective principal amounts (or accreted values in
the case of Indebtedness issued with an original issue discount) of the Notes
and such other Indebtedness then outstanding) (the "Asset Sale Offer") at a
purchase price of 100% of principal amount (or accreted value in the case of
Indebtedness issued with an original issue discount) (the "Asset Sale Offer
Price") together with accrued and unpaid interest and Liquidated Damages, if
any, to the date of payment, made within 335 days of such Asset Sale or (b)
within 365 days following such Asset Sale, the Asset Sale Offer Amount is (i)
invested in assets and property (other than notes, bonds, obligations and
securities, except in connection with the acquisition of a Wholly Owned
Subsidiary that immediately becomes a Guarantor in a Related Business) which
will constitute or be a part of a Related Business of the Company or such
Subsidiary (if it continues to be a Subsidiary) immediately following such
transaction or (ii) used to retire Senior Debt and to permanently reduce the
amount of such Senior Debt outstanding on the Issue Date or permitted pursuant
to paragraphs (b) and (c) of Section 4.11 of the Indenture (including that in
the case of a revolver or similar arrangement that makes credit available, such
commitment is so permanently reduced by
A-8
such amount); provided, however, that with respect to any Asset Sale occurring
during 2001, the Asset Sale Offer Amount received therefrom may be applied as
provided in (a) or (b) above at any time prior to December 31, 2002, and any
Asset Sale Offer made in accordance with (a)(ii) above may be made at any time
prior to December 1, 2002, (2) at least 75% of the total consideration for such
Asset Sale or series of related Asset Sales consists of cash or Cash
Equivalents, provided, that up to one-third of such 75% may consist of notes or
other obligations received by the Company or such Subsidiary from such
transferee that are converted by the Company or such Subsidiary into cash (to
the extent of the cash received) within 365 days after receipt, which shall
constitute Net Cash Proceeds attributable to the original Asset Sale for which
such notes or other obligations were received, and provided further that any
Indebtedness of the Company or any Subsidiary (as shown on the Company's or such
Subsidiary's most recent balance sheet), other than Subordinated Indebtedness,
that is assumed by the transferee of any such assets shall constitute cash for
purposes hereof, so long as the Company and all of its Subsidiaries are fully
and unconditionally released therefrom, and (3) the Company or such Subsidiary,
as applicable, receives fair market value for such Asset Sale, such
determination to be made in good faith by the Board of Directors of the Company
for Asset Sales exceeding $25,000,000. Pending the final application of any Net
Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or
otherwise invest the Net Cash Proceeds in any manner that is not prohibited by
the Indenture.
An acquisition of Notes pursuant to an Asset Sale Offer may be
deferred until the accumulated Net Cash Proceeds from Asset Sales not applied to
the uses and in the time periods set forth in 1(a)(i) or 1(b) above (the "Excess
Proceeds") exceeds $10,000,000 and that each Asset Sale Offer shall remain open
for at least 20 Business Days following its commencement (the "Asset Sale Offer
Period"). Upon expiration of the Asset Sale Offer Period, the Company shall
apply the Asset Sale Offer Amount plus an amount equal to accrued and unpaid
interest and Liquidated Damages, if any, to the purchase of all Indebtedness
properly tendered in accordance with the provisions hereof (on a pro rata basis
if the Asset Sale Offer Amount is insufficient to purchase all Indebtedness so
tendered) at the Asset Sale Offer Price (together with accrued interest and
Liquidated Damages, if any). To the extent that the aggregate amount of Notes
and such other pari passu Indebtedness tendered pursuant to an Asset Sale Offer
is less than the Asset Sale Offer Amount, the Company may use any remaining Net
Cash Proceeds for general corporate purposes as otherwise permitted by the
Indenture and following the consummation of each Asset Sale Offer the Excess
Proceeds amount shall be reset to zero.
8. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. 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 and the Registrar need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part.
A-9
Also, they need not exchange or register the transfer of any Notes for a period
of 15 days before a selection of Notes to be redeemed or during the period
between a Record Date and the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Notes or the Guarantees may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes, and any existing Default or compliance with any
provision of the Indenture, the Notes or the Guarantees may be waived with the
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture, the Notes or the Guarantees may be amended or supplemented as set
forth in Section 9.1 of the Indenture to (a) cure any ambiguity, defect or
inconsistency, (b) add to the covenants of the Company or the Guarantors for the
benefit of the Holders, or surrender any right or power conferred upon the
Company or the Guarantors by the Indenture or herein or make any other change
that does not materially adversely affect the rights of any Holder; (c) provide
for collateral for or additional Guarantors of the Notes; (d) evidence the
succession of another Person to the Company, and the assumption by any such
successor of the obligations of the Company, herein and in the Indenture in
accordance with the terms of the Indenture; (e) comply with the TIA; (f)
evidence the succession of another corporation to any Guarantor and assumption
by any such successor of the Guarantee of such Guarantor pursuant to the
Indenture; (g) evidence the release of any Guarantor; (h) evidence and provide
for the acceptance of appointment of a successor Trustee with respect to the
Notes; (i) or provide for the issuance and authorization of the Exchange Notes.
11. Defaults and Remedies. The Indenture provides that each of the
following constitutes an Event of Default:
(i) the Company's failure to pay any installment of interest (or
Liquidated Damages, if any) on the Notes as and when the same becomes due and
payable and the continuance of any such failure for 30 days,
(ii) the Company's failure to pay all or any part of the principal,
or premium, if any, on the Notes when and as the same becomes due and payable at
maturity, redemption, by acceleration or otherwise, including, without
limitation, payment of the Change of Control Purchase Price or the Asset Sale
Offer Price on Notes validly tendered and not properly withdrawn pursuant to a
Change of Control Offer or Asset Sale Offer, as applicable,
(iii) the Company's failure or the failure by any of the Company's
Subsidiaries to observe or perform any other covenant or agreement contained in
the Notes or the Indenture and, except for the provisions under Section 4.3 and
Article V of the
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Indenture the continuance of such failure for a period of 30 days after written
notice is given to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in aggregate principal amount of the Notes
outstanding,
(iv) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its Significant
Subsidiaries under any bankruptcy or similar law, and such decree or order shall
have continued undischarged and unstayed for a period of 60 days; or a decree,
judgment or order of a court of competent jurisdiction appointing a receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency for the Company,
any of its Significant Subsidiaries, or any substantial part of the property of
any such Person, or for the winding up or liquidation of the affairs of any such
Person, shall have been entered, and such decree, judgment, or order shall have
remained in force undischarged and unstayed for a period of 60 days;
(v) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any bankruptcy or similar law or
similar statute, or shall consent to the filing of any such petition, or shall
consent to the appointment of a custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of it or any substantial part of its assets
or property, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due, fail generally to pay its debts as they become due, or take any corporate
action in furtherance of any of the foregoing;
(vi) a default in the Company's Indebtedness or the Indebtedness of
any of its Subsidiaries with an aggregate amount outstanding in excess of
$10,000,000 (a) resulting from the failure to pay principal at the stated
maturity of such Indebtedness or (b) as a result of which the maturity of such
Indebtedness has been accelerated prior to its stated maturity,
(vii) final unsatisfied judgments not covered by insurance
aggregating in excess of $5,000,000, at any one time rendered against the
Company or any of its Subsidiaries and not stayed, bonded or discharged within
60 days, and
(viii) any Guarantee of a Guarantor ceases to be in full force and
effect or becomes unenforceable or invalid or is declared null and void or any
Guarantor denies or disaffirms its obligations under its Guarantee, in any case,
other than in accordance with the terms of the Guarantee and the Indenture.
12. Subordination. The Notes and the Guarantees are subordinated in
right of payment, to the extent and in the manner provided in Article XII and
Section 11.5 of the Indenture, to the prior payment in full of all Senior Debt.
The Company and the
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Guarantors agree, and each Holder by accepting a Note consents and agrees, to
the subordination provided in the Indenture and authorizes the Trustee to give
it effect.
13. 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.
14. No Recourse Against Others. No direct or indirect stockholder,
partner, member, employee, manager, officer or director, as such, past, present
or future, of the Company or any Guarantor, or any successor entity, shall have
any personal liability in respect of the obligations of the Company or the
Guarantors under the Notes or the Indenture solely by reason of his or its
status as such stockholder, partner, member, employee, manager, officer or
director; provided, that this Section 14 shall in no way limit the obligation of
any Guarantor pursuant to any Guarantee of the Notes. Each Securityholder 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.
15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. 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).
17. Additional Rights of Holders of Transfer Restricted Notes./7/ In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, among the
Company, the Guarantors and the Initial Purchasers (the "Registration Rights
Agreement").
18. 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, and any such redemption shall not
be affected by any defect in or omission of such numbers.
__________________________
/7/To be included only on Transfer Restricted Notes.
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19. Notation of Guarantee. As more fully set forth in the Indenture,
each of the Guarantors from time to time, in accordance with the provisions of
the Indenture, shall irrevocably and unconditionally and jointly and severally
guarantee, in accordance with Article XI of the Indenture, to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (a) the principal of, and premium, if any,
Liquidated Damages, if any, and interest on the Notes will be paid on a senior
subordinated basis in full when due, whether at the Maturity Date or Interest
Payment Date, by acceleration, call for redemption, upon a Change of Control
Offer, upon an Asset Sale Offer or otherwise; (b) all other obligations of the
Company to the Holders or the Trustee under the Indenture or under the Notes
(including fees, expenses or other) will be promptly paid in full or performed,
all in accordance with the terms of the Indenture and the Notes; and (c) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset
Sale Offer or otherwise. The obligations of each Guarantor under its Guarantee
are subordinated in right of payment to the prior payment in full of all
obligations in respect of Senior Debt of such Guarantor as set forth in Section
11.5 and Article XII of the Indenture and shall cease to apply, and shall be
null and void, with respect to any Guarantor who, pursuant to Article XI of the
Indenture, is released from its Guarantee or whose Guarantee otherwise ceases to
be applicable pursuant to the terms of the Indenture.
When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor will be released from those
obligations.
20. Governing Law. THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND RULE 327(B) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
DaVita Inc.
21250 Hawthorne Boulevard
Suite 800
Torrance, California 90503
Attention: General Counsel
Telephone No.: (310) 792-2600
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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*
________________________________________________________________________________
*NOTICE: The Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) in such other guarantee program acceptable to the Trustee.
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Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or 10.1 of the Indenture, check the box below:
[_] Section 4.14 [_] Section 10.1
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.14 or Section 10.1 of the Indenture, state the
amount you elect to have purchased (in denominations of $1,000 only, except if
you have elected to have all of your Notes purchased): $___________
Date:_________________ Your Signature: _________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:______________
Signature Guarantee*
________________________________________________________________________________
*NOTICE: The Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) in such other guarantee program acceptable to the Trustee.
A-15
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/8/
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:
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ---------------- ---------------- ---------------- ------------- ---------
______________________________
/8/This should be included only if the Note is issues in global form
A-16
GUARANTEE
The Guarantors listed below (hereinafter referred to as the
"Guarantors," which term includes any successors or assigns under the Indenture,
dated the date hereof, among the Guarantors, the Company (defined below) and
U.S. Trust Company of Texas, National Association, as trustee (the "Indenture")
and any additional Guarantors), jointly and severally, irrevocably and
unconditionally guarantee, in accordance with Article XI of the Indenture: (i)
the due and punctual payment on a senior subordinated basis of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on the 9 1/4%
Senior Subordinated Notes due 2011 (the "Notes") of DaVita Inc., a Delaware
corporation (the "Company"), when due, subject to any expressly stated
applicable grace period, whether at the Maturity Date, or Interest Payment Date,
by acceleration, call for redemption, upon a Change of Control Offer, upon an
Asset Sale Offer or otherwise; (ii) the due and punctual payment or performance
of all other obligations of the Company, to the Holders or the Trustee all in
accordance with the terms set forth in Article XI of the Indenture; (iii) 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
maturity, by acceleration, call for redemption, upon a Change of Control Offer,
upon an Asset Sale Offer or otherwise; and (iv) the payment of any and all costs
and expenses (including attorneys' fees) incurred by the Trustee in enforcing
any rights under this Guarantee.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
XI of the Indenture and reference is hereby made to such Indenture for the
precise terms of this Guarantee.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly subordinated to
Senior Debt of the Guarantor as set forth in Section 11.5 and Article XII of the
Indenture and reference is hereby made to such Section for the precise terms of
such subordination.
No direct or indirect stockholder, partner, member, employee, manager,
officer or director, as such, past, present or future, of any of the Guarantors,
or any successor entity, shall have any personal liability in respect of the
obligations of any of the Guarantors under the Guarantees or the Indenture
solely by reason of his or its status as such stockholder, partner, member,
employee, manager, officer or director; provided, that this provision shall in
no way limit the obligation of any Guarantor pursuant to this Guarantee.
A-17
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and Indenture or until released or legally defeased in accordance with the
Indenture 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 herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The obligations of each Guarantor under its Guarantee shall be limited
to the extent necessary to insure that it does not constitute a fraudulent
conveyance under applicable law.
THE TERMS OF ARTICLES XI AND XII OF THE INDENTURE ARE INCORPORATED
HEREIN BY REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
A-18
IN WITNESS WHEREOF, each of the Guarantors has caused this instrument
to be duly executed.
Dated: April 11, 2001
GUARANTORS
----------
CARROLL COUNTY DIALYSIS FACILITY, INC.
CONTINENTAL DIALYSIS CENTER, INC.
CONTINENTAL DIALYSIS CENTER OF
SPRINGFIELD-FAIRFAX, INC.
DIALYSIS SPECIALISTS OF DALLAS, INC.
EAST END DIALYSIS CENTER, INC.
ELBERTON DIALYSIS FACILITY, INC.
FLAMINGO PARK KIDNEY CENTER, INC.
LINCOLN PARK DIALYSIS SERVICES, INC.
MASON-DIXON DIALYSIS FACILITIES, INC.
OPEN ACCESS SONOGRAPHY, INC.
PENINSULA DIALYSIS CENTER, INC.
RENAL TREATMENT CENTERS, INC.
RENAL TREATMENT CENTERS-CALIFORNIA, INC.
RENAL TREATMENT CENTERS-HAWAII, INC.
RENAL TREATMENT CENTERS-ILLINOIS, INC.
RENAL TREATMENT CENTERS-MID-ATLANTIC, INC.
A-19
RENAL TREATMENT CENTERS-NORTHEAST, INC.
RENAL TREATMENT CENTERS-SOUTHEAST, INC.
RENAL TREATMENT CENTERS-WEST, INC.
RTC-TEXAS ACQUISITION, INC.
RTC TN, INC.
TOTAL ACUTE KIDNEY CARE, INC.
TOTAL RENAL CARE, INC.
TOTAL RENAL CARE OF COLORADO, INC.
TOTAL RENAL LABORATORIES, INC.
TOTAL RENAL RESEARCH, INC.
TOTAL RENAL SUPPORT SERVICES, INC.
TRC OF NEW YORK, INC.
TRI-CITY DIALYSIS CENTER, INC.
By:_____________________________________
Steven Udicious
Vice President, General Counsel and
Secretary of each of the above
TRC WEST, INC.
By:_____________________________________
David Manheim
Vice President and Secretary
A-20
RTC HOLDINGS, INC.
By:_____________________________________
Steven J. Udicious
President
BEVERLY HILLS DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
CRESCENT CITY DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
A-21
HOUSTON KIDNEY CENTER/TOTAL RENAL CARE
INTEGRATED SERVICE NETWORK LIMITED PART-
NERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
KENNER REGIONAL DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
SUNRISE DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
A-22
TOTAL RENAL CARE/PERALTA RENAL CENTER
PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
TOTAL RENAL CARE/PIEDMONT DIALYSIS
PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
TOTAL RENAL CARE TEXAS LIMITED
PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
A-23
TRC-INDIANA, LLC
By: TOTAL RENAL CARE, INC.
Its: Manager
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
TOTAL RENAL CARE OF UTAH, L.L.C.
By: TOTAL RENAL CARE, INC.
By:__________________________________
Steven Udicious
Vice President, General Counsel
and Secretary
A-24
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
DaVita Inc.
21250 Hawthorne Boulevard
Torrance, California 90503
Attention: General Counsel
U.S. Trust Company of Texas, National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Administration
Re: 9 1/4% Senior Subordinated Notes due 2011
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of April 11, 2001
(the "Indenture"), among DaVita Inc., as issuer (the "Company"), the Guarantors
party thereto and U.S. Trust Company of Texas, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture. ______________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest[s] in such Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Note[s] or interest[s] (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any
B-1
applicable blue sky securities laws of any State of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial
interest in the Regulation S Global Note or a Definitive Note pursuant to
Regulation S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed Transfer is being made prior to the
expiration of the Distribution Compliance Period, the Transfer is not being made
to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser) and the interest transferred will be held immediately
thereafter through Euroclear or Clearstream. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.
3. [_] Check and complete if Transferee will take delivery of a
beneficial interest in a Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any State of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [_] Such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act; or
B-2
(b) [_] Such Transfer is being effected to the Company or
a subsidiary thereof; or
(c) [_] Such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act; or
(d) [_] such Transfer is being effected to an
Institutional Accredited and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies
that it has not engaged in any general solicitation within the
meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Note
and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in a form
of Exhibit D to the Indenture and (2) if such Transfer is in respect
of a principal amount of Notes at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification and provided to the Company, which has confirmed its
acceptability), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the Definitive Note
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Definitive Notes and in the
Indenture and the Securities Act.
4. [_] Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [_] Check if Transfer is Pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture and the Securities Act.
B-3
(b) [_] Check if Transfer is Pursuant to Regulation S. (i)
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture and the Securities Act.
(c) [_] Check if Transfer is Pursuant to Other Exemption.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive Notes
and in the Indenture.
B-4
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
_______________________________ Dated: ____________________________
[Insert Name of Transferor]
By: ____________________________
Name:
Title:
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _______), or
(ii) [_] Regulation S Global Note (CUSIP _______), or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _______), or
(ii) [_] Regulation S Global Note (CUSIP _______), or
(iii) [_] Unrestricted Global Note (CUSIP _______); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-6
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
DaVita Inc.
21250 Hawthorne Boulevard
Torrance, California 90503
Attention: General Counsel
U.S. Trust Company of Texas, National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Administration
Re: 9 1/4% Senior Subordinated Notes due 2011
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of April 11,
2001 (the "Indenture"), between DaVita Inc., as issuer (the "Company"), the
Guarantors party thereto and U.S. Trust Company of Texas, National Association,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest[s] in such Note[s] specified herein, in the principal amount
of $____________ in such Note[s] or interest[s] (the "Exchange"). In connection
with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
Beneficial Interests in an Unrestricted Global Note.
(a) [_] Check if Exchange is from beneficial
interest in a Restricted Global Note to beneficial interest in an Unrestricted
Global Note. In connection with the Exchange of the Owner's beneficial interest
in a Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own
C-1
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any State of the United States.
(b) [_] Check if Exchange is from beneficial
interest in a Restricted Global Note to Unrestricted Definitive Note. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i)
the Definitive Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
State of the United States.
(c) [_] Check if Exchange is from Restricted
Definitive Note to beneficial interest in an Unrestricted Global Note. In
connection with the Owner's Exchange of a Restricted Definitive Note for a
beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any State of the United States.
(d) [_] Check if Exchange is from Restricted
Definitive Note to Unrestricted Definitive Note. In connection with the Owner's
Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note,
the Owner hereby certifies (i) the Unrestricted Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions
C-2
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
State of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes.
(a) [_] Check if Exchange is from beneficial interest in
a Restricted Global Note to Restricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [_] Check if Exchange is from Restricted Definitive
Note to beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the: [CHECK ONE] 144A Global Note or Regulation S Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any State of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
C-3
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
- --------------------------
[Insert Name of Owner]
By:_______________________
Name:
Title:
Dated:________________
C-4
EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
DaVita Inc.
21250 Hawthorne Boulevard
Torrance, California 90503
Attention: General Counsel
U.S. Trust Company of Texas, National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Administration
Re: 9 1/4% Senior Subordinated Notes due 2011
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of April 11,
2001 (the "Indenture"), between DaVita Inc., as issuer (the "Company"), the
Guarantors party thereto and U.S. Trust Company of Texas, National Association,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of: (a) a beneficial interest in a Global Note, or
(b) a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be
D-1
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we will do so
only (1) in the United States to a person whom the seller reasonably believes is
a "qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, (2) outside the
United States in an offshore transaction in accordance with Rule 904 under the
Securities Act, (3) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if available) or (4) pursuant to
an effective registration statement under the Securities Act, in each of cases
(1) through (4) in accordance with any applicable securities laws of any state
of the United States, and we further agree to notify any purchaser of the Notes
from us of the resale restrictions referred to above.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Initial Purchasers.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
D-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
_______________________________ Dated: __________________, ____
[Insert Name of Accredited Investor]
By:_______________________________
Name:
Title:
D-3