EXHIBIT 3
US ONCOLOGY, INC.,
THE GUARANTORS PARTY HERETO
AND
JP MORGAN CHASE BANK,
AS TRUSTEE
_______________________
INDENTURE
RELATING TO
9 5/8% SENIOR SUBORDINATED NOTES DUE 2012
DATED AS OF FEBRUARY 1, 2002
_______________________
TABLE OF CONTENTS
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Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.................................................. 1
Section 1.02. Other Definitions............................................ 33
Section 1.03. Incorporation by Reference of Trust Indenture Act............ 34
Section 1.04. Rules of Construction........................................ 35
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.............................................. 35
Section 2.02. Execution and Authentication................................. 42
Section 2.03. Registrar and Paying Agent................................... 44
Section 2.04. Paying Agent To Hold Money in Trust.......................... 44
Section 2.05. Noteholder Lists............................................. 44
Section 2.06. Transfer and Exchange........................................ 45
Section 2.07. Replacement Notes............................................ 45
Section 2.08. Outstanding Notes............................................ 46
Section 2.09. Notes Held by the Company or a Related Person................ 46
Section 2.10. Temporary Notes.............................................. 46
Section 2.11. Cancellation................................................. 46
Section 2.12. Defaulted Interest........................................... 47
Section 2.13. Persons Deemed Owners........................................ 47
Section 2.14. Computation of Interest...................................... 47
Section 2.15. CUSIP Numbers................................................ 47
Section 2.16. Issuance of Additional Notes................................. 48
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee........................................... 48
Section 3.02. Selection of Notes To Be Redeemed............................ 49
Section 3.03. Notice of Redemption......................................... 49
Section 3.04. Effect of Notice of Redemption............................... 50
Section 3.05. Deposit of Redemption Price.................................. 50
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Section 3.06. Notes Redeemed in Part.......................................... 50
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes................................................ 50
Section 4.02. Maintenance of Office or Agency................................. 51
Section 4.03. Reports to Holders.............................................. 51
Section 4.04. Compliance Certificate.......................................... 52
Section 4.05. Stay, Extension and Usury Laws.................................. 52
Section 4.06. Corporate Existence............................................. 52
Section 4.07. Notice of Default............................................... 52
Section 4.08. Change of Control............................................... 53
Section 4.09. Conduct of Business............................................. 54
Section 4.10. Limitations on Additional Indebtedness.......................... 54
Section 4.11. Limitations on Restricted Payments.............................. 56
Section 4.12. Limitation on Dividends and Other Restrictions Affecting
Restricted Subsidiaries...................................... 59
Section 4.13. Limitations on Liens............................................ 61
Section 4.14. Limitations on Transactions with Affiliates..................... 61
Section 4.15. Limitation on Asset Sales....................................... 63
Section 4.16. Limitation on Designation of Unrestricted Subsidiaries.......... 66
Section 4.17. Additional Guarantors........................................... 67
Section 4.18. Limitation on Layering Indebtedness............................. 68
Section 4.19. Limitations on the Issuance or Sale of Equity Interests of
Restricted Subsidiaries...................................... 68
ARTICLE 5
SUCCESSORS
Section 5.01. Limitation on Mergers, Consolidation, Etc....................... 69
Section 5.02. Successor Substituted........................................... 71
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default............................................... 71
Section 6.02. Acceleration.................................................... 73
Section 6.03. Other Remedies.................................................. 73
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Section 6.04. Waiver of Past Defaults........................................ 75
Section 6.05. Control by Majority............................................ 75
Section 6.06. Limitation on Suits............................................ 75
Section 6.07. Rights of Holders To Receive Payment........................... 76
Section 6.08. Collection Suit by Trustee..................................... 76
Section 6.09. Trustee May File Proofs of Claim............................... 76
Section 6.10. Priorities..................................................... 77
Section 6.11. Undertaking for Costs.......................................... 77
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.............................................. 77
Section 7.02. Rights of Trustee.............................................. 79
Section 7.03. Individual Rights of Trustee................................... 79
Section 7.04. Trustee's Disclaimer........................................... 79
Section 7.05. Notice of Defaults............................................. 80
Section 7.06. Reports by Trustee to Holders.................................. 80
Section 7.07. Compensation and Indemnity..................................... 80
Section 7.08. Replacement of Trustee......................................... 81
Section 7.09. Successor Trustee by Merger, Etc............................... 82
Section 7.10. Eligibility; Disqualification.................................. 82
Section 7.11. Preferential Collection of Claims Against Company.............. 82
ARTICLE 8
DISCHARGE AND DEFEASANCE
Section 8.01. Termination of Company's Obligations........................... 82
Section 8.02. Termination of the Obligations By Satisfaction or Pursuant
to Redemption............................................... 85
Section 8.03. Survival of Company's Obligations.............................. 86
Section 8.04. Application of Trust Money..................................... 86
Section 8.05. Repayment to Company........................................... 86
Section 8.06. Reinstatement.................................................. 86
ARTICLE 9
SUBORDINATION
Section 9.01. Agreement To Subordinate....................................... 87
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Section 9.02. Liquidation; Dissolution; Bankruptcy......................... 87
Section 9.03. Company Not To Make Payments with Respect to Notes in
Certain Circumstances..................................... 88
Section 9.04. Acceleration of Notes........................................ 89
Section 9.05. When Distribution Must Be Paid Over.......................... 89
Section 9.06. Notice by Company............................................ 89
Section 9.07. Subrogation.................................................. 90
Section 9.08. Relative Rights.............................................. 90
Section 9.09. Subordination May Not Be Impaired by the Company............. 90
Section 9.10. Distribution or Notice to Representative..................... 90
Section 9.11. Rights of Trustee and Paying Agent........................... 91
Section 9.12. Officers' Certificate........................................ 91
Section 9.13. Obligation of Company Unconditional.......................... 91
Section 9.14. Article 9 Not To Prevent Events of Default................... 92
ARTICLE 10
AMENDMENTS, MODIFICATIONS AND WAIVERS
Section 10.01. Without Consent of Holders................................... 92
Section 10.02. With Consent of Holders...................................... 93
Section 10.03. Compliance with Trust Indenture Act.......................... 94
Section 10.04. Revocation and Effect of Consents............................ 94
Section 10.05. Notation on or Exchange of Notes............................. 95
Section 10.06. Trustee Protected............................................ 95
ARTICLE 11
GUARANTEE OF SECURITIES
Section 11.01. Guarantee.................................................... 95
Section 11.02. Agreement To Subordinate..................................... 98
Section 11.03. Liquidation; Dissolution; Bankruptcy......................... 98
Section 11.04. Guarantors Not To Make Payments with Respect to
Guarantees in Certain Circumstances....................... 99
Section 11.05. Subrogation.................................................. 100
Section 11.06. Subordination May Not Be Impaired by Guarantors.............. 100
Section 11.07. Distribution or Notice to Representative..................... 100
Section 11.08. Rights of Trustee and Paying Agent........................... 100
Section 11.09. Officers' Certificate........................................ 101
Section 11.10. Obligation of Guarantors Unconditional....................... 101
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Section 11.11. Article 11 Not To Prevent Events of Default................... 102
Section 11.12. Execution and Delivery of Guarantee........................... 102
Section 11.13. Release of a Guarantor........................................ 102
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.................................. 103
Section 12.02. Notices....................................................... 104
Section 12.03. Communication by Holders with Other Holders................... 104
Section 12.04. Certificate and Opinion as to Conditions Precedent............ 105
Section 12.05. Statements Required in Certificate or Opinion................. 105
Section 12.06. Rules by Trustee and Agents................................... 105
Section 12.07. Legal Holidays................................................ 106
Section 12.08. No Personal Liability of Directors, Officers, Employees,
and Stockholders........................................... 106
Section 12.09. Duplicate Originals........................................... 106
Section 12.10. Governing Law................................................. 106
Section 12.11. No Adverse Interpretation of Other Agreements................. 106
Section 12.12. Successors.................................................... 106
Section 12.13. Separability.................................................. 107
Section 12.14. Benefits of Indenture......................................... 107
Section 12.15. Table of Contents, Headings, Etc.............................. 107
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Guarantee
Exhibit C-1 - Form of Institutional Accredited Investor Letter
Exhibit C-2 - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S
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CROSS-REFERENCE TABLE
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Trust Indenture Act Sections Indenture Sections
- ---------------------------- ------------------
Section 3.10(a)(1) ......................................... 7.10
(a)(2) ......................................... 7.10
(b) ............................................ 7.03; 7.08
Section 3.11 ............................................... 7.03
Section 3.13(a) ............................................ 7.06
(c) ............................................ 7.05; 7.06
Section 3.14(a) ............................................ 12.02
(a)(4) ......................................... 4.04
(b) ............................................ N/A
(c)(1) ......................................... N/A
(c)(2) ......................................... N/A
(d) ............................................ N/A
(e) ............................................ 12.05
Section 3.15(a) ............................................ 7.01; 7.02
(b) ............................................ 7.01; 7.02; 7.05
(c) ............................................ 7.01; 7.02
(d) ............................................ 7.01; 7.02
Section 3.16(a) ............................................ 6.05; 6.06
(a)(1)(A) ...................................... 6.05
(a)(1)(B) ...................................... 6.04
(b) ............................................ 6.07
Section 3.17(a)(1) ......................................... 6.08
(a)(2) ......................................... 6.09
(b) ............................................ 2.07
Section 3.18(a) ............................................ N/A
(c) ............................................ N/A
Note: The Cross-Reference Table shall not for any purpose be deemed to be a part
of this Indenture.
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INDENTURE dated as of February 1, 2002 between US ONCOLOGY, INC., a
Delaware corporation (the "Company"), the Guarantors signatory hereto (the
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"Guarantors") and JP MORGAN CHASE BANK, a New York banking corporation duly
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organized and existing under the laws of the State of New York, as trustee (the
"Trustee").
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Each party agrees for the benefit of the other parties and for the
equal and ratable benefit of the Holders of the Company's 9 5/8% Senior
Subordinated Notes due 2012 as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
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Section 1.01. Definitions.
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"Accounts Receivable Entity" means any Person, including, without
--------------------------
limitation, a Subsidiary of the Company, whose operations consist solely of
owning and/or selling accounts receivable and related assets of the Company and
its Subsidiaries and engaging in other activities in connection with
transactions that are Permitted Receivables Financings.
"Acquired Indebtedness" means (1) with respect to any Person that
---------------------
becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such
Person and its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and (2) with
respect to the Company or any Restricted Subsidiary, any Indebtedness of a
Person (other than the Company or a Restricted Subsidiary) existing at the time
such Person is merged or consolidated with or into, or becomes a subsidiary of,
the Company or a Restricted Subsidiary, or Indebtedness expressly assumed by the
Company or any Restricted Subsidiary in connection with the acquisition of an
asset or assets from another Person, which Indebtedness was not, in any case,
incurred by such other Person in connection with, or in contemplation of, such
merger or acquisition.
"Additional Interest" has the meaning set forth in the Registration
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Rights Agreement.
"Additional Notes" means any additional Notes having identical terms
----------------
and conditions to the Notes issued pursuant to Article 2 and in compliance with
Section 4.10.
"Affiliate" of any Person means any other Person which directly or
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indirectly controls or is controlled by, or is under direct or indirect common
control with, the referent Person. For purposes of Section 4.14, Affiliates
shall be deemed to include, with respect to
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any Person, any other Person (1) which beneficially owns or holds, directly or
indirectly, 10% or more of any class of the Voting Stock of the referent Person,
(2) of which 10% or more of the Voting Stock is beneficially owned or held,
directly or indirectly, by the referent Person or (3) with respect to an
individual, any immediate family member of such Person; provided, however, that
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the entering into of a Management Services Agreement by any Person shall not, in
and of itself, deem such Person to be an Affiliate for purposes of this
definition. For purposes of this definition, "control" of a Person shall mean
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the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means any Registrar, Paying Agent or co-Registrar.
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"amend" means to amend, supplement, extend, restate, amend and restate
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or otherwise modify; and "amendment" shall have a correlative meaning.
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"Asset" means any asset or property.
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"Asset Acquisition" means:
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(1) an Investment by the Company or any Restricted Subsidiary of the
Company in any other Person if, as a result of such Investment, such Person
shall become a Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, or
(2) the acquisition by the Company or any Restricted Subsidiary of the
Company of all or substantially all of the assets of any other Person or
any division or line of business of any other Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease,
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assignment or other disposition by the Company or any Restricted Subsidiary to
any Person other than the Company or any Restricted Subsidiary (including by
means of a Sale and Leaseback Transaction or a merger or consolidation)
(collectively, for purposes of this definition, a "transfer"), in one
transaction or a series of related transactions, of any assets of the Company or
any of its Restricted Subsidiaries other than in the ordinary course of
business. For purposes of this definition, the term "Asset Sale" shall not
include:
(1) transfers of cash or Cash Equivalents;
(2) transfers of assets (including Equity Interests) that are governed
by, and made in accordance with, Section 5.01;
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(3) Permitted Investments and Restricted Payments and other transfers
of assets permitted under Section 4.11;
(4) the creation or realization of any Permitted Lien;
(5) sales of accounts receivable and related assets in connection
with a Permitted Receivables Financing made in accordance with Section
4.10;
(6) transfers of damaged, worn-out or obsolete equipment or assets
that, in the Company's reasonable judgment, are no longer used or useful in
the business of the Company or its Restricted Subsidiaries;
(7) the disposition, sale or transfer of the capital stock of any
Unrestricted Subsidiary;
(8) any surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claim of any kind;
(9) any non-exclusive license not involving a substantial portion of
the business of the Company and the Restricted Subsidiaries taken as a
whole;
(10) any transfer or series of related transfers that, but for this
clause, would be Asset Sales, if after giving effect to such transfers, the
aggregate Fair Market Value of the assets transferred in such transaction
or any such series of related transactions does not exceed $2.5 million;
and
(11) the granting of Liens permitted under Section 4.13.
"Attributable Indebtedness", when used with respect to any Sale and
-------------------------
Leaseback Transaction, means, as at the time of determination, the present value
(discounted at the interest rate implicit in the lease, compounded
semi-annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in any such Sale and Leaseback
Transaction after excluding all amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water utilities and
similar charges.
"Bankruptcy Law" means Title 11, United States Code, as amended, or
--------------
any similar federal or state law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the board of
------------------
directors or comparable governing body of such Person.
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"Business Day" means a day other than a Saturday, Sunday or other day
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on which banking institutions in the State of New York are authorized or
required by law or executive order to close.
"Capitalized Lease" means a lease required to be capitalized for
-----------------
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligations" of any Person means the obligations of
-----------------------------
such Person to pay rent or other amounts under a Capitalized Lease, and the
amount of such obligation shall be the capitalized amount thereof on the balance
sheet of such Person determined in accordance with GAAP.
"Cash Equivalents" means:
----------------
(1) marketable obligations with a maturity of 360 days or less 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
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credit of the United States of America is pledged in support thereof);
(2) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million and
is assigned at least a "B" rating by Thomson Financial BankWatch;
(3) commercial paper maturing no more than 180 days from the date of
creation thereof issued by a corporation that is not the Company or an
Affiliate of the Company, and is organized under the laws of any state of
the United States of America or the District of Columbia and rated at least
A-1 by S&P or at least P-1 by Moody's;
(4) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clause (1) above entered
into with any commercial bank meeting the specifications of clause (2)
above; and
(5) investments in money market or other mutual funds substantially
all of whose assets comprise securities of the types described in clauses
(1) through (4) above; provided, however, that for the purpose of clause
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(5) of the definition of "Permitted Investment" only, investments in mutual
funds all of whose assets are comprised of securities of the type described
in clauses (1) through (4) above, but which in the case of clause (1) may
have maturities of up to 762 days and in the case of clause (3) may have
maturities of up to 397 days.
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"Certificated Registered Note" means any Note that is not a Global
----------------------------
Note and that is registered in the Register, the form of which is attached
hereto as Exhibit A.
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"Change of Control" means the occurrence of any of the following
-----------------
events:
(1) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) (other than the Permitted Holders) is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause that person or group
shall be deemed to have "beneficial ownership" of all securities that any
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of Voting Stock representing more than 50% of the voting power
of the total outstanding Voting Stock of the Company;
(2) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors
or whose nomination for election by the stockholders of the Company was
approved by a vote of the majority of the directors of the Company 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)
cease for any reason to constitute a majority of the Board of Directors of
the Company;
(3) (a) all or substantially all of the assets of the Company and the
Restricted Subsidiaries, taken as a whole, are sold or otherwise
transferred to any Person other than a Wholly Owned Subsidiary or (b) the
Company consolidates or merges with or into another Person or any Person
consolidates or merges with or into the Company, in either case under this
clause (3), in one transaction or a series of related transactions in which
immediately after the consummation thereof Persons owning Voting Stock
representing in the aggregate a majority of the total voting power of the
Voting Stock of the Company immediately prior to such consummation do not
own Voting Stock representing a majority of the total voting power of the
Voting Stock of the Company or the surviving or transferee Person; or
(4) the Company shall adopt a Plan of Liquidation or dissolution or
any such plan shall be approved by the stockholders of the Company;
provided that if in connection with a merger, consolidation or sale of all or
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substantially all of the assets of the Company a shareholder agreement, voting
agreement or similar agreement is entered into containing customary terms with
respect to voting or tendering shares in support of such transaction (or
opposing alternative transactions), then a "Change of Control" shall not be
deemed to have occurred by reason of any such agreement.
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"Company" means US Oncology, Inc. until a successor replaces it
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pursuant to the applicable provisions hereof and thereafter means the successor.
"Company Request" means any written request delivered to the Trustee
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and signed in the name of the Company by the Chairman of the Board of Directors,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer or the Treasurer of the Company and attested to by the
Secretary or any Assistant Secretary of the Company.
"Consolidated Amortization Expense" for any period means the
---------------------------------
amortization expense of the Company and the Restricted Subsidiaries for such
period (including amortization of goodwill and other intangibles), determined on
a consolidated basis in accordance with GAAP.
"Consolidated Cash Flow" for any period means, without duplication,
----------------------
the sum of the amounts for such period of
(1) Consolidated Net Income for such Person for such period, plus
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(2) in each case only to the extent (and in the same proportion)
deducted in determining Consolidated Net Income and with respect to the
portion of Consolidated Net Income attributable to any Restricted
Subsidiary only if a corresponding amount would be permitted at the date of
determination to be distributed to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to
the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to
such Restricted Subsidiary or its respective stockholders,
(a) Consolidated Income Tax Expense,
(b) Consolidated Amortization Expense (but only to the extent not
included in Consolidated Interest Expense),
(c) Consolidated Depreciation Expense,
(d) Consolidated Interest Expense, and
(e) all other non-cash items reducing the Consolidated Net Income
(excluding any non-cash charge that results in an accrual of a reserve
for cash charges in any future period) for such period,
in each case determined on a consolidated basis in accordance with
with GAAP, minus
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(3) the aggregate amount of all non-cash items, determined on a
consolidated basis, to the extent such items increased Consolidated Net
Income for such period.
"Consolidated Depreciation Expense" for any period means the
---------------------------------
depreciation expense of the Company and the Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Income Tax Expense" for any period means the provision
-------------------------------
for taxes of the Company and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means the ratio of
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Consolidated Cash Flow during the most recent four consecutive full fiscal
quarters for which financial statements are available (the "Four-Quarter
------------
Period") ending on or prior to the date of the transaction giving rise to the
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need to calculate the Consolidated Interest Coverage Ratio (the "Transaction
-----------
Date") to Consolidated Interest Expense for the Four-Quarter Period. For
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purposes of this definition, Consolidated Cash Flow and Consolidated Interest
Expense shall be calculated after giving effect on a pro forma basis for the
period of such calculation to:
(1) the incurrence of any Indebtedness or the issuance of any
Preferred Stock of the Company, any Restricted Subsidiary and any Accounts
Receivable Entity (and the application of the proceeds therefrom) and any
repayment of other Indebtedness or redemption of other Preferred Stock (and
the application of the proceeds thereof) (other than the incurrence or
repayment of Indebtedness in the ordinary course of business for working
capital purposes pursuant to any revolving credit arrangement) occurring
during the Four-Quarter Period or at any time subsequent to the last day of
the Four-Quarter Period and on or prior to the Transaction Date, as if such
incurrence, repayment, issuance or redemption, as the case may be (and the
application of the proceeds thereof), occurred on the first day of the Four
Quarter Period; and
(2) any Asset Sale or other disposition or Asset Acquisition
(including, without limitation, any Asset Acquisition giving rise to the
need to make such calculation as a result of the Company or any Restricted
Subsidiary (including any Person who becomes a Restricted Subsidiary as a
result of such Asset Acquisition) incurring Acquired Indebtedness and also
including any Consolidated Cash Flow (including any pro forma expense and
cost reductions calculated on a basis consistent with Regulation S-X under
the Exchange Act associated with any such Asset Acquisition) occurring
during the Four-Quarter Period or at any time subsequent to the last day of
the Four-Quarter Period and on or prior to the Transaction Date, as if such
Asset Sale or Asset Acquisition or other disposition (including the
incurrence of, or assumption or liability
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for, any such Indebtedness or Acquired Indebtedness) occurred on the first
day of the Four-Quarter Period.
If the Company or any Restricted Subsidiary directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if the Company or such Restricted
Subsidiary had directly incurred or otherwise assumed such guaranteed
Indebtedness.
In calculating Consolidated Interest Expense for purposes of
determining the denominator (but not the numerator) of this Consolidated
Interest Coverage Ratio:
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on this Indebtedness in effect on the
Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four-Quarter Period;
and
(3) notwithstanding clause (1) or (2) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements relating to Hedging Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of these
agreements.
"Consolidated Interest Expense" for any period means the sum, without
-----------------------------
duplication, of the total interest expense of the Company and the Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP and including without duplication,
(1) imputed interest on Capitalized Lease Obligations and Attributable
Indebtedness,
(2) commissions, discounts and other fees and charges owed with
respect to letters of credit securing financial obligations, bankers'
acceptance financing and receivables financings,
(3) the net costs associated with Hedging Obligations,
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(4) amortization of debt issuance costs, debt discount or premium and
other financing fees and expenses, except those incurred in connection with
the Notes or the Credit Agreement,
(5) the interest portion of any deferred payment obligations,
(6) all other non-cash interest expense,
(7) capitalized interest,
(8) all dividend payments on any series of Disqualified Equity
Interests of the Company or any Preferred Stock of any Restricted
Subsidiary,
(9) all interest payable with respect to discontinued operations,
(10) all interest on any Indebtedness of any other Person guaranteed
by the Company or any Restricted Subsidiary, and
(11) imputed interest related to Permitted Receivables Financings
during such period as determined in accordance with GAAP.
"Consolidated Net Income" for any period means the net income (or
-----------------------
loss) of the Company and the Restricted Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP; provided that there shall be
--------
excluded from the calculation of such net income (to the extent otherwise
included therein), without duplication:
(1) the net income (or loss) of any Person (other than a Restricted
Subsidiary) in which any Person other than the Company and the Restricted
Subsidiaries has an ownership interest, except to the extent that cash in
an amount equal to any such income has actually been received by the
Company or any Guarantor during such period;
(2) except to the extent includable in the consolidated net income of
the Company pursuant to the foregoing clause (1), the net income (or loss)
of any Person that accrued prior to the date that (a) such Person becomes a
Restricted Subsidiary or is merged into or consolidated with the Company or
any Restricted Subsidiary or (b) the assets of such Person are acquired by
the Company or any Restricted Subsidiary;
(3) the net income of any Restricted Subsidiary during such period to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of that income is not permitted
by operation of the terms of its respective charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary during such period, except that
-10-
the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining Consolidated Net Income;
(4) for the purposes of calculating the Restricted Payments Basket
only, in the case of a successor to the Company by consolidation, merger or
transfer of its assets, any income (or loss) of the successor prior to such
merger, consolidation or transfer of assets;
(5) other than for purposes of calculating the Restricted Payments
Basket, any gain (or loss), together with any related provision for taxes
on any such gain (or the tax effect of any such loss), realized during such
period by the Company or any Restricted Subsidiary upon (a) the acquisition
of any securities, or the extinguishment of any Indebtedness, of the
Company or any Restricted Subsidiary or (b) any Asset Sale by the Company
or any Restricted Subsidiary;
(6) other than for purposes of calculating the Restricted Payments
Basket, any extraordinary gain (or extraordinary loss), together with any
related provision for taxes on any such extraordinary gain (or the tax
effect of any such extraordinary loss), realized by the Company or any
Restricted Subsidiary during such period; and
(7) prior to February 1, 2005, any non-recurring charges resulting
from write-offs of intangible assets, asset impairments and/or (i) non-cash
reorganization and restructuring costs in connection with the termination
of service agreements with affiliated physicians (and sales of related
assets) and/or (ii) cash reorganization and restructuring costs in
connection with the termination of service agreements with affiliated
physicians (and sales of related assets) and the repositioning, including
costs associated with the offering of the Notes and the repayment of
existing debt, in an aggregate amount not to exceed $60.0 million.
In addition, any return of capital with respect to an Investment that increased
the Restricted Payments Basket pursuant to Section 4.11(a)(3)(D) or decreased
the amount of Investments outstanding pursuant to clause (3), (14), (16) or (18)
of the definition of "Permitted Investments" shall be excluded from Consolidated
Net Income for purposes of calculating the Restricted Payments Basket.
"Consolidated Net Worth" means, with respect to any Person as of any
----------------------
date, the consolidated stockholders' equity (including Preferred Stock) of such
Person and its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP, less (without duplication) (1) any amounts thereof
attributable to Disqualified Equity Interests of such Person or its Subsidiaries
or any amount attributable to Unrestricted Subsidiaries and (2) all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of assets of a going concern business made in accordance with GAAP after the
acquisition
-11-
of such business) subsequent to the Issue Date in the book value of any asset
owned by such Person or a Subsidiary of such Person.
"Corporate Trust Office of the Trustee" shall be at the
-------------------------------------
address of the Trustee specified in Section 12.02 or such other address as the
Trustee may give notice of to the Company.
"Coverage Ratio Exception" has the meaning set forth in the
------------------------
proviso in the first paragraph of Section 4.10.
"Credit Agreement" means the Credit Agreement dated as of
----------------
February 1, 2002 by and among the Company, as Borrower, First Union National
Bank, as administrative agent, UBS Warburg LLC as syndication agent, GE
Healthcare Financial Services, as documentation agent, and the other lenders
named therein, including any notes, guarantees, collateral and security
documents, instruments and agreements executed in connection therewith
(including Hedging Obligations related to the Indebtedness incurred thereunder),
and in each case as amended, extended, replaced or refinanced from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of borrowings or other
Indebtedness outstanding or available to be borrowed thereunder) all or any
portion of the Indebtedness under such agreement, and any successor or
replacement agreement or agreements with the same or any other agent(s),
creditor(s), lender(s) or group of creditors or lenders.
"CUSIP number" means the alphanumeric designation assigned to
------------
the Notes by Standard & Poor's Corporation, CUSIP Service Bureau.
"Custodian" means any receiver, trustee, assignee, liquidator
---------
or similar official under any Bankruptcy Law.
"Default" means (1) any Event of Default or (2) any event, act
-------
or condition that, after notice or the passage of time or both, would be an
Event of Default.
"Depository" or "DTC" means The Depository Trust Company and
---------- ---
any successor to DTC in its capacity as depository for any Notes.
"Designated Senior Debt" means (1) Senior Debt under or in
----------------------
respect of the Credit Agreement and (2) any other Indebtedness constituting
Senior Debt which, at the time of determination, has an aggregate principal
amount (or an Outstanding Receivables Financing Amount in the case of any
Permitted Receivables Financings) of at least $10.0 million and in the case of
clause (2), is specifically designated in the instrument evidencing such Senior
Debt as "Designated Senior Debt."
-12-
"Designation" has the meaning given to this term in Section
-----------
4.16.
"Designation Amount" has the meaning given to this term in
------------------
Section 4.16.
"Disqualified Equity Interests" of any Person means any Equity
-----------------------------
Interest of such Person that, by its terms, or by the terms of any related
agreement or of any security into which it is convertible, puttable or
exchangeable, is, or upon the happening of any event or the passage of time
would be, required to be redeemed by such Person, whether or not at the option
of the holder thereof, or matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, in whole or in part, on or prior to the
date which is 91 days after the final maturity date of the Notes; provided,
--------
however, that any class of Equity Interests of such Person that, by its terms,
- -------
authorizes such Person to satisfy in full its obligations with respect to the
payment of dividends or upon maturity, redemption (pursuant to a sinking fund or
otherwise) or repurchase thereof or otherwise by the delivery of Equity
Interests that are not Disqualified Equity Interests, and that is not
convertible, puttable or exchangeable for Disqualified Equity Interests or
Indebtedness, will not be deemed to be Disqualified Equity Interests so long as
such Person satisfies its obligations with respect thereto solely by the
delivery of Equity Interests that are not Disqualified Equity Interests;
provided, further, that any Equity Interests that would not constitute
- -------- -------
Disqualified Equity Interests but for provisions thereof giving holders thereof
(or the holders of any security into or for which such Equity Interests are
convertible, exchangeable or exercisable) the right to require the Company to
redeem such Equity Interests upon the occurrence of a Change of Control
occurring prior to the final maturity date of the Notes shall not constitute
Disqualified Equity Interests if the change in control provisions applicable to
such Equity Interests are no more favorable to such holders than the provisions
described under Section 4.08 and such Equity Interests specifically provide that
the Company shall not redeem any such Equity Interests pursuant to such
provisions prior to the Company's purchase of the Notes as required pursuant to
the provisions described under Section 4.08.
"Equity Interests" of any Person means (1) any and all shares
----------------
or other equity interests or participations, however designated (including
common stock, preferred stock, limited liability company interests and
partnership interests), in such Person and (2) all rights to purchase, warrants
or options (whether or not currently exercisable), participations or other
equivalents of or interests in (however designated) such shares or other
interests in such Person.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
"Exchange Notes" means the 9 5/8% Senior Subordinated Notes
--------------
due 2012 to be issued pursuant to this Indenture in connection with (i) a
Registration pursuant to the Registration Rights Agreement or, (ii) with respect
to Initial Notes issued under this Indenture from time to time after the Issue
Date pursuant to Section 2.16, 9 5/8% Senior Notes due 2012
-13-
issued pursuant to a registration rights agreement substantially identical to
the Registration Rights Agreement, in each case substantially in the form of
Exhibit A hereto.
- ---------
"Fair Market Value" means, with respect to any asset, the
-----------------
price (after taking into account any liabilities relating to such asset) that
would be negotiated in an arm's-length transaction for cash between a willing
seller and a willing and able buyer, neither of which is under any compulsion to
complete the transaction, as such price is determined in good faith by the Board
of Directors of the Company or a duly authorized committee thereof, as evidenced
by a resolution of such Board or committee; provided, however, that for purposes
-------- -------
of calculating the Fair Market Value of assets sold in PPM Asset Sales, no value
shall be assigned to the management agreements being canceled and for purposes
of calculating the Fair Market Value of the consideration received in such
sales, no value shall be assigned to the newly executed services agreements.
"Foreign Subsidiary" means any Subsidiary of the Company which
------------------
(i) is not organized under the laws of (x) the United States or any state
thereof or (y) the District of Columbia and (ii) conducts substantially all of
its business operations outside the United States of America.
"GAAP" means generally accepted accounting principles set
----
forth the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"guarantee" means a direct or indirect guarantee (other than
---------
by endorsement of negotiable instruments for collection) by any Person of any
Indebtedness of any other Person and includes any obligation, direct or
indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) Indebtedness of such
other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise); or (2) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part). The amount of any guarantee of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations in respect of
which such guarantee is made and the maximum liability of such other Person for
any such contingent obligations in respect of which such guarantee is made at
such date. "guarantee," when used as a verb, and "guaranteed" have correlative
--------- ----------
meanings.
-14-
"Guarantor" means each Restricted Subsidiary of the Company on
---------
the Issue Date, and each other Person that is required to become a Guarantor by
the terms of this Indenture after the Issue Date, in each case, until such
Person is released from its Note Guarantee.
"Guarantor Senior Debt" means, with respect to any Guarantor,
---------------------
the principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of such Guarantor,
together with all interest, fees, indemnities and other obligations and other
amounts owing in respect thereof, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes.
Without limiting the generality of the foregoing, "Guarantor
Senior Debt" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) and other
obligations on, and all other amounts owing in respect of:
(1) all monetary obligations of every nature of such Guarantor
under, or with respect to, the Credit Agreement, including, without
limitation, obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities
(and guarantees thereof); and
(2) all Hedging Obligations in respect of the Credit
Agreement;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall
not include:
(1) any Indebtedness of such Guarantor to the Company or any
of its Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any of its Subsidiaries;
(3) obligations to trade creditors in connection with
obtaining goods, materials or services;
(4) Indebtedness represented by Disqualified Equity Interests;
(5) any liability for taxes owed or owing by such Guarantor;
-15-
(6) that portion of any Indebtedness incurred in violation of
Section 4.10 (but, as to any such obligation, no such violation shall
be deemed to exist for purposes of this clause (6) if the holder(s) of
such obligation or their representative shall have received an
officers' certificate of such Guarantor to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving
credit indebtedness, that the incurrence of the entire committed amount
thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture);
(7) Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of Title 11, United States Code, is
without recourse to such Guarantor; and
(8) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of such
Guarantor.
"Hedging Obligations" of any Person means the obligations of
-------------------
such Person pursuant to any interest rate swap agreement, interest rate collar
agreement, interest rate floor agreement or other similar agreement or
arrangement designed to protect such Person against fluctuations in interest
rates, in each case entered into for bona fide hedging purposes and not for the
purpose of speculation.
"Holder" means any registered holder, from time to time, of
------
the Notes.
"incur" means, with respect to any Indebtedness or Obligation,
-----
incur, create, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to such Indebtedness
or Obligation; provided that (1) the Indebtedness of a Person existing at the
--------
time such Person became a Restricted Subsidiary shall be deemed to have been
incurred by such Restricted Subsidiary at such time and (2) neither the accrual
of interest nor the accretion of original issue discount shall be deemed to be
an incurrence of Indebtedness.
"Indebtedness" of any Person at any date means, without
------------
duplication:
(1) all liabilities, contingent or otherwise, of such Person
for 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) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(3) all obligations of such Person in respect of letters of
credit or other similar instruments (or reimbursement obligations with
respect thereto);
-16-
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except trade payables and accrued
expenses incurred by such Person in the ordinary course of business in
connection with obtaining goods, materials or services;
(5) the maximum fixed redemption or repurchase price of all
Disqualified Equity Interests of such Person;
(6) all Capitalized Lease Obligations of such Person;
(7) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person;
(8) all Indebtedness of others guaranteed by such Person to the extent
of such guarantee; provided that Indebtedness of the Company or its
--------
Subsidiaries that is guaranteed by the Company or the Company's
Subsidiaries shall only be counted once in the calculation of the amount of
Indebtedness of the Company and its Subsidiaries on a consolidated basis;
(9) all Attributable Indebtedness;
(10) to the extent not otherwise included in this definition, Hedging
Obligations of such Person;
(11) all obligations of such Person under conditional sale or other
title retention agreements relating to assets purchased by such Person; and
(12) all obligations under Permitted Receivables Financings, the
amount of Indebtedness represented thereby to be deemed to equal the
Outstanding Receivables Financing Amount.
Any Indebtedness which is incurred at a discount to the principal
amount at maturity thereof shall be deemed to have been incurred at the accreted
value thereof at the date of issuance in accordance with GAAP. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above, the maximum liability
of such Person for any such contingent obligations at such date and, in the case
of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a
Lien securing the Indebtedness of others on the date that the Lien attaches and
(b) the amount of the Indebtedness secured thereby. For purposes of clause (5),
the "maximum fixed redemption or repurchase price" of any Disqualified Equity
--------------------------------------------
Interests that do not have a fixed redemption or repurchase price shall be
calculated in accordance with the terms of such Disqualified Equity Interests as
if such Disqualified Equity Interests were redeemed or repurchased on any
-17-
date on which an amount of Indebtedness outstanding shall be required to be
determined pursuant to this Indenture.
"Indenture" means this Indenture, as amended, supplemented or
---------
otherwise modified from time to time, in accordance with the terms hereof.
"Independent Director" means a director of the Company who
--------------------
(1) is independent with respect to the transaction at issue; and
(2) does not have any material financial interest in the Company
(other than as a result of holding securities of the Company).
"Independent Financial Advisor" means an accounting, appraisal or
-----------------------------
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Company.
"Initial Notes" means (i) $175,000,000 aggregate principal amount of 9
-------------
5/8% Senior Subordinated Notes due 2012 issued on the Issue Date, substantially
in the form of Exhibit A and containing the Securities Act Legend and (ii)
---------
Additional Notes, in each case for so long as such notes constitute Restricted
Notes.
"interest" means, with respect to the Notes, interest and Additional
--------
Interest, if any, on the Notes.
"Investments" of any Person means:
-----------
(1) all direct or indirect investments by such Person in any other
Person in the form of loans, advances or capital contributions or other
credit extensions constituting Indebtedness of such other Person, and any
guarantee of Indebtedness of any other Person (excluding commissions,
travel and similar advances to officers and employees, made in the ordinary
course of business) and extensions of credit or other advances to customers
or other Persons on commercially reasonable terms in accordance with normal
trade practices or otherwise in the ordinary course of business;
(2) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Equity Interests or other securities of any other
Person;
(3) all other items that would be classified as investments (including
purchases of assets outside the ordinary course of business) on a balance
sheet of such Person prepared in accordance with GAAP; and
-18-
(4) the Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as otherwise expressly specified in this definition, the amount
of any Investment (other than an Investment made in cash) shall be the Fair
Market Value thereof on the date such Investment is made. The amount of any
Investment pursuant to clause (4) shall be the Designation Amount determined in
accordance with Section 4.16. If the Company or any Restricted Subsidiary sells
or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary, the Company shall
be deemed to have made an Investment on the date of any such sale or other
disposition equal to the Fair Market Value of the Equity Interests of and all
other Investments in such Restricted Subsidiary not sold or disposed of, which
amount shall be determined by the Board of Directors. The acquisition by the
Company or any Restricted Subsidiary of a Person that holds an Investment in a
third Person other than a third Person invested in by an Unrestricted Subsidiary
shall be deemed to be an Investment by the Company or such Restricted Subsidiary
in the third Person in an amount equal to the Fair Market Value of the
Investment held by the acquired Person in the third Person. Notwithstanding the
foregoing, purchases or redemptions of Equity Interests of the Company shall be
deemed not to be Investments.
"Issue Date" means February 1, 2002.
----------
"Lien" means, with respect to any asset, any mortgage, deed of trust,
----
lien (statutory or other), pledge, lease, easement, restriction, covenant,
charge, security interest or other encumbrance of any kind or nature in respect
of such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, and any lease in the nature thereof, any option or other agreement to
sell, and any filing of, or agreement to give, any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than
cautionary filings in respect of operating leases).
"Management Services Agreements" means the management services
------------------------------
agreements of the Company and its Restricted Subsidiaries, whether now existing
or hereafter acquired or arising, together with any and all extensions,
modifications, amendments, renewals, substitutions or replacements thereof.
"Moody's" means Moody's Investors Service, Inc. and its successors.
-------
"Net Available Proceeds" means, with respect to any Asset Sale, the
----------------------
proceeds thereof in the form of cash or Cash Equivalents, net of
(1) brokerage commissions and other fees and expenses (including fees
and expenses of legal counsel, accountants and investment banks) of such
Asset Sale;
-19-
(2) provisions for taxes payable as a result of such Asset Sale (after
taking into account any available tax credits or deductions and any tax
sharing arrangements);
(3) amounts required to be paid to any Person (other than the Company
or any Restricted Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale or having a Lien thereon;
(4) payments of unassumed liabilities (not constituting Indebtedness)
relating to the assets sold at the time of, or within 30 days after the
date of, such Asset Sale; and
(5) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, (i) for post-closing
adjustments, tune-ups or revaluations or (ii) as a reserve required in
accordance with GAAP against any liabilities associated with such Asset
Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including pensions and other postemployment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such
Asset Sale, all as reflected in an Officers' Certificate delivered to the
Trustee; provided, however, that any amounts remaining after adjustments,
-------- -------
revaluations or liquidations of such reserves shall constitute Net
Available Proceeds.
"Non-Recourse Debt" means Indebtedness of an Unrestricted Subsidiary:
-----------------
(1) as to which neither the Company nor any Restricted Subsidiary (a)
provides credit support of any kind (including any undertaking, agreement
or instrument that would constitute Indebtedness), other than any pledge of
the Equity Interest of any Unrestricted Subsidiary, (b) is directly or
indirectly liable as a guarantor or otherwise, other than in the case of
both of the foregoing clauses (a) and (b), a non-recourse guarantee to
support a pledge of the Equity Interests of any Unrestricted Subsidiary, or
(c) constitutes the lender; and
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Notes) of the Company or any
Restricted Subsidiary to declare a default on the other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"Notes" means, collectively, the Initial Notes, the Private Exchange
-----
Notes, if any, and the Unrestricted Notes. For purposes of this Indenture, all
Notes shall vote together as one series of Notes under this Indenture.
-20-
"Note Guarantees" means. collectively, the guarantee of the Notes by
---------------
the Company and the guarantee of the Notes by the Guarantors.
"Obligation" means any principal, interest, penalties, fees,
----------
indemnification, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum related to the
-------------------
sale of the Notes dated January 25, 2002.
"Officer" means any of the following of the Company: the Chairman of
-------
the Board of Directors, the Chief Executive Officer, the Chief Financial
Officer, the President, any Vice President, the Treasurer or the Secretary.
"Officers' Certificate" means a certificate signed by two Officers.
-------- -----------
"Opinion of Counsel" means a written opinion from legal counsel of the
------------------
Company who may be an employee of or counsel for the Company or other counsel
reasonably acceptable to the Trustee.
"Outstanding Receivables Financing Amount" means the greater of (x)
----------------------------------------
85% of the net book value of the aggregate amount of receivables sold or
financed pursuant to a Permitted Receivables Financing that remain uncollected
at any one time and (y) 100% of the obligations secured by such receivables
exclusive of yield or interest earned in such investments.
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
-----------------------
Guarantor that ranks pari passu as to payment with the Notes or the Note
Guarantees, as applicable.
"Permitted Business" means the businesses engaged in by the Company
------------------
and its Subsidiaries on the Issue Date as described in the Offering Memorandum
and businesses that are reasonably related thereto or reasonable extensions
thereof.
"Permitted Holders" means Welsh, Carson, Anderson & Stowe and Oak Hill
-----------------
Capital Management and investment vehicles controlled by such entities formed
solely for the purpose of investing in securities.
"Permitted Investment" means:
--------------------
(1) Investments by the Company or any Restricted Subsidiary in (a) any
Restricted Subsidiary or (b) any Person that is or will become, immediately
after such Investment or substantially concurrent with such Investment, a
Restricted Subsidiary
-21-
or that will merge or consolidate or liquidate into the Company or a
Restricted Subsidiary;
(2) Investments in the Company by any Restricted Subsidiary;
(3) loans and advances to directors, employees and officers of
the Company and the Restricted Subsidiaries for bona fide business
purposes and to purchase Equity Interests of the Company not in excess
of $3.0 million at any one time outstanding;
(4) Hedging Obligations incurred pursuant to Section 4.10(b)
(5);
(5) Cash Equivalents;
(6) receivables owing to the Company or any Restricted
Subsidiary payable or dischargeable in accordance with customary trade
terms; provided, however, that such trade terms may include such
-------- -------
concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;
(7) to the extent disclosed in this Indenture Investments
existing on the Issue Date or made pursuant to legally binding written
agreements in existence on such date;
(8) Investments received as consideration for the settlement
of any litigation, arbitration or dispute in partial or full
satisfaction of such claim or dispute;
(9) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers;
(10) Investments made by the Company or any Restricted
Subsidiary as a result of consideration received in connection with an
Asset Sale made in compliance with Section 4.15 hereof or the
disposition of any asset not constituting an Asset Sale;
(11) lease, utility and other similar deposits in the ordinary
course of business;
(12) Investments made by the Company or a Restricted Subsidiary
for consideration consisting only of Qualified Equity Interests of the
Company;
(13) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments;
-22-
(14) Investments in Permitted Joint Ventures in an aggregate
amount outstanding at any one time not to exceed the greater of (a)
$20.0 million or (b) 3% of Total Tangible Assets (with each Investment
being valued as of the date made and without regard to subsequent
changes in value);
(15) Investments in Accounts Receivable Entities;
(16) other Investments in an aggregate amount not to exceed
$20.0 million at any one time outstanding (with each Investment being
valued as of the date made and without regard to subsequent changes in
value);
(17) prepaid expenses, negotiable instruments held for
collection and lease, utility and workers' compensation, performance or
similar deposits incurred in the ordinary course of business; and
(18) loans by Physician Reliance Network, Inc. to affiliated
physician groups in an aggregate amount outstanding at any one time not
to exceed $10.0 million.
The amount of Investments outstanding at any time pursuant to
clause (14), (16) or (18) above shall be deemed to be reduced:
(a) upon the disposition or repayment of or return on any
Investment made pursuant to clause (14), (16) or (18) above, by an
amount equal to the return of capital (including dividends, interest
and distributions) with respect to such Investment to the Company or
any Restricted Subsidiary (to the extent not included in the
computation of Consolidated Net Income and profits on sale), less the
cost of the disposition of such Investment, if any, and net of taxes;
and
(b) upon a Redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, by an amount equal to the lesser of (x) the Fair
Market Value of the Company's proportionate interest in such Subsidiary
immediately following such Redesignation, and (y) the aggregate amount
of Investments in such Subsidiary that increased (and did not
previously decrease) the amount of Investments outstanding pursuant to
clause (14), (16) or (18) above.
"Permitted Joint Venture" means a Person (i) that owns, leases,
-----------------------
operates or services a hospital or other health-care provider for the purpose of
developing, operating, conducting or marketing a Permitted Business and (ii) of
which the Company or any Restricted Subsidiary owns a 30% or greater equity
interest.
-23-
"Permitted Junior Securities" means:
---------------------------
(1) Equity Interests in the Company; or
(2) debt securities that are subordinated to (a) all Senior
Debt of the Company or Guarantor Senior Debt of the applicable
Guarantor, as the case may be, and (b) any debt securities issued in
exchange for Senior Debt or Guarantor Senior Debt, as the case may be,
to substantially the same extent as, or to a greater extent than, the
Notes and the Note Guarantees are subordinated to Senior Debt and
Guarantor Senior Debt, respectively, under this Indenture.
"Permitted Liens" means the following types of Liens:
---------------
(1) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or remaining payable without penalty
or (b) contested in good faith by appropriate proceedings and as to
which the Company or the Restricted Subsidiaries shall have set aside
on their books such reserves as may be required pursuant to GAAP;
(2) statutory, contractual or common law Liens of landlords
and Liens of carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in
good faith;
(3) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, contracts, progress payments or completion or performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(4) Liens upon specific items of inventory, equipment or other
goods and proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the account of
such Person to facilitate the purchase, shipment or storage of such
inventory or other goods;
(5) attachment or judgment Liens not giving rise to an Event
of Default so long as any appropriate legal proceedings which may have
been duly initiated for the review of such judgment have not been
finally terminated or the period within which the proceedings may be
initiated has not expired;
-24-
(6) easements, rights-of-way, zoning restrictions and other
similar charges, restrictions, encumbrances or irregularities in
respect of real property or immaterial imperfections of title which are
customary or do not, in the aggregate, impair in any material respect
the ordinary conduct of the business of the Company and the Restricted
Subsidiaries taken as a whole;
(7) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other assets
relating to such letters of credit and products and proceeds thereof;
(8) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of the Company or any Restricted Subsidiary, including
rights of offset and setoff;
(9) bankers' Liens, rights of setoff and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit in
one or more accounts maintained by the Company or any Restricted
Subsidiary, in each case granted in the ordinary course of business in
favor of the bank or banks with which such accounts are maintained,
securing amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled
accounts and netting arrangements; provided that in no case shall any
--------
such Liens secure (either directly or indirectly) the repayment of any
Indebtedness;
(10) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the
Company or any Restricted Subsidiary;
(11) Liens arising from filing Uniform Commercial Code
financing statements regarding leases;
(12) Liens securing all of the Notes and Liens securing any
Note Guarantee;
(13) Liens securing Senior Debt or Guarantor Senior Debt and
all obligations related thereto;
(14) Liens existing on the Issue Date securing Indebtedness
outstanding on the Issue Date;
(15) Liens in favor of the Company or a Restricted Subsidiary;
(16) Liens securing Indebtedness and other obligations under
the Credit Agreement;
-25-
(17) Liens securing Purchase Money Indebtedness and all
obligations related thereto;
(18) Liens securing Acquired Indebtedness permitted to be
incurred under this Indenture and all obligations related thereto;
provided that the Liens do not extend to assets not subject to such
--------
Lien at the time of acquisition (other than improvements thereon) and
are no more favorable to the lienholders than those securing such
Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary;
(19) Liens on assets of a Person existing at the time such
Person is acquired or merged with or into or consolidated with the
Company or any Restricted Subsidiary (and not created in anticipation
or contemplation thereof);
(20) Liens to secure Refinancing Indebtedness of Indebtedness
secured by Liens referred to in the foregoing clauses (13), (14), (16),
(17) and (18); provided that in the case of clauses (14), (17), and
--------
(18) such Liens do not extend to any additional assets (other than
improvements thereon and replacements thereof);
(21) Liens to secure Attributable Indebtedness; provided that
--------
any such Lien shall not extend to or cover any assets of the Company or
any Restricted Subsidiary other than the assets which are the subject
of the Sale and Leaseback Transaction in which the Attributable
Indebtedness is incurred;
(22) those encumbrances and restrictions referred to in
clauses (3), (6), and (9) of Section 4.12;
(23) Liens consisting of rights of first refusal or options to
purchase ownership interest in any asset, property, Person or Equity
Interest, in each case, if not issued in connection with the incurrence
of Indebtedness or as credit support for Indebtedness or Disqualified
Equity Interests;
(24) Liens on the securities of any Unrestricted Subsidiary
that secure the Indebtedness of the Unrestricted Subsidiary;
(25) zoning restrictions, licenses, restrictions on the use of
real property or other minor irregularities; and
(26) Liens incurred in connection with Permitted Receivables
Financings.
"Permitted Receivables Financing" means any sale, conveyance or
-------------------------------
other transfer by the Company or any Restricted Subsidiary of accounts
receivable and related assets or
-26-
any pledge of such accounts receivable (or an interest therein in each case that
is part of a receivables financing transaction).
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Plan of Liquidation" with respect to any Person, means a plan that
-------------------
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (1) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (2) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition of all
or substantially all of the remaining assets of such Person to holders of Equity
Interests of such Person.
"PPM Asset Sales" means sales of assets to physician practice entities
---------------
or to physicians affiliated with physician practice entities in connection with
the termination or modification of the Management Services Agreement in effect
on the Issue Date with such physician practice entities or such affiliated
physicians.
"Preferred Stock" means, with respect to any Person, any and all
---------------
preferred or preference stock or other Equity Interests (however designated) of
such Person whether now outstanding or issued after the Issue Date.
"principal" means, with respect to the Notes, the principal of the
---------
Notes.
"Private Exchange" has the meaning set forth in the Registration
----------------
Rights Agreement.
"Private Exchange Notes" has the meaning set forth in the Registration
----------------------
Rights Agreement.
"Purchase Money Indebtedness" means Indebtedness, including
---------------------------
Capitalized Lease Obligations, of the Company or any Restricted Subsidiary
incurred for the purpose of financing all or any part of the purchase price or
construction cost (including property renovated, developed or otherwise
improved) of property, plant or equipment used in the business of the Company or
any Restricted Subsidiary or the cost of installation, construction or
improvement thereof; provided, however, that (1) the amount of such Indebtedness
-------- -------
shall not exceed such purchase price or cost, (2) such Indebtedness shall not be
secured by any asset other than the specified asset being financed or, in the
case of real property or fixtures, including additions and improvements, the
real property to which such asset is attached and equipment,
-27-
intangibles and rents customarily encumbered in connection therewith and (3)
such Indebtedness shall be incurred within 360 days after such acquisition of
such asset by the Company or such Restricted Subsidiary or such installation,
renovation, development, construction or improvement or the commencement of full
operation of the property.
"Qualified Equity Interests" means Equity Interests of the Company
--------------------------
other than Disqualified Equity Interests; provided that such Equity Interests
--------
shall not be deemed Qualified Equity Interests to the extent sold or owed to a
Subsidiary of the Company or financed, directly or indirectly, using funds (1)
borrowed from the Company or any Subsidiary of the Company until and to the
extent such borrowing is repaid or (2) contributed, extended, guaranteed or
advanced by the Company or any Subsidiary of the Company (including, without
limitation, in respect of any employee stock ownership or benefit plan).
"Qualified Equity Offering" means the issuance and sale of Qualified
-------------------------
Equity Interests of the Company to any Person other than a Subsidiary of the
Company.
"redeem" means to redeem, repurchase, purchase, defease, retire,
------
discharge or otherwise acquire or retire for value; and "redemption" shall have
----------
a correlative meaning.
"Redesignation" has the meaning given to such term in Section 4.16.
-------------
"refinance" means to refinance, repay, prepay, replace, renew or
---------
refund.
"Refinancing Indebtedness" means Indebtedness of the Company or a
------------------------
Restricted Subsidiary issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used substantially concurrently to redeem,
refinance, defease or refund (collectively "repay") in whole or in part, or
-----
constituting an amendment of, any Indebtedness of the Company or such Restricted
Subsidiary (the "Refinanced Indebtedness") in a principal amount not in excess
-----------------------
of the principal amount (or accreted value, if applicable) of the Refinanced
Indebtedness so repaid or amended (plus the amount of any prepayment premiums
and other reasonable expenses incurred in connection therewith) (or, if such
Refinancing Indebtedness refinances Indebtedness under a revolving credit
facility or other agreement providing a commitment for subsequent borrowings,
with a maximum commitment not to exceed the maximum commitment under such
revolving credit facility or other agreement); provided that:
--------
(1) the Refinancing Indebtedness is the obligation of the same Person
as that of the Refinanced Indebtedness, the Company and/or one or more
Guarantors;
(2) if the Refinanced Indebtedness was subordinated to or pari passu
---- -----
with the Notes or the Note Guarantees, as the case may be, then such
Refinancing Indebtedness, by its terms, is expressly pari passu with (in
---- -----
the case of Refinanced Indebtedness
-28-
that was pari passu with) or subordinate in right of payment to (in the
---- -----
case of Refinanced Indebtedness that was subordinated to) the Notes or the
Note Guarantees, as the case may be, at least to the same extent in all
material respects as the Refinanced Indebtedness;
(3) the Refinancing Indebtedness is scheduled to mature either (a) no
earlier than the Refinanced Indebtedness being repaid or amended or (b)
after the maturity date of the Notes; and
(4) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the Notes has a
Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is incurred that is equal to or greater than the Weighted Average Life to
Maturity of the portion of the Refinanced Indebtedness being repaid or
amended that is scheduled to mature on or prior to the maturity date of the
Notes.
"Registration Rights Agreement" means (i) with respect to the Initial
-----------------------------
Notes issued on the Issue Date, the Registration Rights Agreement, dated as of
the date hereof, between the Company and UBS Warburg LLC, and (ii) with respect
to each issuance of Additional Notes in a transaction exempt from the
registration requirements of the Securities Act, the registration rights
agreement among the Company and the Persons purchasing the Additional Notes.
"Related Person" of any specified Person means any other Person
--------------
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Representative" means any agent or representative in respect of any
--------------
Designated Senior Debt; provided that if, and for so long as, any Designated
--------
Senior Debt lacks such representative, then the Representative for such
Designated Senior Debt shall at all times constitute the holder or holders of a
majority in outstanding principal amount of such Designated Senior Debt.
"Restricted Certificated Registered Note" means a Certificated
---------------------------------------
Registered Note bearing the Securities Act Legend issued in registered form
without coupons in a principal amount of $1,000 or integral multiples thereof.
-29-
"Restricted Global Notes" means the Global Note(s) bearing the
-----------------------
Securities Act Legend issued in registered form without coupons in a principal
amount of $1,000 or integral multiples thereof.
"Restricted Notes" means the Restricted Certificated Registered Notes
----------------
and the Restricted Global Note(s).
"Restricted Payment" means any of the following:
------------------
(1) the declaration or payment of any dividend or any other
distribution on Equity Interests (excluding, for the avoidance of doubt,
payment of principal and interest on any debt security that is convertible
or exchangeable for capital stock) of the Company or any Restricted
Subsidiary or any payment made to the direct or indirect holders (in their
capacities as such) of any such Equity Interests of the Company or any
Restricted Subsidiary, including, without limitation, any payment in
connection with any merger or consolidation involving the Company but
excluding (a) dividends or distributions payable solely in Qualified Equity
Interests and (b) in the case of Restricted Subsidiaries, dividends or
distributions payable to the Company or to a Restricted Subsidiary and pro
rata dividends or distributions payable to minority stockholders of any
Restricted Subsidiary;
(2) the purchase or redemption of any Equity Interests of the Company
or any Restricted Subsidiary, including, without limitation, any payment in
connection with any merger or consolidation involving the Company but
excluding any such Equity Interests held by the Company or any Restricted
Subsidiary and pro rata purchases or redemptions of any Equity Interest
held by minority stockholders of any Restricted Subsidiary;
(3) any Investment other than a Permitted Investment;
(4) any redemption prior to the scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may
be, in respect of Subordinated Indebtedness, other than the redemption of
the subordinated physician notes in connection with conversions of
physician management practice entities and/or physicians affiliated with
such physician management practice entities to the service line structure
or the termination of a Management Services Agreement as in effect on the
Issue Date; or
(5) payment in lieu of fractional shares not to exceed $1.0 million.
"Restricted Payments Basket" has the meaning given to such term in
--------------------------
Section 4.11.
-30-
"Restricted Subsidiary" means any Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
---
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transactions" means with respect to any Person an
-------------------------------
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person of any asset of such Person which has been or is being sold or
transferred by such Person to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such asset.
"SEC" means the United States Securities and Exchange Commission.
---
"Secretary's Certificate" means a certificate signed by the Secretary
-----------------------
of the Company.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
--------------
"Senior Debt" means the principal of, premium, if any, and interest
-----------
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such is an allowed claim under applicable law) on any
Indebtedness of the Company, together with all interest, fees, indemnities and
other obligations and other amounts owing in respect thereof, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes.
Without limiting the generality of the foregoing, "Senior Debt" shall
also include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) and other obligations on, and
all other amounts owing in respect of:
(1) all monetary obligations of every nature under, or with respect
to, the Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit,
fees, expenses and indemnities (and guarantees thereof); and
(2) all Hedging Obligations in respect of the Credit Agreement;
-31-
in each case whether outstanding on the Issue Date or thereafter
incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Company to the Company or any of
its Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any of its Subsidiaries;
(3) obligations to trade creditors in connection with
obtaining goods, materials or services;
(4) Indebtedness represented by Disqualified Equity Interests;
(5) any liability for taxes owed or owing by the Company;
(6) that portion of any Indebtedness incurred in violation of
Section 4.10 (but, as to any such obligation, no such violation shall
be deemed to exist for purposes of this clause (6) if the holder(s) of
such obligation or their representative shall have received an
Officers' Certificate of the Company to the effect that the incurrence
of such Indebtedness does not (or, in the case of revolving credit
indebtedness, that the incurrence of the entire committed amount
thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture);
(7) Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of Title 11, United States Code, is
without recourse to the Company; and
(8) any Indebtedness which is, by its express terms or by
express agreement, subordinated in right of payment to any other
Indebtedness of the Company.
"Significant Subsidiary" means (1) any Restricted Subsidiary
----------------------
that would be a "significant subsidiary" as defined in Regulation S-X
promulgated pursuant to the Securities Act as such Regulation is in effect on
the Issue Date and (2) any Restricted Subsidiary that, when aggregated with all
other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in Section 6.01(a)(7) or 6.01(a)(8) has
occurred and is continuing, would constitute a Significant Subsidiary under
clause (1) of this definition.
"Subordinated Indebtedness" means Indebtedness of the Company or
-------------------------
any Guarantor that is subordinated in right of payment to the Notes or the Note
Guarantees, respectively.
-32-
"Subsidiary" means, with respect to any Person:
----------
(1) any corporation, limited liability company, association or
other business entity of which more than 50% of the total voting power
of the Equity Interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Board of Directors
thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or
a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such Person
or of one or more Subsidiaries of such Person (or any combination
thereof).
Unless otherwise specified, "Subsidiary" refers to a Subsidiary of the Company.
"Total Tangible Assets" means, as of any date, the total amount
---------------------
of tangible assets of the Company and the Restricted Subsidiaries on a
consolidated basis determined in accordance with GAAP at the end of the fiscal
quarter immediately preceding such date.
"TIA" means the Trust Indenture Act of 1939, as amended.
---
"Trust Officer" means any officer of the Trustee assigned by the
-------------
Trustee to administer its corporate trust matters.
"Trustee" means the party named as such in this Indenture until
-------
a successor replaces it and thereafter means the successor.
"Unrestricted Certificated Registered Note" means a
-----------------------------------------
Certificated Registered Note not bearing the Securities Act Legend issued in
registered form without coupons in a principal amount of $1,000 or integral
multiples thereof, including, without limitation, the Exchange Notes.
"Unrestricted Global Note" means one or more Global Note(s) not
------------------------
bearing the Securities Act Legend issued in registered form without interest
coupons in a principal amount of $1,000 or integral multiples thereof, and
deposited with the Depository, including, without limitation, the Exchange
Notes.
"Unrestricted Notes" means the Unrestricted Global Notes and the
------------------
Unrestricted Certificated Registered Notes.
-33-
"Unrestricted Subsidiary" means (1) any Subsidiary that at the time of
-----------------------
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Company in accordance with Section 4.16 and (2) any Subsidiary
of an Unrestricted Subsidiary.
"U.S. Government Obligations" means direct non-callable obligations of,
---------------------------
or obligations guaranteed by, the United States of America for the payment of
which guarantee or obligations the full faith and credit of the United States is
pledged.
"Voting Stock" with respect to any Person, means securities of any
------------
class of Equity Interests of such Person entitling the holders thereof (whether
at all times or only so long as no senior class of stock or other relevant
equity interest has voting power by reason of any contingency) to vote in the
election of members of the Board of Directors of such Person.
"Weighted Average Life to Maturity" when applied to any Indebtedness at
---------------------------------
any date, means the number of years obtained by dividing (1) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (2) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of which 100%
-----------------------
of the Equity Interests (except for directors' qualifying shares or certain
minority interests owned by other Persons solely due to local law requirements
that there be more than one stockholder, but which interest is not in excess of
what is required for such purpose) are owned directly by the Company or through
one or more Wholly-Owned Subsidiaries.
Section 1.02. Other Definitions.
-----------------
Defined in
Term Section(s)
- ---- ----------
"Affiliate Transaction" .......................................... 4.14
---------------------
"Agent Members" .................................................. 2.01
-------------
"Base Guaranty Liability" ........................................ 11.01
-----------------------
"Certificated Note" .............................................. 2.01
-----------------
"Change of Control Offer" ........................................ 4.08
-----------------------
"Change of Control Purchase Price" ............................... 4.08
--------------------------------
"Clearstream" .................................................... 2.01
-----------
"Coverage Ratio Exception" ....................................... 4.10
------------------------
"Covenant Defeasance" ............................................ 8.01
-------------------
"DTC" ............................................................ 2.01
---
-34-
Defined in
Term Section(s)
- ---- ----------
"Euroclear" .................................................. 2.01
---------
"Event of Default" ........................................... 6.01
----------------
"Excess Proceeds" ............................................ 4.15
---------------
"Global Legend" .............................................. 2.01
-------------
"Global Notes" ............................................... 2.01
------------
"Global Note Holder" ......................................... 2.01
------------------
"Institutional Accredited Investor" .......................... 2.01
---------------------------------
"Legal Defeasance" ........................................... 8.01
----------------
"Legal Holiday" .............................................. 12.07
-------------
"Net Proceeds Deficiency" .................................... 4.15
-----------------------
"Net Proceeds Offer" ......................................... 4.15
------------------
"Offered Price" .............................................. 4.15
-------------
"Offshore Notes Exchange Date" ............................... 2.01
----------------------------
"Parri Passu Indebtedness Price" ............................. 4.15
------------------------------
"Paying Agent" ............................................... 2.03
------------
"Payment Amount" ............................................. 4.15
--------------
"Payment Blockage Notice" .................................... 9.03, 11.04
-----------------------
"Permitted Indebtedness" ..................................... 4.10
----------------------
"Qualified Institutional Buyer" .............................. 2.01
-----------------------------
"Redesignation" .............................................. 4.16
-------------
"Register" ................................................... 2.05
--------
"Registrar" .................................................. 2.03
---------
"Regulation S Global Notes" .................................. 2.01
-------------------------
"Regulation S Permanent Global Note" ......................... 2.01
----------------------------------
"Regulation S Temporary Global Note" ......................... 2.01
----------------------------------
"Restricted Global Note" ..................................... 2.01
----------------------
"Restricted Payments Basket" ................................. 4.11
--------------------------
"Securities Act Legend" ...................................... 2.01
---------------------
"Successor" .................................................. 5.01
---------
Section 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes.
--------------------
-35-
"indenture security holder" means a Holder.
-------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the
----------------- ---------------------
Trustee.
"obligor" on the Indenture Notes means the Company. All other
-------
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them by such definitions.
Section 1.04. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
--
(4) words in the singular include the plural and in the
plural include the singular;
(5) "including" means including, without limitation;
---------
(6) provisions apply to successive events and transactions;
and
(7) "herein," "hereof" and "hereunder" and other words of
------ ------ ---------
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision.
ARTICLE 2
THE NOTES
---------
Section 2.01. Form and Dating.
---------------
(a) Form Generally.
--------------
(i) Notes offered and sold in reliance on Rule 144A
promulgated under the Securities Act shall be issued initially in the form of
one or more permanent global Notes
-36-
(each a "Restricted Global Note"), registered in the name of the Depository or
----------------------
its nominee, substantially in the form of Exhibit A, deposited with the Trustee,
---------
as custodian for the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as herein provided. The aggregate principal amount
of the Restricted Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
(ii) Notes offered and sold in offshore transactions in
reliance on Regulation S promulgated under the Securities Act shall be issued
initially in the form of one or more temporary global Notes, registered in the
name of the global note holder for the account of the Depositary or its nominee
(the "Global Note Holder"), substantially in the form of Exhibit A (the
------------------ ---------
"Regulation S Temporary Global Notes"), deposited with the Trustee, as custodian
-----------------------------------
for the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as provided herein. Thereafter, following receipt
by the trust administrator responsible for administering this Indenture of an
Officer's Certificate of the Company to such effect, at any time on or after the
date which is 40 days after the Issue Date (the "Offshore Notes Exchange Date"),
----------------------------
the Trustee shall exchange the outstanding principal amount of Notes represented
by the Regulation S Temporary Global Notes for one or more permanent global
Notes registered in the name of the Depositary or its nominee, substantially in
the form hereinabove recited without the Securities Act Legend (as defined
below) (the "Regulation S Permanent Global Notes" and together with the
-----------------------------------
Regulation S Temporary Global Notes, the "Regulation S Global Notes") duly
-------------------------
executed by the Company and authenticated by the Trustee as provided herein. In
connection with such exchange, the Trustee shall hold the Regulation S Permanent
Global Notes as custodian for the Depositary or its nominee, reflect on its
books and records the date of such exchange and cancel the Regulation S
Temporary Global Notes. Restricted Global Notes and Regulation S Global Notes
are sometimes referred to herein as the "Global Notes." The aggregate principal
------------
amount of Regulation S Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
(iii) Following the original issuance of Notes, Notes offered
and sold to an institutional "accredited investor" (within the meaning of Rule
501(a) (1), (2), (3) or (7) of Regulation D promulgated under the Securities Act
and which is not a Qualified Institutional Buyer (as defined below), an
"Institutional Accredited Investor") shall be issued in the form of one or more
---------------------------------
physical certificated notes (each a "Certificated Note") registered in the name
-----------------
of the purchaser thereof. Certificated Notes may only be issued in the
circumstances described in subparagraph (c)(ii) and paragraph (d) below.
-37-
(b) Restrictive Legends.
-------------------
(i) Each Restricted Global Note, each Regulation S Global
Note and each Certificated Note shall bear the following legend (the "Securities
----------
Act Legend") on the face thereof until the provisions of paragraph (d)(ii) or
- ----------
(d)(iii) relating to the removal of such legend are complied with:
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES ACT"), AND
THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF
THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF US ONCOLOGY, INC.
(THE "COMPANY") THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (i) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT IN THE
CASE OF A TRANSFER PURSUANT TO CLAUSE (d) SUCH TRANSFER IS SUBJECT TO
THE RECEIPT BY THE REGISTRAR (AND THE COMPANY, IF IT SO REQUESTS) OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (ii) TO
THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE
-38-
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE
INDENTURE GOVERNING THE NOTES AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(ii) Each Global Note shall bear the following legends (the
"Global Legend") on the face thereof:
-------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A
NEW YORK CORPORATION ("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 IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL NOTE IS EXCHANGEABLE FOR
NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE 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) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
The Notes may have such other notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note shall be
dated the date of its authentication.
-39-
(c) Book Entry Provisions for Global Notes.
--------------------------------------
(i) Each Restricted Global Note initially shall (i) be
registered in the name of a nominee of the Depositary and (ii) bear legends as
set forth in paragraph (b) above. Each Regulation S Temporary Global Note
initially shall (i) be registered in the name of a nominee of the Depositary for
the accounts of Euroclear Bank, S.A./N.V., as operator of the Euroclear System
("Euroclear") and Clearstream Banking, societe anonyme ("Clearstream"), (ii) be
--------- -----------
delivered to the Trustee as custodian on behalf of the Depositary and (iii) bear
legends as set forth in paragraph (b) above. Each Regulation S Permanent Global
Note initially shall (i) be registered in the name of a nominee of the
Depositary, (ii) be delivered to the Trustee as custodian on behalf of the
Depositary and (iii) bear the legend as set forth in subparagraph (b)(ii) above.
Prior to the Offshore Notes Exchange Date, interests in the Regulation S
Temporary Global Notes may only be held through Euroclear and Clearstream.
Following the Offshore Notes Exchange Date, interests in the Regulation S
Permanent Global Note may be held by any member of, or participants in, the
Depositary ("Agent Members").
-------------
Agent Members shall have no rights under this Indenture with
respect to any Global Note held on their behalf by the Depositary, or the
Trustee as its custodian, or under the Global Note, and the Depositary may be
treated by the Company, the Trustee and any agent of any of them as the absolute
owner of such Global Note for all purposes whatsoever including, without
limitation, the giving of notices and action upon instructions. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of any of them from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Global Note.
(ii) Except as provided in paragraph (c)(iv), transfers of
a Global Note shall be limited to transfers of such Global Note in whole, but
not in part, to the Depositary, its successors or their respective nominees.
Certificated Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in any Restricted Global Note or Regulation S Global
Note, respectively, if (i) the Company notifies the Trustee that DTC is
unwilling or unable to continue as Depositary for such Restricted Global Note or
Regulation S Global Note, as the case may be, and a successor depository is not
appointed by the Company within 90 days of such notice, (ii) the Company, in its
sole discretion, shall so request or (iii) an Event of Default has occurred and
is continuing and the Registrar shall have received a request from the
Depositary to issue such Certificated Notes.
(iii) Any beneficial interest in one of the Global Notes
that is transferred to a Person who takes delivery in the form of an interest in
another Global Note will, upon transfer, cease to be an interest in such Global
Note previously held and become an interest in the
-40-
other Global Note and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in
such other Global Note for as long as it remains such an interest.
(iv) In connection with the transfer of an entire Restricted Global
Note or Regulation S Global Note to beneficial owners pursuant to the second
sentence of subparagraph (ii) of this paragraph, the Restricted Global Note or
Regulation S Global Note, as the case may be, shall be deemed to be surrendered
to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest, as notified by the
Depositary, in such Restricted Global Note or Regulation S Global Note, as the
case may be, an equal aggregate principal amount of Certificated Notes of
authorized denominations.
(v) Any Certificated Note delivered in exchange for an interest in a
Restricted Global Note pursuant to subparagraph (ii) or (iv) of this paragraph
(c) shall, except as otherwise provided by paragraph (d)(iii), bear the
Securities Act Legend.
(d) Special Definitive Provisions. Unless and until the Securities
-----------------------------
Act Legend is removed from a Certificated Note or Global Note pursuant to
subparagraph (iii) below (including as a result of an exchange completed on the
Offshore Notes Exchange Date pursuant to paragraph (a)(ii) above), the following
additional provisions shall apply to the proposed transfer, exchange or
replacement of Certificated Notes:
(i) The following provisions shall apply with respect to the
registration of any proposed transfer of a Note (or interest in a
Global Note) to any Institutional Accredited Investor which is not a
Qualified Institutional Buyer (within the meaning of Rule 144A under
the Securities Act, a "Qualified Institutional Buyer") or to a
-----------------------------
Non-U.S. Person (as defined in Regulation S):
(A) The Registrar shall register the transfer of any
Certificated Note containing the Securities Act Legend or any
interest in a Restricted Global Note if (x) the requested
transfer is after the time period referred to in Rule 144(k)
under the Securities Act as in effect with respect to such
transfer or (y) the proposed transferee (excluding Non-U.S.
Persons) has delivered to the Registrar a certificate
substantially in the form of Exhibit C-1 hereto or if the
-----------
transferee is a Non-U.S. Person, the proposed transferor has
delivered to the Registrar a certificate substantially in the
form of Exhibit C-2 hereto.
-----------
(B) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global Note and the proposed
transferee is an Institutional Accredited Investor which is not a
Qualified Institutional Buyer, upon receipt by the Depositary and
Registrar of (x) the documents required by sub-
-41-
paragraph (d)(i)(A) above (if such transfer is pursuant to clause (y)
of subparagraph (d)(i)(A) above) and (y) instructions given in
accordance with the Registrar's procedures, the Registrar shall
reflect on its books and records the date of such transfer and a
decrease in the principal amount of such Restricted Global Note in an
amount equal to the principal amount of the beneficial interest in
such Restricted Global Note to be transferred and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
Certificated Notes of like tenor and amount.
(ii) The following provisions shall apply with respect to the
registration of any proposed transfer of a Note (or interest in a Global
Note) to a Qualified Institutional Buyer:
(A) The Registrar shall register the transfer of any Certificated
Note containing the Securities Act Legend if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act as in effect with respect to such transfer or (y) such
transfer is being made by a proposed transferor who has checked the
box provided for on the form of Note stating, or has otherwise advised
the Company and the Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Note stating, or
has otherwise advised the Company and the Registrar in writing, that
it is purchasing the Note for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a Qualified Institutional Buyer within the
meaning of Rule 144A, and is aware that the sale to it is being made
in reliance on Rule 144A and the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(B) If the Note to be transferred is a Certificated Note
containing the Securities Act Legend and the proposed transferee is an
Agent Member holding such interest on behalf of a Qualified
Institutional Buyer, upon receipt by the Registrar of (x) the
documents referred to in subparagraph (d)(i)(A) above (if such
transfer is pursuant to clause (y) of subparagraph (d)(i)(A) above)
and (y) instructions given in accordance with the Registrar's
procedures, the Registrar shall reflect on its books and records the
date of such transfer and an increase in the principal amount of the
Restricted Global Note in an amount equal to the principal amount of
the Certificated Note to be transferred and the Trustee shall cancel
the Certificated Note so transferred.
-42-
(iii) Upon the registration of transfer, exchange or replacement
of Notes bearing the Securities Act Legend, the Registrar shall
deliver only Notes that bear the Securities Act Legend unless (x) the
requested transfer, exchange or replacement (A) is after the time
period referred to in Rule 144(k) under the Securities Act as in
effect with respect to such transfer, exchange or replacement or (B)
is made under the circumstances contemplated by paragraph (a)(ii) of
this Section 2.01 or (y) is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Company to the effect that
neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the
Securities Act. Upon the registration of transfer, exchange or
replacement of Notes not bearing the Securities Act Legend, the
Registrar shall deliver Notes that do not bear the Securities Act
Legend.
(iv) By its acceptance of any Note bearing the Securities Act
Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth herein and in the Securities Act
Legend and agrees that it will transfer such Note only as provided
herein. The Registrar shall not register a transfer of any Note unless
such transfer complies with the restrictions on transfer of such Note
set forth herein. In connection with any transfer of Notes, each
Holder agrees by its acceptance of the Notes to furnish the Registrar
or the Company such certifications, legal opinions or other
information as either of them may reasonably require to confirm that
such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the
Securities Act; provided that the Registrar shall not be required to
--------
determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions
or other information. The Registrar shall retain copies of all
letters, notices and other written communications received pursuant to
this paragraph (d) in accordance with its customary procedures. The
Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Registrar.
Section 2.02. Execution and Authentication.
----------------------------
The Notes shall be executed by an Officer or any authorized
signatory as identified in an Officers' Certificate (pursuant to a power of
attorney or other similar instrument). The signature of any such Officer (or
authorized signatory) on the Notes shall be by manual or facsimile signature in
the name and on behalf of the Company.
If any Officer whose signature is on a Note no longer holds that
office at the time the Trustee or authenticating agent authenticates the Note,
the Note shall be valid nevertheless.
-43-
A Note shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original
issue in the aggregate principal amount not to exceed $175,000,000 in one or
more series, (ii) Private Exchange Notes from time to time only in exchange for
a like principal amount of Initial Notes and (iii) Unrestricted Notes from time
to time only (x) in exchange for a like principal amount of Initial Notes or (y)
in an aggregate principal amount of not more than the excess of $175,000,000
over the sum of the aggregate principal amount of (A) Initial Notes then
outstanding, (B) Private Exchange Notes then outstanding and (C) Unrestricted
Notes issued in accordance with (iii)(x) above, in each case upon a written
order of the Company in the form of an Officers' Certificate of the Company.
Each such written order shall specify the amount of Notes to be authenticated
and the date on which the Notes are to be authenticated, whether the Notes are
to be Initial Notes, Private Exchange Notes or Unrestricted Notes and whether
the Notes are to be issued as Certificated Notes or Global Notes or such other
information as the Trustee may reasonably request.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to clauses (i) and (iii) of the first sentence of the immediately
preceding paragraph, the Company shall use its reasonable efforts to obtain the
same "CUSIP" number for such Notes as is printed on the Notes outstanding at
such time; provided, however, that if any series of Notes issued under this
-------- -------
Indenture subsequent to the Issue Date is determined, to be a different class of
security than the Notes outstanding at such time for federal income tax
purposes, the Company may obtain a "CUSIP" number for such Notes that is
different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture shall vote
and consent together on all matters as one class and no series of Notes will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the
"Authenticating Agent") reasonably acceptable to the Company to authenticate
--------------------
Notes. Unless otherwise provided in the appointment, 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
Authenticating Agent. An Authenticating Agent has the same rights as an Agent to
deal with the Company or with any Affiliate of the Company.
The Notes shall be issuable only in registered form without
coupons and only in integral multiples of $1,000 and any integral multiple
thereof.
-44-
Section 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
---------
office or agency where Notes may be presented for payment ("Paying Agent");
------------
provided that payment of interest may, at the option of the Company, be made by
- --------
check mailed to a Holder at his registered address. 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 co-paying agents. The term
"Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company may change
any Registrar or Paying Agent without notice to the Holders.
The Company appoints the Trustee as Paying Agent and Registrar.
Section 2.04. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all moneys held by such Paying Agent for the payment of
principal of or interest on the Notes, and shall notify the Trustee in writing
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 to the Trustee all
money held by it upon demand. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee are to account for any funds
disbursed. Upon payment over to the Trustee and accounting for any funds
disbursed, such Paying Agent shall have no further liability for the money. If
the Company, a Subsidiary or a Related Person or any of them acts as Paying
Agent, it shall segregate and hold as a separate trust fund all money held by it
as Paying Agent.
Section 2.05. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders (the "Register") and shall otherwise comply with TIA. If the Trustee is
--------
not the Registrar, the Company shall furnish to the Trustee on or before each
interest payment date and at such other times as the Trustee may reasonably
request in writing a list, in such form and as of such date as the Trustee may
require, of the names, addresses and tax identification numbers of Holders.
-45-
Section 2.06. Transfer and Exchange.
---------------------
A Holder will be able to register the transfer of or exchange Notes
only in accordance with the provisions of this Indenture. Where Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange if the requirements of Section 8-401(a) of the New York Uniform
Commercial Code as then in effect are met. To permit registrations of transfer
and exchanges, the Trustee shall authenticate Notes at the Registrar's written
(if the Registrar is not the Trustee) request. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents (each in a form satisfactory to the Company and the Registrar) and to
pay any taxes and fees required by law or permitted by this Indenture. Without
the prior consent of the Company, the Registrar is not required (1) to issue or
register the transfer of or exchange any Note selected for redemption, (2) to
issue or register the transfer of or exchange any Note for a period of 15 days
before a selection of Notes to be redeemed or (3) to register the transfer or
exchange of a Note between a record date and the next succeeding interest
payment date.
The Notes will be issued in registered form and the registered Holder
will be treated as the owner of such Note for all purposes.
No Holder shall Incur a service charge for any registration of
transfer or exchange of Notes, but the Company or the Trustee, as appropriate,
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer, registration of
transfer or exchange of Notes, other than exchanges pursuant to Section 2.10,
3.06 or 10.05 not involving any transfer.
Section 2.07. Replacement Notes.
-----------------
If the Holder of a Note claims that the Note has been mutilated, lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the New
York Uniform Commercial Code are met and, in the case of a mutilated Note, such
mutilated Note is surrendered to the Trustee. If required by the Trustee or the
Company, an indemnity bond must be sufficient, in the judgment of both, to
protect the Company, the Trustee, or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company and the Trustee may charge for
their expenses in replacing a Note.
In case any such mutilated, destroyed or wrongfully taken Notes has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note when due.
-46-
Every replacement Note is an Obligation of the Company.
Section 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. A Note does not cease to
be outstanding because the Company or one of its Subsidiaries or Related Persons
holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Note is held by a bona fide purchaser.
---- ----
If the Paying Agent (other than the Company) holds on a redemption
date, repurchase date or maturity date money sufficient to pay Notes payable on
that date, then on and after that date, such Notes shall be deemed to be no
longer outstanding and interest on them shall cease to accrue.
Section 2.09. Notes Held by the Company or a Related Person.
---------------------------------------------
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 a Subsidiary or a Related Person shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which the Trustee
actually knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee 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. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
Section 2.11. Cancellation.
------------
The Company or any Guarantor 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 shall cancel all Notes surrendered for registration of
transfer, exchange, payment or cancellation and may destroy canceled Notes and
deliver a certificate of any such destruction to the Company. The
-47-
Company may not issue new Notes to replace Notes that it has paid or delivered
to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
------------------
If and to the extent the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent not prohibited by applicable statute or case law, interest at the rate
then borne by the Notes on the defaulted interest. It shall pay the defaulted
interest to the persons who are Holders on a subsequent special record date. The
Company or Trustee (at the direction of the Company) shall fix such record date
and payment date. At least 15 days before the special record date, the Company
or Trustee (at the direction of the Company, provided that the Trustee shall
--------
have received the same at least 10 but not more than 30 days prior thereto or
such shorter period prior thereto as is acceptable to the Trustee) shall mail to
Holders a notice that states the record date, payment date and amount of
interest to be paid.
Section 2.13. Persons Deemed Owners.
---------------------
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may
conclusively presume and shall treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of and (subject to Section 2.12) interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. None of the Company, the Guarantors, the
Trustee, any Paying Agent or the Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of or actions taken in respect of beneficial ownership interests of a Note in
global form or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests (including but not limited to CUSIP numbers,
if any).
Section 2.14. Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
Section 2.15. CUSIP Numbers
-------------
The Company, in issuing the Notes, may use CUSIP numbers (if then
generally in use), and, if so, the Trustee shall use the CUSIP numbers for
purposes of the identification of the Notes in notices as a convenience to
Holders; provided that any such notice may state that no representation is made
--------
by the Trustee 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
-48-
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 shall promptly notify the Trustee of any change in CUSIP
numbers.
Section 2.16. Issuance of Additional Notes.
----------------------------
The Company shall be entitled to issue Additional Notes under this
Indenture which shall have identical terms as the Notes issued on the Issue
Date, other than with respect to the date of issuance, issue price, and amount
of interest payable on the first payment date applicable thereto (and, if such
Additional Notes shall be issued in the form of Exchange Notes, other than with
respect to transfer restrictions); provided that such issuance is not prohibited
--------
by Section 4.10. The Initial Notes issued on the Issue Date, any Additional
Notes and all Exchange Notes issued in exchange therefor shall be treated as a
single class for all purposes under this Indenture.
With respect to any Additional Notes, the Company shall set forth in a
resolution of its Board of Directors and in a Company Request, a copy of each of
which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date and the CUSIP number of such
Additional Notes and the amount of interest payable on the first payment
date applicable thereto; provided, however, that no Additional Notes may be
-------- -------
issued at a price that would cause such Additional Notes to have "original
issue discount" within the meaning of Section 1273 of the Internal Revenue
Code of 1986, as amended; and
(3) whether such Additional Notes shall be Notes bearing the Private
Placement Legend and issued in the form of Initial Notes or shall be
Unrestricted Notes issued in the form of Exchange Notes.
ARTICLE 3
REDEMPTION
----------
Section 3.01. Notices to Trustee.
------------------
If the Company wants to redeem all or a portion of the Notes pursuant
to paragraph 7 and 8 of the Notes, it shall provide written notice to the
Trustee at least 45 but not more than 60 days prior to the redemption date
(unless a shorter notice period shall be satis-
-49-
factory to the Trustee) of the redemption date and the principal amount of Notes
to be redeemed.
Section 3.02. Selection of Notes To Be Redeemed.
---------------------------------
In the event that less than all of the Notes are to be redeemed at any
time pursuant to an optional redemption, selection of the Notes for redemption
will be made by the Trustee 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 then listed on a national security exchange, on a pro rata basis,
--- ----
by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Notes of a principal amount of $1,000 or less shall
- -------- -------
be redeemed in part. In addition, if a partial redemption is made pursuant to
paragraph 7(b) of the Notes selection of the Notes or portions thereof for
redemption shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of The Depository
--- ----
Trust Company), unless that method is otherwise prohibited.
Section 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail by first-class mail a notice of redemption to each Holder
whose Notes are to be redeemed.
The notice shall identify the Notes and the principal amount thereof
to be redeemed (including the applicable CUSIP number, if any) and shall state:
(1) the redemption date or the event that will result in such
redemption;
(2) the redemption price (including the amount of accrued interest
to be paid on the Notes called for redemption);
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price; and
(5) that interest on Notes called for redemption ceases to accrue on
and after the redemption date.
(6) in the case of Notes to be redeemed in part, the portion of the
principal amount of the Note to be redeemed.
At the Company's written direction (which shall be delivered to the
Trustee at least 45 days (or such shorter period as the Trustee may agree) prior
to the redemption date),
-50-
the Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. In such event the Company shall provide the Trustee with the
information required by clauses (1) through (6) in its written notice to the
Trustee.
Section 3.04. Effect of Notice of Redemption.
------------------------------
Once a notice of redemption is mailed, Notes or portions thereof
called for redemption become due and payable on the redemption date at the
redemption price and, on and after such redemption date (unless the Company
shall default in the payment of the redemption price), such Notes shall cease to
bear interest. Upon surrender to the Paying Agent, such
Notes shall be paid at the redemption price plus accrued and unpaid
interest and Additional Interest, if any, to the redemption date.
Section 3.05. Deposit of Redemption Price.
---------------------------
On or before 11:00 A.M. New York time on the redemption date, the
Company shall deposit with the Paying Agent money in immediately available funds
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on the redemption date. The Trustee or the Paying Agent shall return
to the Company any money not required for that purpose less the expenses of the
Trustee as provided herein.
Section 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for the Holder a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
---------
Section 4.01. Payment of Notes.
----------------
The Company shall pay the principal of and interest (including any
Additional Interest as provided in the Registration Rights Agreement) on the
Notes on the dates and in the manner expressly provided in the Notes. Principal
and interest shall be considered paid on the date due and payable if the Paying
Agent holds on that date money sufficient to pay all principal and interest then
due and payable. The Company shall pay interest on overdue principal at the rate
borne by the Notes. The Company shall pay interest on overdue installments of
interest at the same rate to the extent not prohibited by applicable statute or
case law.
-51-
Section 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
--------
however, that no such designation or rescission shall in any manner relieve the
- -------
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee in the City of Dallas, State of Texas, an agency of the Company in
accordance with Section 2.03.
Section 4.03. Reports to Holders.
------------------
Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file these Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual information only, a report on the annual
financial statements by the Company's certified independent accountants;
and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file these reports.
In addition, whether or not required by the SEC, the Company shall file a copy
of all of the information and reports referred to in clauses (1) and (2) above
with the SEC for public availability within the time periods specified in the
SEC's rules and regulations (unless the SEC will not accept the filing) and make
the information available to securities analysts and pro-
-52-
spective investors upon request. The Company and the Guarantors have agreed
that, for so long as any Notes remain outstanding, the Company shall furnish to
the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 4.04. Compliance Certificate.
----------------------
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officer's Certificate stating whether or
not the signatories know of any Default by the Company in performing any of its
obligations under this Indenture and the Notes. If the Company has knowledge of
any such Default, the certificate shall describe the Default and its status.
Section 4.05. Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 4.06. Corporate Existence.
-------------------
Subject to Article 5, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of its Restricted Subsidiaries in
accordance with the respective organizational documents of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises to
the Company and its Restricted Subsidiaries; provided, however, that the Company
-------- -------
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any Restricted Subsidiary if (i) such preservation or
existence is not material to the conduct of business of the Company and its
Restricted Subsidiaries taken as a whole, and (ii) the loss of such right,
license or franchise or the dissolution of such Restricted Subsidiary does not
have a material adverse impact on the Holders.
Section 4.07. Notice of Default.
-----------------
In the event that any Default under Section 6.01 hereof shall occur,
the Company shall give prompt written notice of such Default to the Trustee
specifying such Default and what action the Company is taking or proposes to
take with respect thereto.
-53-
Section 4.08. Change of Control.
-----------------
(a) Upon the occurrence of any Change of Control unless the Company
has exercised its option to redeem the Notes in accordance with paragraph 8 of
the Notes, each Holder will have the right to require that the Company purchase
that Holder's Notes for a cash price (the "Change of Control Purchase Price")
--------------------------------
equal to 101% of the principal amount of the Notes to be purchased, plus accrued
and unpaid interest thereon, if any, to the date of purchase.
(b) Within 30 days following any Change of Control, the Company shall
mail, or caused to be mailed, to the Holders a notice:
(1) describing the transaction or transactions that constitute the
Change of Control;
(2) offering to purchase, pursuant to the procedures required by this
Indenture and described in the notice (a "Change of Control Offer"), on a
------------------------
date specified in the notice (which shall be a Business Day not earlier
than 30 days nor later than 60 days from the date the notice is mailed) and
for the Change of Control Purchase Price, all Notes properly tendered by
such Holder pursuant to such Change of Control Offer; and
(3) describing the procedures that Holders must follow to accept the
Change of Control Offer. The Change of Control Offer is required to remain
open for at least 20 Business Days or for such longer period as is required
by law.
The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the date of purchase.
The Company's obligation to make a Change of Control Offer shall be
satisfied if a third party makes the Change of Control Offer in the manner and
at the times and otherwise in compliance in all material respects with the
requirements applicable to a Change of Control Offer made by the Company and
purchases all Notes properly tendered and not withdrawn under the Change of
Control Offer.
(c) The Company shall comply with applicable tender offer rules,
including the requirements of Rule 14e-1 under the Exchange Act and any other
applicable laws and regulations in connection with the purchase of Notes
pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 4.08
of this Indenture, the Company shall comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
this Section 4.08 by virtue of such compliance.
-54-
Section 4.09. Conduct of Business.
-------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than the Permitted Business.
Section 4.10. Limitations on Additional Indebtedness.
--------------------------------------
(a) The Company shall not, and will not permit any Restricted
Subsidiary to, directly or indirectly, incur any Indebtedness; provided that the
--------
Company, any Guarantor or any Accounts Receivable Entity may incur additional
Indebtedness if, after giving effect thereto, the Consolidated Interest Coverage
Ratio would be at least 2.25 to 1.00 (the "Coverage Ratio Exception").
------------------------
(b) Notwithstanding Section 4.10(a), each of the following shall be
permitted (the "Permitted Indebtedness"):
----------------------
(1) Indebtedness of the Company or any Guarantor under the Credit
Agreement, any synthetic lease financing and/or any Permitted Receivables
Financings, including permitted refinancings thereof pursuant to clause
(11) of this Section 4.10(b) in an aggregate amount at any time outstanding
not to exceed the greater of (x) $175.0 million less the aggregate amount
of Net Available Proceeds applied to repayments of term loans under the
Credit Agreement in accordance with Section 4.15 or (y) 70% of the net book
value of the accounts receivable of the Company and the Restricted
Subsidiaries, including those receivables transferred, sold or assigned
pursuant to a Permitted Receivables Financing;
(2) Indebtedness of the Company, any Restricted Subsidiary or any
Accounts Receivable Entity represented by Permitted Receivables Financings
in an amount not to exceed the greater of (x) $100 million or (y) the net
book value of the receivables of the Company, the Restricted Subsidiaries
or Accounts Receivable Entities sold, transferred or securing such
Indebtedness;
(3) the Notes and the Note Guarantees issued on the Issue Date;
(4) Indebtedness of the Company and the Restricted Subsidiaries to the
extent outstanding on the Issue Date (other than Indebtedness referred to
in clauses (1) and (3) above, and after giving effect to the intended use
of proceeds of the Notes);
(5) Indebtedness under Hedging Obligations; provided that (A) such
--------
Hedging Obligations relate to payment obligations on Indebtedness otherwise
permitted to be incurred by this covenant, and (B) the notional principal
amount of such Hedging
-55-
Obligations at the time incurred does not exceed 105% of the principal
amount of the Indebtedness to which such Hedging Obligations relate;
(6) Indebtedness of the Company owed to a Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary owed to the Company or any other
Restricted Subsidiary; provided, however, that upon any such Restricted
-------- -------
Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being
owed to any Person other than the Company or a Restricted Subsidiary, the
Company or such Restricted Subsidiary, as applicable, shall be deemed to
have incurred Indebtedness not permitted by this clause (6);
(7) Indebtedness in respect of bid, performance or surety bonds issued
for the account of the Company or any Restricted Subsidiary in the ordinary
course of business or any appeal bonds issued for the account of the
Company or any Restricted Subsidiary, including guarantees or obligations
of the Company or any Restricted Subsidiary with respect to letters of
credit supporting such bid, performance or surety obligations (in each case
other than for an obligation for money borrowed), and Indebtedness
evidenced by letters of credit issued in the ordinary course of business of
the Company to secure workers' compensation and other insurance coverage;
(8) Purchase Money Indebtedness incurred by the Company or any
Restricted Subsidiary, and Refinancing Indebtedness thereof, in an
aggregate amount not to exceed at any time outstanding $50.0 million;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
-------- -------
Indebtedness is extinguished within five Business Days of incurrence;
(10) Indebtedness arising in connection with endorsement of
instruments for deposit in the ordinary course of business;
(11) Refinancing Indebtedness with respect to Indebtedness incurred
pursuant to the Coverage Ratio Exception or clause (1) (with respect to
Permitted Receivable Financings and any synthetic lease financing only),
(2), (3) or (4) above or this clause (11);
(12) any guarantee by the Company or any Guarantor of Indebtedness
under any of the foregoing clauses (1) through (11) above or (13) below;0
and
-56-
(13) other Indebtedness of the Company or any Restricted Subsidiary in
an aggregate amount not to exceed $25.0 million at any time outstanding.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (13) above
or is entitled to be incurred pursuant to the Coverage Ratio Exception, the
Company shall, in its sole discretion on the date of its incurrence and from
time to time, classify such item of Indebtedness and may divide and classify
such Indebtedness in more than one of the types of Indebtedness described,
except that Indebtedness incurred under the Credit Agreement on the Issue Date
shall be deemed to have been incurred under clause (1) above.
Section 4.11. Limitations on Restricted Payments.
----------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment if at
the time of such Restricted Payment:
(1) a Default shall have occurred and be continuing or shall occur as
a consequence thereof;
(2) the Company cannot incur $1.00 of additional Indebtedness pursuant
to the Coverage Ratio Exception; or
(3) the amount of such Restricted Payment, when added to the aggregate
amount of all other Restricted Payments made after the Issue Date (other
than Restricted Payments made pursuant to clause (2), (3), (5) or (9) of
Section 4.11(b) below) exceeds the sum (the "Restricted Payments Basket")
--------------------------
of (without duplication):
(A) 50% of Consolidated Net Income for the period (taken as one
accounting period) commencing on the first day of the first full
fiscal quarter commencing after the Issue Date to and including the
last day of the fiscal quarter ended immediately prior to the date of
such calculation for which consolidated financial statements are
available (or, if such Consolidated Net Income shall be a deficit,
minus 100% of such aggregate deficit), plus
----
(B) 100% of the aggregate net cash proceeds received by the
Company either (x) as contributions to the common equity of the
Company after the Issue Date or (y) from the issuance and sale of
Qualified Equity Interests after the Issue Date (including any net
cash proceeds received in connection with any conversion or exchange
of Indebtedness of the Company or any Restricted Subsidiary or
Disqualified Equity Interests of the Company), other than any
-57-
such proceeds which are used to redeem Notes in accordance with
paragraph 8 of the Notes plus
----
(C) the aggregate amount by which Indebtedness (other than
any Subordinated Indebtedness) of the Company or any Restricted
Subsidiary is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Subsidiary of the
Company) subsequent to the Issue Date into Qualified Equity
Interests (less the amount of any cash, or the fair value of
assets, distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange), plus
----
(D) in the case of the disposition or repayment of or return
on any Investment that was treated as a Restricted Payment made
after the Issue Date, an amount (to the extent not included in
the computation of Consolidated Net Income) equal to the lesser
of (i) the return of capital (including dividends, interest and
distributions of a type not included in Consolidated Net Income
of the Company and profits on sale) with respect to such
Investment and (ii) the amount of such Investment that was
treated as a Restricted Payment, in either case, less the cost of
the disposition of such Investment, if any, and net of taxes,
plus
----
(E) upon a Redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the lesser of (i) the Fair Market Value of
the Company's proportionate interest in such Subsidiary
immediately following such Redesignation, and (ii) the aggregate
amount of the Company's Investments (other than Permitted
Investments) in such Subsidiary to the extent such Investments
reduced the amount available for subsequent Restricted Payments
under this clause (3) and were not previously repaid or otherwise
reduced in a manner that increased the Restricted Payment Basket.
(b) The foregoing provisions will not prohibit:
(1) the payment by the Company or any Restricted Subsidiary of
any dividend within 60 days after the date of declaration thereof, if
on the date of declaration the payment would have complied with the
provisions of this Indenture (and such payment shall be deemed to have
been paid on such date of declaration for purposes of any calculation
required in clause (3) Section 4.11(a));
(2) the purchase, redemption or other acquisition or retirement
of any Equity Interests of the Company or any Restricted Subsidiary in
exchange for, or out of the proceeds of the substantially concurrent
issuance and sale of, Qualified Equity Interests;
-58-
(3) the purchase, redemption, repayment, defeasance or other
acquisition of Subordinated Indebtedness of the Company or any
Restricted Subsidiary (a) in exchange for, or out of the proceeds of
the substantially concurrent issuance and sale of, Qualified Equity
Interests or (b) in exchange for, or out of the proceeds of the
substantially concurrent incurrence of, Refinancing Indebtedness
permitted to be incurred under Section 4.10 and the other terms of
this Indenture;
(4) the purchase, redemption or retirement of Equity Interests of
the Company held by officers, directors or employees or former
officers, directors or employees of the Company or any of its
Restricted Subsidiaries (or their transferees, estates or
beneficiaries under their estates), upon or after their death,
disability, retirement, severance or termination of employment or
service; provided that the aggregate cash consideration paid for all
--------
such redemptions shall not exceed $3.0 million during any calendar
year (with unused amounts in any calendar year being usable, without
duplication, in subsequent calendar years);
(5) repurchases, acquisitions or retirements of Equity Interests
deemed to occur upon, or intended to be used to satisfy issuances of
Equity Interests upon, the exercise of stock options or similar rights
issued under employee benefit plans;
(6) acquisitions or retirements of Equity Interests of the
Company with a Fair Market Value at the time of acquisition or
retirement, as the case may be, in the aggregate not to exceed $15.0
million received as consideration with respect to a sale of assets to
any physician practice in connection with the termination of a
Management Services Agreement in effect on the Issue Date;
(7) the redemption or repurchase of common stock of the Company
from holders thereof who beneficially own in the aggregate less than
one percent (1%) of the outstanding common stock (other than officers,
directors or employees of the Company or any of its Restricted
Subsidiaries whose Equity Interests are redeemed or repurchased in
accordance with clause (4) of this Section 4.11(b)) within two years
from the Issue Date so long as the aggregate amount of payments for
all such redemptions or repurchases under this clause (7) does not
exceed $1.0 million;
(8) the purchase, defeasance or other acquisition or retirement
for value of any Subordinated Indebtedness upon a Change of Control of
the Company, to the extent required by any agreement pursuant to which
such Subordinated Indebtedness was issued, but only if the Company has
complied with the provisions described in Section 4.08 and paragraph 8
of the Notes; and
(9) additional Restricted Payments not exceed $35.0 million in
the aggregate;
-59-
provided that (x) in the case of any Restricted Payment pursuant to clause (3),
- --------
(6), (7), (8) or (9) above, no Default shall have occurred and be continuing or
occur as a consequence thereof and (y) no issuance and sale of Qualified Equity
Interests pursuant to clause (2) or (3) above shall increase the Restricted
Payments Basket in clause (3) of Section 4.11(a).
(c) For purposes of determining compliance with the provisions of this
Section 4.11, in the event that any payment or other action meets the criteria
of more than one of the categories of Permitted Investments and/or Restricted
Payments permitted by this Indenture, the Company, in its sole discretion, may
order and classify all or any portion of such Permitted Investments and/or
Restricted Payments on the date of their incurrence in any manner that then
complies with this Indenture and/or from time to time may reorder and reclassify
all or any portion of any item of Permitted Investments and/or Restricted
Payments in any manner that complies with this Indenture at the date of any such
reordering or reclassification and, in each case, the Company shall be entitled,
at its option, to divide and classify or reclassify any item of Permitted
Investments and/or Restricted Payments in more than one of the types of
Permitted Investments and/or Restricted Payments permitted under this Indenture
in any manner that complies with this Indenture at the time of such division and
classification or reclassification.
Section 4.12. Limitation on Dividends and Other Restrictions Affecting
--------------------------------------------------------
Restricted Subsidiaries.
-----------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on or in respect of
its Equity Interests to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to or pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary; or
(3) transfer any of its assets to the Company or any other Restricted
Subsidiary;
(b) The foregoing shall not prohibit:
(1) encumbrances or restrictions existing under or by reason of
applicable law;
(2) encumbrances or restrictions existing under this Indenture, the
Notes and the Note Guarantees;
-60-
(3) non-assignment provisions of any contract, lease or license
entered into in the ordinary course of business or of any Capitalized
Lease Obligation;
(4) encumbrances or restrictions existing under agreements
existing on the date of this Indenture (including, without limitation,
the Credit Agreement) as in effect on that date;
(5) restrictions on the transfer of assets subject to any Lien
permitted under this Indenture imposed by the holder of such Lien
(including those imposed by purchasers in connection with any
Permitted Receivables Financings) or the exercise of or right to
exercise, customary remedies with respect to such assets;
(6) restrictions on the transfer of capital stock or other
assets imposed under any agreement to sell or otherwise dispose of
such assets permitted under this Indenture to any Person pending the
closing of such sale;
(7) any encumbrance or restrictions under any instrument
governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the
Person so acquired;
(8) any other agreement governing Indebtedness entered into
after the Issue Date that contains encumbrances and restrictions that
are not, in the good faith judgment of the Board of Directors,
materially more restrictive with respect to any Restricted Subsidiary
than those in effect on the Issue Date with respect to that Restricted
Subsidiary pursuant to agreements in effect on the Issue Date;
(9) customary provisions in partnership agreements, limited
liability company organizational governance documents, joint venture
agreements and other similar agreements entered into in the course of
healthcare-related businesses that restrict the transfer of ownership
interests in or assets of such partnership, limited liability company,
joint venture or similar Person;
(10) Purchase Money Indebtedness incurred in compliance with
Section 4.10 that imposes restrictions of the nature described in
Section 4.12(a)(3) above on the assets acquired;
(11) any encumbrance or restrictions under any instrument
governing Indebtedness of a Restricted Subsidiary that is a Foreign
Subsidiary, which encumbrance or restriction is not applicable to any
Persons, or the properties or assets of any Persons, other than
Restricted Subsidiaries that are Foreign Subsidiaries;
-61-
(12) any agreement, instrument or Lien placing encumbrances or
restrictions applicable only to an Accounts Receivable Entity; and
(13) any encumbrances or restrictions imposed by any amendments,
extensions, renewals, increases, refinancings, refundings,
replacements or substitutions of the contracts, instruments or
obligations referred to in clauses (1) through (12) of this Section
4.12(b); provided that any such amendment, extension, renewal,
--------
increase, refinancing, refunding, replacement or substitution is, in
the good faith judgment of the Company's Board of Directors, no more
materially restrictive, taken as a whole, with respect to such
encumbrances and restrictions than those prior to such amendment,
extension, renewal, increase, refinancing, refunding, replacement or
substitution.
Section 4.13. Limitations on Liens.
--------------------
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer
to exist any Lien of any nature whatsoever against (other than Permitted Liens)
any assets of the Company or any Guarantor (including Equity Interests of a
Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired,
or any proceeds therefrom, or assign or otherwise convey any right to receive
income or profits therefrom, unless contemporaneously therewith either:
(1) in the case of any Lien securing an obligation that ranks
pari passu with the Notes or a Note Guarantee, effective provision is
---- -----
made to secure the Notes or such Note Guarantee, as the case may be,
at least equally and ratably with or prior to such obligation with a
Lien on the same collateral; and
(2) in the case of any Lien securing an obligation that is
subordinated in right of payment to the Notes or a Note Guarantee,
effective provision is made to secure the Notes or such Note
Guarantee, as the case may be, with a Lien on the same collateral that
is prior to the Lien securing such subordinated obligation,
in each case, for so long as such obligation is secured by such Lien.
Section 4.14. Limitations on Transactions with Affiliates.
-------------------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, in one transaction or a series of related
transactions, sell, lease, transfer or otherwise dispose of any of its assets
to, or purchase any assets from, or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (an "Affiliate Transaction"), unless:
---------------------
-62-
(1) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction at
such time on an arm's-length basis by the Company or such Restricted
Subsidiary from a Person that is not an Affiliate of the Company or
such Restricted Subsidiary; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $10.0 million, an Officers'
Certificate certifying that such Affiliate Transaction complies
with clause (1) above and a Secretary's Certificate which sets
forth and authenticates a resolution that has been adopted by the
Independent Directors approving such Affiliate Transaction; and
(B) with respect to any Affiliate Transaction involving
aggregate consideration of $25.0 million or more, the
certificates described in the preceding clause (A) and a written
opinion as to the fairness of such Affiliate Transaction to the
Company or such Restricted Subsidiary from a financial point of
view issued by an Independent Financial Advisor.
(b) The foregoing restrictions shall not apply to:
(1) transactions exclusively between or among (A) the Company
and one or more Restricted Subsidiaries or (B) Restricted
Subsidiaries; provided, in each case, that no Affiliate of the Company
--------
(other than another Restricted Subsidiary) owns Equity Interests of
any such Restricted Subsidiary;
(2) employment contracts, "know-how" agreements, compensation
(including stay-on and incentive bonus) arrangements and loans to
officers and employees, in each case in the form existing on the Issue
Date or representing one or more amendments, modifications,
restatements, supplements, extensions, renewals, refinancings, refunds
or replacements thereof on terms not materially less favorable to the
Company or Restricted Subsidiary, as applicable, than those contained
in such contracts, agreements, arrangements or loans in the form
existing as of the Issue Date;
(3) indemnities of officers, directors and employees of the
Company or any of its Subsidiaries permitted by its certificate of
incorporation, bylaws or statutory provisions;
(4) other director, officer and employee compensation (including
bonuses) and other benefits (including retirement, health, stock
option and other incentive or
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benefit plans) and indemnification arrangements, in each case approved
by the Independent Directors;
(5) the entering into of a tax sharing agreement, or payments
pursuant thereto, between the Company and/or one or more Subsidiaries,
on the one hand, and any other Person with which the Company or such
Subsidiaries are required or permitted to file a consolidated tax
return or with which the Company or such Subsidiaries are part of a
consolidated group for tax purposes, on the other hand, which payments
by the Company and the Restricted Subsidiaries are not in excess of
the tax liabilities that would have been payable by them on a
stand-alone basis;
(6) loans and advances permitted by clause (3) of the definition
of "Permitted Investments";
(7) Restricted Payments of the type described in clause (1),
(2), (3) or (4) of the definition of "Restricted Payment" and which
are made in accordance with Section 4.11.;
(8) any transaction with an Affiliate where the only
consideration paid by the Company or any Restricted Subsidiary is
Qualified Equity Interests;
(9) any other issuance or sale of Qualified Equity Interests;
(10) transactions in connection with Permitted Receivables
Financings; or
(11) any agreement as disclosed in the Offering Memorandum as in
effect on the Issue Date or any extensions or renewals thereof.
Section 4.15. Limitation on Asset Sales.
-------------------------
(a) The Company shall not, and will not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the assets included in such Asset Sale; provided,
--------
however, that with respect to PPM Asset Sales, the Company receives
-------
consideration at the time of such PPM Asset Sale at least equal to the
lesser of (A) the Fair Market Value of such assets or (B) the net book
value of such assets excluding any write-downs or reductions in net
book value after September 30, 2001 other than as a result of normal
course depreciation and amortization or casualty or destruction; and
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(2) at least 75% of the total consideration received in such
Asset Sale or series of related Asset Sales consists of cash or Cash
Equivalents.
For purposes of clause (a) (2), the following shall be deemed to
be cash:
(A) the amount (without duplication) of any Indebtedness of the
Company or such Restricted Subsidiary that is expressly assumed by the
transferee in such Asset Sale and with respect to which the Company or
such Restricted Subsidiary, as the case may be, is released by the
holder of such Indebtedness,
(B) the amount of any obligations received from such transferee
that is to be paid to the Company or such Restricted Subsidiary in
cash within 30 days,
(C) the Fair Market Value of any assets (other than securities)
received by the Company or any Restricted Subsidiary to be used by it
in the Permitted Business, and
(D) with respect to the sale of assets to any physician practice
in connection with the termination of a Management Services Agreement
as in effect on the Issue Date, (x) the face amount of any
Indebtedness of the Company canceled or retired as consideration to
the Company or a Restricted Subsidiary in any such sale and (y) Equity
Interests of the Company with a Fair Market Value at the time of the
applicable sale not to exceed $15.0 million in the aggregate.
(b) If at any time any non-cash consideration received by the
Company or any Restricted Subsidiary of the Company, as the case may be, in
connection with any Asset Sale is repaid or converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then the date of such repayment, conversion or
disposition shall be deemed to constitute the date of consummation of an Asset
Sale hereunder and the Net Available Proceeds thereof shall be applied in
accordance with this covenant.
(c) If the Company or any Restricted Subsidiary engages in an
Asset Sale, the Company or such Restricted Subsidiary shall be permitted, no
later than 180 days following the consummation thereof, to apply all or any of
the Net Available Proceeds therefrom to:
(1) repay any Senior Debt or Guarantor Senior Debt (without any
permanent reduction in any contract related thereto except as required
in Section 4.10(b)(1)) or Indebtedness of a Restricted Subsidiary that
is a Foreign Subsidiary; and/or
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(2) invest all or any part of the Net Available Proceeds thereof in
the purchase of assets (other than securities) to be used by the Company or
any Restricted Subsidiary in the Permitted Business; and
(3) with respect to the Net Available Proceeds from PPM Asset Sales,
up to $75.0 million prior to February 1, 2005 can be used by the Company or
any Restricted Subsidiary for working capital needs and other general
corporate purposes.
The amount of Net Available Proceeds not applied or invested as
provided in this Section 4.15(c) will constitute "Excess Proceeds."
---------------
(d) When the aggregate amount of Excess Proceeds equals or exceeds
$10.0 million, the Company shall be required to make an offer to purchase from
all Holders and, if applicable, redeem (or make an offer to do so) any Pari
Passu Indebtedness the provisions of which require the Company or a Guarantor to
redeem such Indebtedness with the proceeds from any Asset Sales (or offer to do
so), in an aggregate principal amount of Notes and such Pari Passu Indebtedness
equal to the amount of such Excess Proceeds as follows:
(1) the Company shall (a) make an offer to purchase (a "Net Proceeds
--- --------
Offer") to all Holders in accordance with the procedures set forth in this
-----
Indenture, and (b) purchase, redeem or prepay (or make an offer to do so)
any such other Pari Passu Indebtedness, pro rata in proportion to the
--- ----
respective principal amounts of the Notes and such other Indebtedness
required to be purchased, redeemed or prepaid, the maximum principal amount
of Notes and Pari Passu Indebtedness that may be purchased, redeemed or
prepaid out of the amount (the "Payment Amount") of such Excess Proceeds;
--------------
(2) the offer price for the Notes will be payable in cash in an amount
equal to 100% of the principal amount of the Notes tendered pursuant to a
Net Proceeds Offer, plus accrued and unpaid interest thereon, if any, to
the date such Net Proceeds Offer is consummated (the "Offered Price"), in
-------------
accordance with the procedures set forth in this Indenture and the
redemption price for such Pari Passu Indebtedness (the "Pari Passu
----------
Indebtedness Price") shall be as set forth in the related documentation
------------------
governing such Indebtedness;
(3) if the aggregate Offered Price of Notes validly tendered and not
withdrawn by Holders thereof exceeds the pro rata portion of the Payment
--- ----
Amount allocable to the Notes, Notes to be purchased will be selected on a
pro rata basis or nearly as pro rata as practicable, provided that no Notes
--- ---- --- ---- --------
of a principal amount of $1,000 or less shall be purchased, redeemed or
prepaid in part; and
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(4) upon completion of such Net Proceeds Offer in accordance with the
foregoing provisions, the amount of Excess Proceeds with respect to which
such Net Proceeds Offer was made shall be deemed to be zero.
To the extent that the sum of the aggregate Offered Price of Notes
tendered pursuant to a Net Proceeds Offer and the aggregate Pari Passu
Indebtedness Price paid to the holders of such Pari Passu Indebtedness is less
than the Payment Amount relating thereto (such shortfall constituting a "Net
---
Proceeds Deficiency"), the Company may use the Net Proceeds Deficiency, or a
- -------------------
portion thereof, for general corporate and working capital purposes, subject to
the provisions of this Indenture.
To the extent required thereby, the Company shall comply with
applicable tender offer rules, including the requirements of Rule 14e-1 under
the Exchange Act and any other applicable laws and regulations in connection
with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 4.15 by virtue of this compliance.
Notwithstanding the foregoing, in the event that the Company
consummates an Asset Sale that results in a Change of Control, the provisions of
this covenant will be deemed to be satisfied and complied with in the event the
Company makes a Change of Control Offer pursuant to, and otherwise complying
with, Section 4.08 or at its option under paragraph 8 of the Notes.
Section 4.16. Limitation on Designation of Unrestricted Subsidiaries.
-------------------------------------------------------
(a) After the initial Issue Date the Company may designate any
Subsidiary of the Company as an "Unrestricted Subsidiary" under this Indenture
-----------------------
(a "Designation") only if:
-----------
(1) no Default shall have occurred and be continuing after giving
effect to such Designation; and
(2) the Company would be permitted to make, at the time of such
Designation, (A) an Investment (including a Permitted Investment) or (B) an
Investment pursuant to Section 4.11(a), in either case, in an amount (the
"Designation Amount") equal to the Fair Market Value of the Company's and
------------------
the Restricted Subsidiaries' proportionate interest in such Subsidiary on
such date.
(b) No Subsidiary shall be Designated as an "Unrestricted Subsidiary"
unless such Subsidiary:
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(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary unless the
terms of the agreement, contract, arrangement or understanding are no less
favorable to the Company or the Restricted Subsidiary than those that might
be obtained at the time from Persons who are not Affiliates unless
permitted under the provisions of this Indenture described under Section
4.14; and
(3) is a Person with respect to which neither the Company nor any
Restricted Subsidiary has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
the Person's financial condition or to cause the Person to achieve any
specified levels of operating results.
If, at any time, any Unrestricted Subsidiary fails to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall
be deemed to be incurred by a Restricted Subsidiary as of such date and, if the
Indebtedness is not permitted to be incurred under Section 4.10 or the Lien is
not permitted under Section 4.13, the Company shall be in default of the
applicable covenant.
(c) The Company may redesignate an Unrestricted Subsidiary as a
Restricted Subsidiary (a "Redesignation") only if:
-------------
(1) no Event of Default shall have occurred and be continuing after
giving effect to such Redesignation; and
(2) all Liens, Indebtedness and Investments of such Unrestricted
Subsidiary outstanding immediately following such Redesignation would, if
incurred or made at such time, have been permitted to be incurred or made
for all purposes of this Indenture.
All Designations and Redesignations must be evidenced by resolutions
of the Board of Directors of the Company delivered to the Trustee certifying
compliance with the foregoing provisions.
Section 4.17. Additional Guarantors.
--------------------
If, after the Issue Date, (a) the Company or any Restricted
Subsidiary shall acquire or create another Subsidiary (other than in any case a
Subsidiary (x) that is a Foreign Subsidiary, (y) that has been designated an
Unrestricted Subsidiary or (z) that is an Accounts Receivable Entity) that has
assets and businesses with a Fair Market Value in excess of $1.0
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million or (b) any Unrestricted Subsidiary that is not a Foreign Subsidiary or
an Accounts Receivable Entity is redesignated a Restricted Subsidiary, then, in
each such case, the Company shall cause such Restricted Subsidiary to:
(1) execute and deliver to the Trustee (A) a supplemental indenture in
form and substance satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Notes and this Indenture in accordance with the terms
of the Note Guarantee and (B) a notation of guarantee in respect of its
Note Guarantee; and
(2) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture (A) has been duly authorized, executed and delivered
by such Restricted Subsidiary and (B) constitutes a valid and legally
binding obligation of such Restricted Subsidiary in accordance with its
terms, subject to customary exceptions.
Section 4.18. Limitation on Layering Indebtedness.
-----------------------------------
The Company shall not, and shall not permit any Guarantor to, directly
or indirectly, incur or suffer to exist any Indebtedness that is or purports to
be by its terms (or by the terms of any agreement governing such Indebtedness)
senior to the Notes or the Note Guarantee of such Guarantor, as the case may be,
and subordinated to any other Indebtedness of the Company or of such Guarantor,
as the case may be.
Section 4.19. Limitations on the Issuance or Sale of Equity Interests of
Restricted Subsidiaries.
----------------------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, sell or issue any Equity Interests of any Restricted
Subsidiary that is not a Guarantor or an Accounts Receivable Entity except (1)
to the Company, a Restricted Subsidiary or the minority stockholders of any
Restricted Subsidiary, on a pro rata basis, (2) to the extent such Equity
--- ----
Interests represent directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary, or (3) if after giving effect thereto, such Restricted
Subsidiary no longer qualifies as such and the sale is not otherwise prohibited
by this Indenture. The sale of all the Equity Interests of any Restricted
Subsidiary is permitted by this covenant but is subject to the limitations
described under Section 4.15.
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ARTICLE 5
SUCCESSORS
----------
Section 5.01. Limitation on Mergers, Consolidation, Etc.
-----------------------------------------
(a) The Company shall not, directly or indirectly, in a single
transaction or a series of related transactions, consolidate or merge with or
into (other than a merger with a Wholly Owned Subsidiary solely for the purpose
of changing the Company's state of incorporation of incorporation to another
State of the United States), or sell, lease, transfer, convey or otherwise
dispose of or assign all or substantially all of the assets of the Company and
the Restricted Subsidiaries (taken as a whole) unless, in either case:
(1) (A) either:
(x) the Company shall be the surviving or continuing
Person; or
(y) the Person formed by or surviving such
consolidation or merger or to which such sale, lease,
conveyance or other disposition shall be made (or, in
the case of a Plan of Liquidation, any Person to which
assets are transferred) (collectively, the
"Successor") is a corporation organized and existing
---------
under the laws of any State of the United States of
America or the District of Columbia, and the Successor
expressly assumes, by supplemental indenture in form
and substance satisfactory to the Trustee, all of the
obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement;
(B) immediately prior to and immediately after giving
effect to such transaction and the assumption of the
obligations as set forth in clause (1)(A)(y) above and the
incurrence of any Indebtedness to be incurred by the Company or
the Restricted Subsidiaries in connection therewith, no Default
shall have occurred and be continuing; and
(C) except in the case of the consolidation or merger of
any Restricted Subsidiary with or into the Company, immediately
after and giving effect to such transaction and the assumption of
the obligations set forth in clause (1)(A)(y) above and the
incurrence of any Indebtedness to be incurred in connection
therewith, and the use of any net proceeds therefrom on a pro
forma basis, (x) the Consolidate Net Worth of the
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Company or the Successor, as the case may be, would be at least
equal to the Consolidated Net Worth of the Company immediately
prior to such transaction and (y) the Company or the Successor,
as the case may be, could incur $1.00 of additional Indebtedness
pursuant to the Coverage Ratio Exception; or
(2) in the case of any such consolidation, merger, sale, lease,
transfer, conveyance or other disposition or assignment which will
result in a Change of Control, the Company mails a notice of
redemption prior to or within two Business Days after consummation of
such transaction pursuant to and otherwise in compliance with the
requirements set forth under paragraph 8 of the Notes.
For purposes of this covenant, any Indebtedness of the Successor
which was not Indebtedness of the Company or any Restricted Subsidiary
immediately prior to the transaction shall be deemed to have been incurred at
the time of such transaction.
(b) Except as provided under Section 11.13, no Guarantor may
consolidate with or merge with or into another Person (other than the Company or
another Guarantor), whether or not affiliated with such Guarantor, unless:
(1) either:
(A) such Guarantor will be the surviving or continuing
Person; or
(B) the Person formed by or surviving any such consolidation
or merger assumes, by supplemental indenture in form and
substance satisfactory to the Trustee, all of the obligations of
such Guarantor under the Note Guarantee of such Guarantor, this
Indenture and the Registration Rights Agreement; and
(2) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
provided that this covenant will be deemed to have been complied with in the
- --------
event the Company complies with Section 4.15.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries, the Equity Interests of which constitute all or
substantially all of the properties and assets of the Company, will be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
Upon any consolidation, combination or merger of the Company or a
Guarantor, or any transfer of all or substantially all of the assets of the
Company in accordance with
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the foregoing, in which the Company or such Guarantor is not the continuing
obligor under the Notes or its Note Guarantee, the surviving entity formed by
such consolidation or into which the Company or such Guarantor is merged or to
which the conveyance, lease or transfer is made will succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Guarantor under this Indenture, the Notes and the Note Guarantees, as
applicable, with the same effect as if such surviving entity had been named
therein as the Company or such Guarantor and, except in the case of a
conveyance, transfer or lease, the Company or such Guarantor, as the case may
be, will be released from the obligation to pay the principal of and interest on
the Notes or in respect of its Note Guarantee, as the case may be, and all of
the Company's or such Guarantor's other obligations and covenants under the
Notes, this Indenture and its Note Guarantee, if applicable.
Notwithstanding the foregoing, any Guarantor may merge into the
Company or another Guarantor.
Section 5.02. Successor Substituted.
---------------------
Upon any consolidation, merger, sale, assignment, transfer, lease or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the Successor shall succeed to, and be substituted
for, and may exercise every right and power of, and shall assume every duty and
Obligation of, the Company under this Indenture with the same effect as if such
Successor had been named as the Company herein. When the Successor assumes all
Obligations of the Company hereunder, all Obligations of the predecessor shall
terminate.
ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
Section 6.01. Events of Default.
-----------------
(a) Each of the following is an "Event of Default":
----------------
(1) failure by the Company to pay interest on any of the Notes when
it becomes due and payable and the continuance of any such failure for 30
days (whether or not such payment is prohibited by the subordination
provisions of this Indenture);
(2) failure by the Company to pay the principal on any of the Notes
when it becomes due and payable, whether at stated maturity, upon any
redemption date as to which notice has been given to the Holders in
accordance with the terms of this Inden-
-72-
ture, upon purchase, upon acceleration or otherwise (whether or not such
payment is prohibited by the subordination provisions of this Indenture);
(3) failure by the Company to comply with any of its agreements or
covenants described under Section 5.01, or in respect of its obligations to
make a Change of Control Offer as described above under Section 4.08 or
paragraph 8 of the Notes (whether or not such payment is prohibited by the
subordination provisions of this Indenture) and continuance of this failure
for 30 days;
(4) failure by the Company to comply with any other agreement or
covenant in this Indenture and continuance of this failure for 45 days
after notice of the failure has been given to the Company by the Trustee or
by the Holders of at least 25% of the aggregate principal amount of the
Notes then outstanding;
(5) default under any mortgage, indenture or other instrument or
agreement under which there may be issued or by which there may be secured
or evidenced Indebtedness of the Company or any Restricted Subsidiary,
whether such Indebtedness now exists or is incurred after the Issue Date,
which default:
(A) is caused by a failure to pay when due principal on such
Indebtedness within the applicable express grace period,
(B) results in the acceleration of such Indebtedness prior to its
express final maturity or
(C) results in the commencement of judicial proceedings to
foreclose upon, or to exercise remedies under applicable law or
applicable security documents to take ownership of, the assets
securing such Indebtedness, and
in each case, the principal amount of such Indebtedness, together with any
other Indebtedness with respect to which an event described in clause (A),
(B) or (C) has occurred and is continuing, aggregates $20.0 million or more
and that such default, acceleration or failure to pay is not rescinded,
waived, extended or cured within 30 days after such default, acceleration
or failure to pay;
(6) one or more final judgments or orders that exceed $15.0 million
the aggregate (net of amounts covered by insurance or bonded) for the
payment of money have been entered by a court or courts of competent
jurisdiction against the Company or any Restricted Subsidiary and such
judgment or judgments have not been satisfied, paid, discharged, stayed,
annulled or rescinded within 60 days of being entered (or such longer
period as may be permitted for timely appeal under applicable law);
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(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its assets, or
(D) makes a general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or a Custodian for all or substantially all of the assets
of the Company or any Significant Subsidiary, or
(C) orders the liquidation of the Company or any Significant
Subsidiary, and the order or decree remains unstayed and in effect for
60 days; or
(9) any Note Guarantee of any Significant Subsidiary ceases to be in
full force and effect (other than in accordance with the terms of such Note
Guarantee and this Indenture) or is declared in a final judicial proceeding
null and void and unenforceable or found to be invalid or any Guarantor
denies its liability under its Note Guarantee (other than by reason of
release of a Guarantor from its Note Guarantee in accordance with the terms
of this Indenture and the Note Guarantee).
Section 6.02. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified
in clause 6.01(a)(7) or 6.01(a)(8) above with respect to the Company) shall have
occurred and be continuing under this Indenture, the Trustee, by written notice
to the Company, or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding by written notice to the Company and the Trustee, may
declare all amounts owing under the Notes to be due and payable immediately.
Upon such declaration of acceleration, the aggregate principal of and accrued
and unpaid interest on the outstanding Notes shall immediately become due and
payable; provided, however, that after such acceleration, but before a judgment
-------- -------
or decree based
-74-
on acceleration, the Holders of a majority in aggregate principal amount of such
outstanding Notes may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the nonpayment of accelerated
principal and interest, have been cured or waived as provided in this Indenture.
If an Event of Default specified in clause 6.01(a)(7) or 6.01(a)(8) with respect
to the Company occurs, all outstanding Notes shall become due and payable
without any further action or notice.
The Trustee shall, within 30 days after the occurrence of any Default
with respect to the Notes, give the Holders notice of all uncured Defaults
thereunder known to it; provided, however, that, except in the case of an Event
-------- -------
of Default in payment with respect to the Notes or a Default in complying with
Section 5.01, the Trustee shall be protected in withholding such notice if and
so long as a committee of its trust officers in good faith determines that the
withholding of such notice is in the interest of the Holders.
The Company may cure a Default or Event of Default by designating a
Restricted Subsidiary as an Unrestricted Subsidiary in compliance with Section
4.16, if the circumstances giving rise to such Default or Event of Default would
not have constituted a Default or Event of Default had such Restricted
Subsidiary been an Unrestricted Subsidiary during the relevant period of such
circumstances.
(b) No Holder will have any right to institute any proceeding with
respect to this Indenture or for any remedy thereunder, unless the Trustee:
(1) has failed to act for a period of 60 days after receiving written
notice of a continuing Event of Default by such Holder and a request to act
by Holders of at least 25% in aggregate principal amount of Notes
outstanding;
(2) has been furnished indemnity satisfactory to it in its reasonable
judgment; and
(3) has not received from the Holders of a majority in aggregate
principal amount of the outstanding Notes a direction inconsistent with
such request.
However, such limitations do not apply to a suit instituted by a Holder of any
Note for enforcement of payment of the principal of or interest on such Note on
or after the due date therefor (after giving effect to the grace period
specified in Section 6.01(a)).
Section 6.03. Other Remedies.
--------------
Notwithstanding any other provision of this Indenture, if an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law
-75-
or in equity to collect the payment of principal of or interest on the Notes or
to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative.
Section 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 6.07, 9.02 and 10.02 the Holders of a
majority in principal amount of the Notes then outstanding by notice to the
Trustee may waive an existing Default or Event of Default and its consequences.
When a Default is waived, it is cured and ceases; but no such waiver shall
extend to any other Default.
Section 6.05. Control by Majority.
-------------------
The Holders of a majority in principal amount of the Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the Notes; provided that such directions shall
--------
not be in conflict with any law or this Indenture. Before proceeding to exercise
any right or power under this Indenture at the direction of such Holders, the
Trustee shall be entitled to receive from such Holders reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be Incurred by it in complying with any such direction.
Section 6.06. Limitation on Suits.
-------------------
Except as provided in Section 6.07, a Holder may pursue a
remedy with respect to this Indenture or the Notes only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Notes then outstanding make a written request to the Trustee to
institute proceedings in respect of such Event of Default;
(3) such Holder or Holders furnish to the Trustee reasonable
indemnity, satisfactory to the Trustee, against any loss, liability or
expense to be thereby incurred (including reasonable attorneys' fees);
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(4) the Trustee does not comply with the request within 60
days after receipt of the request and the furnishing of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the Notes then outstanding do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal of and interest in
respect of any such Note on the stated maturity expressed in such Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or adversely affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(a)(l) or
(a)(2) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole amount
of principal and interest remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee, any predecessor Trustee and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property. All rights
of action and claims under this Indenture may be prosecuted and enforced by the
Trustee without the possession of any of the Notes or the production thereof in
any proceeding related thereto. Any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder of
the Notes 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 of the Notes in any such
proceeding.
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Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
-----
SECOND: to Holders for amounts due and unpaid on the Notes for
------
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
THIRD: to the Company.
-----
The Trustee may fix a record date and payment date for any
payment by it to Holders pursuant to this Section.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit other than the Trustee of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 25% in aggregate principal amount of the Notes then outstanding.
ARTICLE 7
TRUSTEE
-------
Section 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
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(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
expressly set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture but need not verify the accuracy of the content
thereof.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense (anticipated or actual which have or may arise), including
reasonable attorneys' fees.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) The Trustee shall not be required to give any bond or
surety with respect to the execution of its rights and powers or with respect to
this Indenture.
(h) The Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions or agreements on
the part of the Company hereunder.
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Section 7.02. Rights of Trustee.
-----------------
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate and/or an Opinion of Counsel in form and
substance reasonably acceptable to the Trustee. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture.
(e) It shall not be the duty of the Trustee, except as
expressly provided herein, to ensure that any duties or Obligations herein
imposed upon the Company or any other Person are performed, and, except as
expressly provided herein, the Trustee shall not be liable or responsible for
the failure of any other Person to perform any act required of it or them by
this Indenture.
(f) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability
whatsoever in the performance of any of its duties hereunder.
Section 7.03. 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 or a
Related Person thereof with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee, however, must
comply with Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes or Note Guarantees; 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 in the Notes other than its certificate of
authentication.
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Section 7.05. Notice of Defaults.
------------------
If a Default occurs and is continuing and if it is actually known to
the Trustee or the Trustee has received written notice thereof, the Trustee
shall mail to each Holder a notice of the Default within 90 days after the
occurrence thereof. Except in the case of a Default in payment of principal of
or interest on any Note, the Trustee may withhold the notice if and so long as
it, in good faith, determines that withholding the notice is in the interests of
Holders.
Section 7.06. Reports by Trustee to Holders.
-----------------------------
If required by TIA Section 313(a), within 60 days after each January 1
beginning with January 1, 2003, the Trustee shall mail to each Holder as
required by TIA Section 313(c) a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b) and (c).
A copy of each report at the time of its mailing to Holders shall be
filed by the Trustee with the SEC and each stock exchange, if any, on which the
Notes are listed. The Company shall notify the Trustee when the Notes are listed
on any stock exchange.
Section 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon in writing between the
Company and the Trustee. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall promptly
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it in connection with administering this Indenture. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee and hold it harmless against
any loss or liability (including the reasonable fees and expenses of counsel)
incurred by it in connection with the administration of this Indenture and the
performance of its duties hereunder. The Company need not pay for any settlement
made without its consent. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnification. The Company need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee's negligence, bad faith or willful misconduct.
To secure the Company's payment Obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(7) or (a)(8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Notes may remove the Trustee by so notifying
the Trustee and the Company and may appoint a successor Trustee with the
Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order of
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the Notes then
outstanding may petition a federal court or any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and
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duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to the Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.07.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligation to compensate the retiring Trustee under
Section 7.07 for services rendered prior to its retirement and the Company's
obligation to indemnify the Trustee under Section 7.07 shall continue for the
benefit of the retiring Trustee and shall survive termination of this Indenture.
Section 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA Section
310(b), provided that there shall be excluded from the operation of TIA Section
--------
310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding and meeting the requirements for exclusion set forth in TIA
Section 310(b)(1).
Section 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE AND DEFEASANCE
------------------------
Section 8.01. Termination of Company's Obligations.
------------------------------------
The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance"). Legal Defeasance means that the Company
----------------
and the Guarantors shall be deemed to have paid and discharged the entire
indebtedness represented by the Notes and the
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Note Guarantees, and this Indenture shall cease to be of further effect as to
all outstanding Notes and Note Guarantees, except as to:
(1) rights of Holders to receive payments in respect of the principal
of and interest on the Notes when such payments are due from the trust
funds referred to below,
(2) the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost
or stolen Notes, and the maintenance of an office or agency for payment and
holding such payments in trust,
(3) the rights, powers, trust, duties, and immunities of the Trustee,
and the Company's obligation in connection therewith, and
(4) the Legal Defeasance provisions of this Indenture.
In addition, the Company may, at its option and at any time, elect to
have its obligations and the obligations of the Guarantors released with respect
to most of the covenants under this Indenture, except as described otherwise in
this Indenture ("Covenant Defeasance"), and thereafter any omission to comply
-------------------
with such obligations shall not constitute a Default. In the event Covenant
Defeasance occurs, certain Events of Default (not including non-payment and,
solely for a period of 91 days following the deposit referred to in clause (1)
of the next paragraph, bankruptcy, receivership, rehabilitation and insolvency
events) will no longer apply. Covenant Defeasance will not be effective until
such bankruptcy, receivership, rehabilitation and insolvency events no longer
apply. The Company may exercise its Legal Defeasance option regardless of
whether it previously exercised Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, United States legal tender, U.S. Government
Obligations or a combination thereof, in such amounts as will be sufficient
(without reinvestment) in the opinion of a nationally recognized firm of
independent public accountants selected by the Company, to pay the
principal of and interest on the Notes on the stated date for payment or on
the applicable redemption date of the principal or installment of principal
of or interest on the Notes, and the Holders must have a valid, perfected,
exclusive security interest in such trust,
(2) 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:
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(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 United States federal income tax law,
in either case to the effect that, and based thereon this Opinion of
Counsel shall confirm that, the Holders will not recognize income, gain or
loss for United States federal income tax purposes as a result of the Legal
Defeasance and will be subject to United States federal income tax on the
same amounts, in the 0same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred,
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that the Holders will not recognize gain or loss for
United States federal income tax purposes as a result of such Covenant
Defeasance and will be subject to United States federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if the Covenant Defeasance had not occurred,
(4) no Event of Default shall have occurred and be continuing on the
date of such deposit (other than a Default resulting from the borrowing of
funds to be applied to such deposit and the grant of any Lien securing such
borrowing),
(5) the Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under 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 Guarantor is bound (other than a
Default resulting from the borrowing of funds to be contemporaneously
applied to such deposit and the grant of any Lien securing such borrowing),
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by it with the intent of
preferring the Holders over any other of its creditors or with the intent
of defeating, hindering, delaying or defrauding any other of its creditors
or others, and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion or Opinions of Counsel, each stating that the
conditions provided for in, in the case of the Officers' Certificate,
clauses (1) through (6) and, in the case of the Opinions of Counsel,
clauses (1) (with respect to the validity and perfection of the security
interest), (2) and/or (3) and (5) of this paragraph have been complied
with.
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If the funds deposited with the Trustee to effect Covenant Defeasance
are insufficient and the Company does not cure such insufficiency to pay the
principal of and interest on the Notes when due, then our obligations and the
obligations of Guarantors under this Indenture will be revived and from and
after such revival no such defeasance will be deemed to have occurred. Before or
after a deposit, the Company may make arrangements satisfactory to the Trustee
for the redemption of Notes at a future date in accordance with the provisions
set forth under paragraph 7 of the Notes.
Section 8.02. Termination of the Obligations By
Satisfaction or Pursuant to Redemption.
--------------------------------------
The Company and each Guarantor may terminate its Obligations under the
Notes, this Indenture and the Note Guarantees (except that the Company's
Obligations under Sections 7.07 and 8.05 hereof shall survive) and the Company
and the Guarantors shall be deemed to have been discharged from their
Obligations with respect to the Notes and the Note Guarantees if:
(a) all the Notes that have been authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and Notes
for whose payment money has been deposited in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer or discharged
from this trust) have been delivered to the Trustee for cancellation, or
(b) (i) all Notes not delivered to the Trustee for cancellation
otherwise have become due and payable or have been called for redemption
pursuant to Paragraph 7 or 8 of the Notes and arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the
name of the Company and the Company has irrevocably deposited or caused to
be deposited with the Trustee trust funds in trust in an amount of money
sufficient to pay and discharge the entire indebtedness (including all
principal and accrued interest to the date of deposit on the Notes not
theretofore delivered to the Trustee for cancellation;
(ii) the Company has paid all sums then due and payable by it under
this Indenture;
(iii) the Company has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of the Notes at
maturity or on the date of redemption, as the case may be;
(iv) the Holders have a valid, perfected, exclusive security interest
in the money so deposited; and
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(v) the Company shall have delivered to the Trustee an Officer's
Certificate stating that the conditions set forth in this Section 8.02 have
been complied with.
Section 8.03. Survival of Company's Obligations.
---------------------------------
Notwithstanding the satisfaction and discharge of this Indenture under
Section 8.01 or Section 8.02, the Company's obligations in Sections 2.05, 2.06,
2.07, 2.08, 7.07, 8.04, 8.05 and 8.06, however, shall survive until the Notes
are no longer outstanding. Thereafter, the Company's obligations in Sections
7.07, 8.05 and 8.06 shall survive.
Section 8.04. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations in accordance with this Indenture
to the payment of principal of and interest on the Notes.
Section 8.05. Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years; 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 a newspaper of general circulation in the City of
New York or mail to each such Holder notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person.
The Company shall and does hereby indemnify Trustee to the fullest
extent permissible by law for the Trustee's failure to comply with any abandoned
property or escheat law by acting in accordance with this Section 8.05.
Section 8.06. Reinstatement.
-------------
If the Trustee is unable to apply any money or U.S. Government
Obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
Obligations under this Indenture and the Notes shall be
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revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01; provided, however, that
-------- -------
if the Company has made any payment of interest on or principal of any Notes
because of 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
money or U.S. Government Obligations held by the Trustee.
ARTICLE 9
SUBORDINATION
-------------
Section 9.01. Agreement To Subordinate.
------------------------
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes and the payment of principal of, and
premium, if any, and interest (including any Additional Interest) thereon are
subordinated in right of payment, to the extent and in the manner provided in
this Article 9, to the prior payment in full in cash or Cash Equivalents of all
Obligations in respect of when due of the principal of, and premium if any, and
accrued and unpaid interest on and all other amounts owing in respect of all
Senior Debt of the Company and that the subordination is for the benefit of the
holders of Senior Debt of the Company, whether outstanding on the Issue Date or
incurred thereafter.
Cash and Cash Equivalents held in trust pursuant to Article 8 are not
subject to the subordination provisions of this Article 9.
Section 9.02. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any payment or distribution to creditors of the Company of the
assets of the Company of any kind or character in a total or partial
liquidation, dissolution or winding up of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company, whether voluntary or involuntary (including any assignment for the
benefit of creditors and proceedings for marshaling of assets and liabilities of
the Company), the holders of all Senior Debt of the Company then outstanding
will be entitled to payment in full in cash or Cash Equivalents of all
Obligations due in respect of Senior Debt before the Holders are entitled to
receive any payment (other than Permitted Junior Securities) on or with respect
to the Notes and, until all holders of Senior Debt receive payment in full in
cash or Cash Equivalents of all Obligations due in respect of Senior Debt, any
distribution to which the Holders would be entitled will be made to holders of
Senior Debt.
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Section 9.03. Company Not To Make Payments with Respect to
Notes in Certain Circumstances.
---------------------------------------------
The Company may not make any payment or distribution of any kind or
character with respect to any Obligations on or relating to the Notes or acquire
any Notes for cash or assets or otherwise (other than, in either case, Permitted
Junior Securities or from any defeasance trust created pursuant to Article 8
hereof) if (i) a payment default on any Senior Debt occurs and is continuing; or
(ii) any other default occurs and is continuing on Designated Senior Debt that
permits holders of the Designated Senior Debt to accelerate its maturity and
each of the Company and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the Representative of any Designated Senior
-----------------------
Debt.
Acquisitions of the Notes may, and payments on and distributions with
respect to any Obligations on or with respect to the Notes may and shall, be
resumed (i) in the case of a payment default on any Senior Debt, upon the date
on which all payment defaults are cured or waived or the Senior Debt is
discharged or paid in full; and (ii) in case of a nonpayment default on any
Designated Senior Debt, the earliest of (1) the date on which all such
nonpayment defaults are cured or waived, (2) 179 days after the date on which
the applicable Payment Blockage Notice is received by the Trustee or (3) the
date on which the Trustee receives notice from the Representative for such
Designated Senior Debt rescinding the Payment Blockage Notice, unless, in each
case, the maturity of any Designated Senior Debt has been accelerated and such
acceleration has not been rescinded or annulled.
No new Payment Blockage Notice may be delivered unless and until 360
days have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 consecutive days. Any
subsequent action or any breach of any financial covenants for a period ending
after the date of delivery of the initial Payment Blockage Notice that in either
case would give rise to a default pursuant to any provisions under which a
default previously existed or was continuing will constitute a new default for
this purpose and will permit a new Payment Blockage Notice.
Notwithstanding anything to the contrary, payments and distributions
made from the trust established pursuant to the provisions of Article 8 will be
permitted and will not be subordinated so long as the payments into the trust
were made in accordance with the requirements of Article 8 and did not violate
the subordination provisions when they were made.
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Regardless of anything to the contrary herein, nothing shall prevent
(a) any payment by the Trustee to the Holders of amounts deposited with it
pursuant to Article 8 or (b) any payment by the Trustee or the Paying Agent as
permitted by Section 9.11 hereof.
Section 9.04. Acceleration of Notes.
---------------------
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Debt of the Company of the
acceleration.
Section 9.05. When Distribution Must Be Paid Over.
-----------------------------------
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company, whether in cash, property or securities,
shall be received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be segregated from other funds or assets and held in trust
for the benefit of the holders of Senior Debt of the Company and shall be paid
or delivered by the Trustee or such Holders, as the case may be, to the holders
of the Senior Debt of the Company 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
of the Company may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Debt of the Company held or
represented by each, for application to the payment of all Senior Debt of the
Company remaining unpaid, to the extent necessary to pay or to provide for the
payment in full in cash of all such Senior Debt after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt.
Notwithstanding the foregoing, Holders may receive and retain payment
from the money or the proceeds held in any defeasance trust described under
Article 8, and no such receipt or retention will be contractually subordinated
in right of payment to any Senior Debt or subject to the restrictions described
in this Article 9.
Section 9.06. Notice by Company.
-----------------
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of
principal of or interest on Notes to violate this Article 9, but failure to give
such notice shall not affect the subordination of the Notes to the Senior Debt
of the Company provided in this Article 9.
In addition, the Company must promptly notify holders of Guarantor
Senior Debt if payment of the Notes is accelerated because of an Event of
Default.
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Section 9.07. Subrogation.
-----------
After all Senior Debt of the Company is paid in full and until
the Notes are paid in full, Holders shall be subrogated to the rights of holders
of Senior Debt of the Company to receive distributions applicable to Senior Debt
of the Company to the extent that distributions otherwise payable to the Holders
have been applied to the payment of Senior Debt of the Company. A distribution
made under this Article 9 to holders of Senior Debt of the Company which
otherwise would have been made to Holders is not, as between the Company and
Holders, a payment by the Company on Senior Debt.
Section 9.08. Relative Rights.
---------------
This Article 9 defines the relative rights of Holders and holders
of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of,
premium, if any, and interest, including any Additional Interest, on
the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than holders of Senior Debt of the Company; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Debt of the Company to receive
distributions otherwise payable to Holders.
Section 9.09. Subordination May Not Be Impaired by the Company.
------------------------------------------------
No right of any holder of Senior Debt of the Company to
enforce the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or by its failure to comply
with this Indenture.
Section 9.10. Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to
holders of Senior Debt of the Company, the distribution may be made and the
notice given to their Representatives.
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Section 9.11. Rights of Trustee and Paying Agent.
----------------------------------
The Trustee or Paying Agent may continue to make payments on the
Notes until they receive written notice of facts that would cause a payment of
principal of or interest on the Notes to violate this Article 9. Only the
Company, a Representative or a holder of an issue of Senior Debt of the Company
that has no Representative may give the notice.
The Trustee shall be entitled to conclusively rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Debt of the Company (or a Representative on behalf of such
holder) to establish that such notice has been given by a holder of Senior Debt
of the Company or a Representative on behalf of any such holder.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of the Company and shall not be liable to any such holder
if it shall mistakenly pay over or distribute to Holders or the Company or any
other Person money or assets to which any holders of Senior Debt of the Company
shall be entitled by virtue of this Article 9 or otherwise.
Section 9.12. Officers' Certificate.
---------------------
If there occurs an event referred to in Section 9.02 or 9.03
hereof, the Company shall promptly give to the Trustee an Officers' Certificate
(on which the Trustee may conclusively rely) identifying all holders of Senior
Debt of the Company or their Representatives and the principal amount of Senior
Debt of the Company then outstanding held by each such holder and stating the
reasons why such Officers' Certificate is being delivered to the Trustee.
Section 9.13. Obligation of Company Unconditional.
-----------------------------------
Nothing contained in this Article 9 or elsewhere in this
Indenture or in any Note is intended to or shall impair, as between the Company,
its creditors other than holders of Senior Debt of the Company and the Holders,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders the principal of, premium, if any, and interest, including any
Additional Interest, 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 other than the
holders of the Senior Debt of the Company, nor shall anything herein or therein
prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article 9 of the holders of Senior Debt of the
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Company in respect of cash, property or securities of the Company received upon
the exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article 9, the Trustee, subject to the provisions of
Sections 7.01 and 7.02 hereof, and the Holders shall be entitled to conclusively
rely upon any order or decree 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 the Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt of the Company and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 9. Nothing
contained in this Article 9 or elsewhere in this Indenture or in any Note is
intended to or shall affect the obligation of the Company to make, or prevent
the Company from making, at any time except during the pendency of any
dissolution, winding up, liquidation or reorganization proceeding, and except
during the continuance of any default specified in Section 9.03 hereof (not
cured or waived), payments at any time of the principal or of interest on the
Notes.
Section 9.14. Article 9 Not To Prevent Events of Default.
------------------------------------------
The failure to make a payment of principal of, premium, if any, or
interest, including any Additional Interest, on the Notes by reason of any
provision of this Article 9 shall not be construed as preventing the occurrence
of an Event of Default under Section 6.01 hereof.
ARTICLE 10
AMENDMENTS, MODIFICATIONS AND WAIVERS
-------------------------------------
Section 10.01. Without Consent of Holders.
--------------------------
The Company and the Trustee may amend, modify or supplement this
Indenture, the Note Guarantees or the Notes without the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
Certificated Notes;
(3) to provide for the assumption of the Company's or any Guarantor's
obligations to the Holders in the case of a merger or acquisition or other
succession;
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(4) to release any Guarantor from any of its obligations under its
Note Guarantee or this Indenture (to the extent permitted by this
Indenture);
(5) to evidence the acceptance of the appointment of a successor
Trustee;
(6) to make any change that does not materially adversely affect the
rights of the Holders or, in the case of this Indenture, to qualify or
maintain the qualification of this Indenture under or otherwise comply with
the TIA.
For the purposes of this Section 10.01, the Trustee may, in its
discretion, determine whether or not the Holder of any Notes would be materially
adversely affected by any amendment or supplement to this Indenture and any such
determination shall be conclusive upon every Holder, whether theretofore or
thereafter entered into. The Trustee shall, subject to the express provisions of
this Indenture, not be liable for any such determination made in good faith and
shall be entitled to, and may rely upon, an Opinion of Counsel with respect
thereto.
Section 10.02. With Consent of Holders.
-----------------------
The Company and the Guarantors, with the consent of the Trustee, may
amend or supplement this Indenture and waive any existing Default or Event of
Default (other than any continuing Default or Event of Default in the payment of
interest on or the principal of the Notes), the Notes or the Note Guarantees
without notice to any Holder but with the written consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(which may include consents obtained in connection with a tender offer or
exchange offer for the Notes). Subject to Section 6.07 and Section 9.02, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may waive compliance by the Company or any
Guarantor with any provision of this Indenture, the Notes or the Note Guarantees
without notice to any Holder. However, without the consent of each Holder
affected, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(1) change the maturity of any Note;
(2) reduce the amount or extend the due date of any scheduled payment
of interest on or principal of the Notes;
(3) reduce any premium payable upon optional redemption of the Notes,
change the date on which any Notes are subject to redemption after notice
of such redemption date has been given to such Holders or otherwise alter
the provisions with respect to the redemption of the Notes in a manner that
adversely affects the Holders in any material respect;
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(4) make any Note payable in money or currency other than that stated
in the Notes;
(5) modify or change any provision of this Indenture or the related
definitions affecting the subordination of the Notes or any Note Guarantee
in a manner that adversely affects the Holders in any material respect; or
(6) reduce the percentage of Holders necessary to consent to an
amendment or waiver to this Indenture or the Notes;
(7) modify or change any provisions of this Indenture or the related
definitions that impairs the rights of Holders to receive payments of
principal of or interest on the Notes;
(8) release any Guarantor that is a Significant Subsidiary from any
of its obligations under its Note Guarantee or this Indenture, except as
permitted by this Indenture; or
(9) make any change in these amendment and waiver provisions.
Promptly after an amendment under this Section 10.02 becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
Section 10.03. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture, the Notes or the Note Guarantees
shall comply with the TIA as then in effect.
Section 10.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder 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 a Note if the Trustee receives the notice of revocation
before the date the amendment, supplement or waiver becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
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After an amendment, supplement or waiver becomes effective
with respect to the Indenture or the Notes, it shall bind every Holder unless it
makes a change described in any of clauses (1) through (9) of Section 10.02. In
that case the amendment, supplement or waiver shall bind each Holder of a Note
who has consented to it and, provided that notice of such amendment, supplement
--------
or waiver is reflected on a Note that evidences the same debt as the consenting
Holder's Note, every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note.
Section 10.05. 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. 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.
Section 10.06. Trustee Protected.
-----------------
The Trustee need not sign any amendment, supplement or waiver
authorized pursuant to this Article that the Trustee shall conclude in its
reasonable judgment adversely affects the Trustee's rights. The Trustee shall be
entitled to receive and rely upon an Opinion of Counsel and an Officer's
Certificate that any supplemental indenture complies with this Indenture.
ARTICLE 11
GUARANTEE OF SECURITIES
-----------------------
Section 11.01. Guarantee.
---------
Subject to the provisions of this Article 11, each Guarantor
(which term includes any successor Person under this Indenture and any
additional Guarantor pursuant to Section 4.17 of this Indenture) for
consideration received hereby jointly, severally, unconditionally and
irrevocably guarantees on a general unsecured basis, ranking (a) senior in right
of payment to all Indebtedness of such Guarantors expressly providing for any
such ranking by its terms or (b) ranking pari passu with such Guarantors'
---- -----
Indebtedness (other than Indebtedness described in the preceding clause (a))
that is not Guarantor Senior Debt (including Indebtedness expressly ranking pari
passu with the Notes by its terms) (each a "Note Guarantee" and, collectively,
--------------
the "Note Guarantees") to each Holder of a Note authenticated and delivered by
---------------
the Trustee and to the Trustee and its successors and assigns, irrespective of
the validity and enforceability of this Indenture, the Notes or the Obligations
of the Company or any other
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Guarantor to the Holders or the Trustee hereunder or thereunder, that: (a) the
principal of, premium, if any, and interest and Additional Interest, if any, on
the Notes will be duly and punctually paid in full when due, whether, without
limitation, at maturity, as a result of redemption, upon a Change of Control, a
Net Proceeds Offer, by acceleration or otherwise, and interest on the overdue
principal, premium, if any, and (to the extent permitted by law) interest, if
any, on the Notes and all other payment Obligations of the Company or the
Guarantors to the Holders or the Trustee hereunder or thereunder (including
fees, expenses or other) will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof and all obligations of the Company
to the Holders or the Trustee all in accordance with the terms of such Note,
this Indenture and the Registration Rights Agreement will be duly and punctually
performed and (b) in case of any extension of time of payment or renewal of any
Notes or any 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, without limitation, at stated maturity, as a result of redemption, upon
a Change of Control, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed for whatever reason, each Guarantor will be obligated
to pay or perform the same immediately. An Event of Default under this Indenture
or the Notes shall constitute an event of default under the Note Guarantees, and
shall entitle the Holders of Notes to accelerate the Obligations of the
Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Company.
Each of the Guarantors hereby agrees that its Obligations
hereunder shall be absolute and unconditional, irrespective of, and shall be
unaffected by, the invalidity, irregularity or unenforceability of the Notes or
this Indenture, the absence of any action to enforce the same, any waiver,
modification or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, any release of any other Guarantor, the recovery
of any judgment against the Company, any action to enforce the same, whether or
not a Note Guarantee is affixed to any particular Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each of the Guarantors hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger, insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Note Guarantee will not be discharged except by complete
performance of the Obligations contained in the Notes, this Indenture and its
Note Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any Custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such Guarantor to the
Trustee or such Holder, its Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor further
agrees that, as between it, on the one hand, and the Holders of Notes and the
Trustee, on the other hand, (a) subject to this Article 11, the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of its Note Guarantee, notwithstanding any stay, injunction or
other prohibition prevent-
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ing such acceleration in respect of the Obligations guaranteed hereby, and (b)
in the event of any declaration of acceleration of such Obligations as provided
in Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purpose of its Note
Guarantee.
The Note Guarantees shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment of the Notes are, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Notes, whether as a "voidable preference,"
"fraudulent transfer" or otherwise, all as though such payment had not been
made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Notes shall, to the fullest extent permitted by law,
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
For purposes of this Article 11, each Guarantor's liability (a
Guarantor's "Base Guaranty Liability") shall be that amount from time to time
-----------------------
equal to the aggregate liability of a Guarantor hereunder, but shall be limited
to the lesser of (A) the aggregate amount of the obligation as stated in the
first sentence of this Section 11.01 with respect to the Notes or (B) the
amount, if any, which would not have (i) rendered such Guarantor "insolvent" (as
such term is defined in Section 101(29) of the Federal Bankruptcy Code and in
Section 271 of the Debtor and Creditor Law of the State of New York, as each is
in effect at the date of this Indenture) or (ii) left it with unreasonably small
capital at the time its Note Guarantee of the Notes was entered into, after
giving effect to the incurrence of existing Indebtedness immediately prior to
such time, provided that it shall be a presumption in any lawsuit or other
--------
proceeding in which a Guarantor is a party that the amount guaranteed is the
amount set forth in clause (A) above unless a creditor, or representative of
creditors of such Guarantor or a trustee in bankruptcy of the Guarantor, as
debtor in possession, otherwise proves in such a lawsuit that the aggregate
liability of the Guarantor is limited to the amount set forth in clause (B). In
making any determination as to the solvency or sufficiency of capital of a
Guarantor in accordance with the previous sentence, the right of such Guarantor
to contribution from other Guarantors, to subrogation pursuant to the next
paragraph and any other rights such Guarantor may have, contractual or
otherwise, shall be taken into account.
Each Guarantor shall be subrogated to all rights of the Holder
of any Notes and the Trustee against the Company or any of the other Guarantors
in respect of any amounts paid to the Holder and the Trustee by such Guarantor
pursuant to the provisions of this Note Guarantee; provided, however, that such
-------- -------
Guarantor shall not be entitled to enforce, or to re-
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ceive any payments arising out of or based upon, such right of subrogation until
the principal of, premium, if any, and interest, including any Additional
Interest, on all the Notes have been paid in full.
Nothing contained in this Article 11 or elsewhere in this
Indenture or in any Note is intended to or shall impair, as between the
Guarantors and the Holders and the Trustee, the obligation of each Guarantor,
which is absolute and unconditional, to pay the Holders and the Trustee the
principal of, premium, if any, and interest, including any Additional Interest,
on the Notes as and when the same shall become due and payable in accordance
with the provisions of the Note Guarantee, 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.
The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right does not impair
the rights of the Holders under the Note Guarantees.
Section 11.02. Agreement To Subordinate.
------------------------
Each Guarantor agrees, and by its acceptance of the Notes each
Holder agrees, that the Indebtedness evidenced by the Note Guarantee of such
Guarantor and the payment thereof are subordinated in right of payment, to the
extent and in the manner provided in this Article, to the prior payment in full
of all Guarantor Senior Debt of such Guarantor and that the subordination is for
the benefit of the holders of Guarantor Senior Debt of such Guarantor.
Cash and Cash Equivalents are held in trust pursuant to
Article 8 are not subject to the subordination provision of this Article 11.
Section 11.03. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any payment or distribution to creditors of any Guarantor
of the assets of such Guarantors of any kind or character in a total or partial
liquidation, dissolution or winding up of such Guarantors or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to such
Guarantors, whether voluntary or involuntary (including any assignment for the
benefit of creditors and proceedings for marshaling of assets and liabilities of
such Guarantors), the holders of Guarantor Senior Debt then outstanding will be
entitled to payment in full in cash or Cash Equivalents of all Obligations due
in respect of Guarantor Senior Debt before the Holders are entitled to receive
any payment (other than Permitted Junior Securities) on or with respect to the
Guarantees and, until all holders of Guarantor Senior Debt receive payment in
full in cash or Cash Equivalents of all Obligations due in respect of Guarantor
Senior Debt, any distribution to which the Holders would be entitled will be
made to holders of Guarantor Senior Debt.
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Section 11.04. Guarantors Not To Make Payments with Respect to
Guarantees in Certain Circumstances.
-----------------------------------------------
No Guarantor shall make any payment or distribution of any
kind or character with respect to any Obligations on or relating to the
Guarantees or acquire any Notes for cash or assets or otherwise (other than, in
either case, Permitted Junior Securities or from any defeasance trust created
pursuant to Article 8 hereof) if (i) a payment default on any Guarantor Senior
Debt occurs and is continuing; or (ii) any other default occurs and is
continuing on Designated Senior Debt that permits holders of the Designated
Senior Debt to accelerate its maturity and each of the Company and the Trustee
receives a notice of such default (a "Payment Blockage Notice") from the
-----------------------
Representative of any Designated Senior Debt.
Acquisitions of the Notes may, and payments on and
distributions with respect to any Obligations on or with respect to the
Guarantees may and shall, be resumed (i) in the case of a payment default on any
Guarantor Senior Debt, upon the date on which all payment defaults are cured or
waived or the Guarantor Senior Debt is discharged or paid in full; and (ii) in
case of a nonpayment default on any Designated Senior Debt of the Guarantor, the
earliest of (1) the date on which all such nonpayment defaults are cured or
waived, (2) 179 days after the date on which the applicable Payment Blockage
Notice is received by the Trustee or (3) the date on which the Trustee receives
notice from the Representative for such Designated Senior Debt of such Guarantor
rescinding the Payment Blockage Notice, unless, in each case, the maturity of
any Designated Senior Debt of such Guarantor has been accelerated and such
acceleration has not been rescinded or annulled.
No new Payment Blockage Notice may be delivered unless and
until 360 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice.
No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 consecutive
days. Any subsequent action or any breach of any financial covenants for a
period ending after the date of delivery of the initial Payment Blockage Notice
that in either case would give rise to a default pursuant to any provisions
under which a default previously existed or was continuing will constitute a new
default for this purpose and will permit a new Payment Blockage Notice.
Notwithstanding anything to the contrary, payments and
distributions made from the trust established pursuant to the provisions of
Article 8 will be permitted and will not be subordinated so long as the payments
into the trust were made in accordance with the requirements of Article 8 and
did not violate the subordination provisions when they were made.
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Regardless of anything to the contrary herein, nothing shall
prevent (a) any payment by the Trustee to the Holders of amounts deposited with
it pursuant to Article 8 or (b) any payment by the Trustee or the Paying Agent
as permitted by Section 9.11 hereof.
Section 11.05. Subrogation.
-----------
After all Guarantor Senior Debt is paid in full and until the
Notes are paid in full, Holders shall be subrogated to the rights of holders of
such Guarantor Senior Debt to receive distributions applicable to such Guarantor
Senior Debt to the extent that distributions otherwise payable to the Holders
have been applied to the payment of such Guarantor Senior Debt. A distribution
made under this Article to holders of Guarantor Senior Debt which otherwise
would have been made to Holders of Notes is not, as between such Guarantor and
Holders, a payment by such Guarantor on Guarantor Senior Debt.
Section 11.06. Subordination May Not Be Impaired by Guarantors.
-----------------------------------------------
No right of any holder of Guarantor Senior Debt to enforce the
subordination of the indebtedness evidenced by the Notes and the Note Guarantees
shall be impaired by any act or failure to act by any Guarantor or by its
failure to comply with this Indenture.
Section 11.07. Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to
holders of Guarantor Senior Debt, the distribution may be made and the notice
given to their Representatives.
Section 11.08. Rights of Trustee and Paying Agent.
----------------------------------
The Trustee or Paying Agent may continue to make payments on
the Notes and the related Note Guarantees until it receives written notice of
facts that would cause a payment of principal of or interest on the Notes and
the Note Guarantees to violate this Article. Only the Company, a Guarantor, a
Representative or a holder of an issue of Guarantor Senior Debt that has no
Representative may give the notice.
The Trustee shall be entitled to conclusively rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Guarantor Senior Debt (or a Representative on behalf of such holder)
to establish that such notice has been given by a holder of Guarantor Senior
Debt or a Representative on behalf of any such holder. In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person who is a holder of Guarantor Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Guarantor Senior Debt held by such Person, the
extent to which such Person is entitled to participate in such payment or
dis-
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tribution and any other facts pertinent to the rights of such Person under this
Article, and if such evidence is not furnished the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment or until such time as the Trustee shall be otherwise
satisfied as to the right of such Person to receive such payment.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Debt with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Guarantor Senior Debt and shall not be liable to any such holder
if it shall mistakenly pay over or distribute to Holders, or any Guarantor or
any other Person money or assets to which any holders of Guarantor Senior Debt
shall be entitled by virtue of this Article or otherwise.
Section 11.09. Officers' Certificate.
---------------------
If there occurs an event referred to in Section 11.03 or
11.04, such Guarantor, as applicable, shall promptly give to the Trustee an
Officers' Certificate (on which the Trustee may conclusively rely) identifying
all holders of Guarantor Senior Debt or their Representatives and the principal
amount of Guarantor Senior Debt then outstanding held by each such holder and
stating the reasons why such Officers' Certificate is being delivered to the
Trustee.
Section 11.10. Obligation of Guarantors Unconditional.
--------------------------------------
Nothing contained in this Article 11 or elsewhere in this
Indenture, in any Note or in any Note Guarantee is intended to or shall impair,
as between the Guarantors, their respective creditors other than holders of
Guarantor Senior Debt and the Holders of the Notes, the obligation of the
Guarantors, which is absolute and unconditional, to pay to the Holders of the
Notes the principal of and interest on the Notes as and when the same shall
become due and payable in accordance with the terms of the Note Guarantees, or
is intended to or shall affect the relative rights of the Holders of the Note
and creditors of the Guarantors other than the holders of the Guarantor Senior
Debt, nor shall anything herein or therein prevent the Trustee or the Holder of
any Note from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture, subject to the rights, if any, under this Article
11 of the holders of Guarantor Senior Debt in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy. Upon
any distribution of assets of any Guarantor referred to in this Article 11, the
Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders of
the Notes shall be entitled to conclusively rely upon any order or decree 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 the Holders of the Notes, for
-102-
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Guarantor Senior Debt and other indebtedness of
the Guarantors, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 11. Nothing contained in this Article 11 or elsewhere in this Indenture,
in any Note or in any Note Guarantee is intended to or shall affect the
obligation of the Guarantors to make, or prevent the Guarantors from making, at
any time except during the pendency of any dissolution, winding up, liquidation
or reorganization proceeding, and except during the continuance of any default
specified in Section 9.04 (not cured or waived), payments at any time of the
principal or of interest on the Notes.
Section 11.11. Article 11 Not To Prevent Events of Default.
-------------------------------------------
The failure to make a payment of principal of or interest on
the Notes by reason of any provision of this Article shall not be construed as
preventing the occurrence of an Event of Default under Section 6.01.
Section 11.12. Execution and Delivery of Guarantee.
-----------------------------------
To further evidence the Note Guarantee set forth in Section
11.01, each Guarantor hereby agrees that a notation of such Note Guarantee,
substantially in the form included in Exhibit B hereto, shall be endorsed on
---------
each Note authenticated and delivered by the Trustee after such Note Guarantee
is executed and executed by either manual or facsimile signature of an officer
of each Guarantor. The validity and enforceability of any Note Guarantee shall
not be affected by the fact that it is not affixed to any particular Note.
Each of the Guarantors hereby agrees that its Note Guarantee
set forth in Section 11.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.
If an officer of a Guarantor whose signatures is on this
Indenture or a Note no longer holds that office at the time the Trustee
authenticates such Note or at any time thereafter, such Guarantor's Note
Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Note
Guarantee set forth in this Indenture on behalf of the Guarantor.
Section 11.13. Release of a Guarantor.
----------------------
(a) Upon the sale or disposition of all of the assets or all
of the Equity Interests of any Guarantor by the Company or a Subsidiary of the
Company, or upon the consolidation or merger of a Guarantor with or into any
Person (in each case, other than to the Company or a
-103-
Related Person of the Company) in compliance with Section 5.01, or upon the
designation of a Subsidiary as an Unrestricted Subsidiary, such Guarantor, or
the entity surviving such Guarantor, as applicable, shall be deemed
automatically and unconditionally released and discharged from all Obligations
under this Article 11 and its Note Guarantee without any further action required
on the part of the Trustee or any Holder, and all Obligations of such Guarantor,
if any, in respect of any Indebtedness of the Company shall also terminate upon
such transaction; provided, however, that each such Guarantor is sold or
-------- -------
disposed of in accordance with Section 4.15 and Section 5.01 hereof,
respectively, or as otherwise permitted herein; provided, further, that the
-------- -------
foregoing proviso shall not apply to the sale or disposition of a Guarantor in a
foreclosure to the extent that such proviso would be inconsistent with the
requirements of the Uniform Commercial Code.
(b) The Trustee shall deliver an appropriate instrument
evidencing the release of a Guarantor upon receipt of a request of the Company
accompanied by an Officer's Certificate certifying as to the compliance with
this Section 11.13. Any Guarantor not so released or the entity surviving such
Guarantor, as applicable, will remain or be liable under its Note Guarantee as
provided in this Article 11.
The Trustee shall execute any documents reasonably requested
by the Company or a Guarantor in order to evidence the release of such Guarantor
from its Obligations under its Note Guarantee endorsed on the Notes and under
this Article 11.
Except as set forth in Articles 4 and 5 and this Section
11.13, nothing contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
ARTICLE 12
MISCELLANEOUS
-------------
Section 12.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
-104-
Section 12.02. Notices.
-------
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person, mailed by
first-class mail or by express delivery to the other's address stated in this
Section 12.02. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by
first-class mail to his address shown on the Register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is:
US Oncology
16825 Northchase Drive
Houston, TX 77060
Attention: Corporate Secretary
The Trustee's address is:
JP Morgan Chase Bank
600 Travis Street, Suite 1150
Houston, Texas 77002
Section 12.03. Communication by Holders with Other Holders.
-------------------------------------------
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
-105-
Section 12.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signer, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) to the extent expressly required by this Indenture or as
otherwise may be reasonably requested by the Trustee, an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent
have been complied with.
Each signer of an Officer's Certificate or an Opinion of Counsel may (if so
stated) rely, effectively, upon an Opinion of Counsel as to legal matters and an
Officer's Certificate as to factual matters if such signer reasonably and in
good faith believes in the accuracy of the document relied upon.
Section 12.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 12.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for their respective functions.
-106-
Section 12.07. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
-------------
institutions are not required to be open in The City of New York, in the State
of New York, or in the city in which the Trustee administers its corporate trust
business in respect of this Indenture or the city in which the Company has its
chief executive office. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on that payment for the
intervening period.
Section 12.08. No Personal Liability of Directors, Officers, Employees,
-------------------------------------------------------
and Stockholders
----------------
No director, officer, employee, incorporator or stockholder or
Affiliates, past, present and future of the Company or any Guarantor will have
any liability under the Notes or this Indenture or for any obligations of the
Company under the Notes or this Indenture or of any Guarantor under its Note
Guarantee or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Note Guarantees.
Section 12.09. Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
Section 12.10. Governing Law.
-------------
This Indenture, the Notes and the Note Guarantees will be governed by,
and construed in accordance with, the laws of the State of New York.
Section 12.11. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.12. Successors.
----------
All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind their respective successors. All agreements of the Trustee
in this Indenture shall bind its successors.
-107-
Section 12.13. Separability.
------------
In case any provision in this Indenture or in the Notes or in
the Note Guarantees shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and a Holder shall have no claim therefor against
any party hereto.
Section 12.14. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes or Note Guarantees,
expressed or implied, shall give to any Person, other than the parties hereto
and their successors hereunder and the Holders of Notes, any benefits or any
legal or equitable right, remedy or claim under this Indenture.
Section 12.15. Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SIGNATURES
----------
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
US ONCOLOGY, INC.,
as the Company
By: ___________________________________
Name:
Title:
EACH OF THE CORPORATE GUARANTORS
LISTED ON SCHEDULE I ATTACHED
----------
HERETO
By: ___________________________________
Name:
Title:
EACH OF THE OTHER GUARANTORS
LISTED ON SCHEDULE I ATTACHED
----------
HERETO
By: Its respective Managing Member or
Sole Manager, as the case may be
By: ___________________________________
Name:
Title:
JP MORGAN CHASE BANK, as Trustee,
By: ___________________________________
Name:
Title:
Schedule I
----------
Schedule of Guarantors
----------------------
AOR Holding Company of Indiana, Inc.
AOR Management Company of Alabama, Inc.
AOR Management Company of Arizona, Inc.
AOR Management Company of Central Florida, Inc.
AOR Management Company of Florida, Inc.
AOR Management Company of Indiana, Inc.
AOR Management Company of Missouri, Inc.
AOR Management Company of Nevada, Inc.
AOR Management Company of New York, Inc.
AOR Management Company of North Carolina, Inc.
AOR Management Company of Ohio, Inc.
AOR Management Company of Oklahoma, Inc.
AOR Management Company of Oregon, Inc.
AOR Management Company of Pennsylvania, Inc.
AOR Management Company of South Carolina, Inc.
AOR Management Company of Texas, Inc.
AOR Management Company of Virginia, Inc.
AOR of Indiana Management Partnership
AOR of Texas Management Limited Partnership
AOR Real Estate, Inc.
AOR Synthetic Real Estate, Inc.
AORIP, Inc.
AORT Holding Company, Inc.
Greenville Radiation Care, Inc.
Physician Reliance Holdings, LLC
Physician Reliance Network, Inc.
Physician Reliance, L.P.
PRN Physician Reliance, LLC
RMCC Cancer Center, Inc.
TOPS Pharmacy Services, Inc.
US Oncology Corporate, Inc.
US Oncology Research, Inc.
EXHIBIT A
---------
SPECIMEN
--------
US ONCOLOGY, INC.
----------------
$_________
CUSIP NO.: _________
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES ACT"), AND
THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF
THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF US ONCOLOGY, INC.
(THE "COMPANY") THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (i) (a)TO A PERSON WHO THE SELLER REASONABLY BELIVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT IN THE
CASE OF A TRANSFER PURSUANT TO CLAUSE (d) SUCH TRANSFER IS SUBJECT TO
THE RECEIPT BY THE REGISTRAR (AND THE COMPANY, IF IT SO REQUESTS) OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (ii) TO
THE COMPANY
A-1
OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND THE INDENTURE GOVERNING THE NOTES AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
A-2
REGISTERED REGISTERED
NUMBER DOLLARS
[Face of Note]
------------
US ONCOLOGY, INC.
----------------
CUSIP
-----
9 5/8% SENIOR SUBORDINATED NOTE DUE 2012
US ONCOLOGY, INC., a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to CEDE & CO., or
-------
registered assigns, the principal sum of ONE HUNDRED SEVENTY-FIVE MILLION
DOLLARS ($175,000,000) on February 1, 2012, and to pay interest thereon as
provided on the reverse hereof, until the principal hereof is paid or duly
provided for.
Interest Payment Dates: February 1 and August 1 commencing on August 1,
2002
Record Dates: January 15 and July 15
The provisions on the back of this certificate are incorporated as if
set forth on the face hereof.
A-3
IN WITNESS WHEREOF, US ONCOLOGY, INC. has caused this instrument to be
duly signed.
US ONCOLOGY, INC.
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred
to in the within mentioned Indenture.
JP MORGAN CHASE BANK,
as Trustee
By: __________________________________
Name:
Title: Authorized Signatory
Dated: February 1, 2002
A-4
[REVERSE OF NOTE]
---------------
US ONCOLOGY, INC.
9 5/8% SENIOR SUBORDINATED NOTE DUE 2012
1. INTEREST. US Oncology, Inc., a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
-------
rate per annum shown above. The Company shall pay interest semi-annually on
February 1 and August 1 of each year, commencing August 1, 2002. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of original issuance of the Notes
set forth on the face of this Note. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. STATED MATURITY. The date on which the principal of the
---------------
Notes shall be payable, unless accelerated pursuant to the Indenture, is
February 1, 2012.
3. METHOD OF PAYMENT. If a Holder holding not less than one
-----------------
million dollars ($1,000,000) of Notes has given wire transfer instructions to
the Issuer at least ten Business Days prior to the applicable payment date, the
Issuer will make all payments on such Holder's Notes in accordance with those
instructions. Otherwise, payments on the Notes will be made at the office or
agency of the paying agent (the "Paying Agent") and registrar (the "Registrar")
for the Notes within the City and State of New York unless, with respect to any
such other Holders, the Issuer elects to make interest payments by check mailed
to the Holders at their addresses set forth in the register of Holders.
4. PAYING AGENT AND REGISTRAR. Initially, JP Morgan Chase
--------------------------
Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may
-------
change any Paying Agent, Registrar or co-Registrar without notice. The Company
may act in any such capacity.
5. INDENTURE AND GUARANTEES. The Company issued the Notes
------------------------
under an Indenture dated as of February 1, 2002 (the "Indenture") between the
---------
Company and the Trustee. The terms of the Notes are more fully 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 Sections 77aaa-77bbbb), as in
effect on the date of the Indenture (the "TIA"). The Notes are subject to all
---
such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. The Notes are general unsecured senior subordinated
obligations of the Company unlimited in aggregate principal amount, of which
$175.0 million will be issued in the Offering, and unlimited additional amounts
may be issued after the Issue Date (except for Notes issued in substitution for
destroyed, mutilated, lost or stolen Notes). Terms used herein which are defined
in the Indenture have the meanings assigned to them in the Indenture.
A-5
Payment on the Notes is guaranteed (each, a "Note Guarantee"), on a
--------------
senior subordinated basis, jointly and severally, by each of the Guarantors
pursuant to Article 11 of the Indenture. In addition, the Indenture requires the
Company to cause any Subsidiary which is designated as a Restricted Subsidiary
to be made a Guarantor, and provides that, at the Company's discretion, any
Unrestricted Subsidiary may be made a Guarantor.
6. SUBORDINATION. The Notes are unsecured obligations of the Company
-------------
and subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full of all Senior Debt of the
Company, whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by his acceptance hereof agrees to
be bound by such provisions and authorizes and expressly directs the Trustee, on
his behalf, to take such action as may be necessary or appropriate to effectuate
the subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
7. OPTIONAL REDEMPTION. (a) Except as set forth below, the Notes
-------------------
will not be redeemable at the option of the Company prior to February 1, 2007.
Thereafter, the Notes will be redeemable, at the Company's option, in whole or
in part, at any time or from time to time, upon not less than 30 nor more than
60 days prior notice mailed by first-class mail to each Holder's registered
address, at the following redemption prices (expressed in percentages of
principal amount), plus accrued and unpaid interest and Additional Interest, if
any, to the applicable redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
February 1 of the years set forth below:
REDEMPTION
YEAR PRICE
---- ------------
2007 ................................................ 104.813%
2008 ................................................ 103.208%
2009 ................................................ 101.604%
2010 and thereafter ................................. 100.000%
(b) In the event that less than all of the Notes are to be redeemed
at any time pursuant to an optional redemption, selection of the Notes for
redemption will be made by the Trustee 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 then listed on a national security exchange, on
a pro rata basis, by lot or by such method as the Trustee shall deem fair and
--- ----
appropriate; provided, however, that no Notes of a principal amount of $1,000 or
-------- -------
less shall be redeemed in part. In addition, if a partial redemption is made
pursuant to this paragraph 7 of this Note selection of the Notes or portions
thereof for redemption shall be made by the Trustee only on a pro rata basis or
--- ----
on as nearly a pro rata basis as is practicable (subject to the procedures of
--- ----
The Depository Trust Company), unless that method is otherwise prohibited.
A-6
(c) At any time on or prior to February 1, 2005, the Company may
redeem in the aggregate up to 35% of the aggregate principal amount of the Notes
issued under the Indenture with the net cash proceeds of one or more Qualified
Equity Offerings at a redemption price equal to 109.625% of the principal amount
of the Notes to be redeemed, plus accrued and unpaid interest thereon, if any,
to the date of redemption; provided that (1) at least 65% of the aggregate
principal amount of Notes issued under the Indenture remains outstanding
immediately after the occurrence of any such redemption and (2) the applicable
redemption occurs within 90 days of the initial receipt of the proceeds in
immediately available funds of any such Qualified Equity Offering.
8. OPTIONAL REDEMPTION UPON A CHANGE OF CONTROL. In the event of a
--------------------------------------------
Change of Control, any time on or prior to February 1, 2007, the Notes may be
redeemed, in whole but not in part, at the option of the Company notice of which
is sent no later than 30 days after the occurrence of such Change of Control by
notice mailed by first-class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the date
of redemption (the "Change of Control Redemption Date").
---------------------------------
"Applicable Premium" means, with respect to a Note at any Change of
------------------
Control Redemption Date, the greater of:
(1) 1.0% of the principal amount of such Note; or
(2) the excess of
(a) the present value at such time of:
(x) the redemption price of such Note at February 1, 2007 (such
redemption price being described in paragraph 7 above) plus
(y) all required interest payments (excluding accrued but unpaid
interest) due on such Note through February 1, 2007,
computed using a discount rate equal to the Treasury Rate plus 25
basis points, over
(b) the principal amount of such Note.
"Treasury Rate" means the yield to maturity at the Change of Control
-------------
Redemption Date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) which has become publicly available at least two Business Days
prior to the Change of Control Redemption Date (or, if such Statistical Release
is no longer published, any publicly available source of similar market data))
most nearly equal to the period from the Change of Control Redemption Date to
February 1, 2007, provided, however, that if the period from the Change of
-------- -------
Control Redemp-
A-7
tion Date to February 1, 2007 is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the Treasury
Rate shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the period from the
Change of Control Redemption Date to February 1, 2007 is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
9. REGISTRATION RIGHTS. Pursuant to the Registration Rights
-------------------
Agreement by and between the Company and the Initial Purchasers, the Company
shall be obligated to consummate an exchange offer pursuant to which the Holder
of this Note shall have the right to exchange this Note for the Company's 9 5/8%
Senior Subordinated Notes due 2012 (the "Exchange Notes"), at such time as the
--------------
Exchange Notes shall have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects to the
Notes with the security legend removed. The Holders of the Notes shall be
entitled to receive certain Additional Interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
10. RESTRICTIVE COVENANTS. The Indenture contains certain restrictive
---------------------
covenants that limit the ability of the Company and its Restricted Subsidiaries
to incur additional Indebtedness, pay dividends, make certain other
distributions, repurchase Equity Interests or subordinated Indebtedness, create
certain Liens, enter into certain transactions with Related Persons or apply the
Net Proceeds from the sale of certain assets.
11. 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 may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents. No service
charge shall be made for any such registration or transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Registrar need not
exchange or register the transfer of any Note selected for redemption in whole
or in part. Also, it need not exchange or register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed.
12. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
---------------------
treated as its owner for all purposes.
13. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
----------------------
Indenture, the Notes or the Note Guarantees may be amended as provided in the
Section 10.01 and 10.02 of the Indenture.
A-8
14. DEFAULTS AND REMEDIES. Each of the following is an Event of
---------------------
Default: (a) failure by the Company to pay interest on any of the Notes when it
becomes due and payable and the continuance of any such failure for 30 days
(whether or not such payment is prohibited by Article 9 of the Indenture); (ii)
failure by the Company to pay the principal on any of the Notes when it becomes
due and payable, whether at stated maturity, upon any redemption date as to
which notice has been given to the Holders in accordance with the terms of the
Indenture, upon purchase, upon acceleration or otherwise (whether or not such
payment is prohibited by the subordination provisions of the Indenture); (iii)
failure by the Company to comply with any of its agreements or covenants under
Section 5.01 of the Indenture or in respect of its obligations to make a Change
of Control Offer as described in Section 4.08 paragraph 8 of this Note (whether
or not such payment is prohibited by Article 9 of the Indenture) and continuance
of this failure for 30 days; (iv) failure by the Company to comply with any
other agreement or covenant in the Indenture and continuance of this failure for
45 days after notice of the failure has been given to the Company by the Trustee
or by the Holders of at least 25% of the aggregate principal amount of the Notes
then outstanding; (v) default under any mortgage, indenture or other instrument
or agreement under which there may be issued or by which there may be secured or
evidenced Indebtedness of the Company or any Restricted Subsidiary, whether such
Indebtedness now exists or is incurred after the Issue Date, which default: (a)
is caused by a failure to pay when due principal on such Indebtedness within the
applicable express grace period, (b) results in the acceleration of such
Indebtedness prior to its express final maturity or (c) results in the
commencement of judicial proceedings to foreclose upon, or to exercise remedies
under applicable law or applicable security documents to take ownership of, the
assets securing such Indebtedness, and in each case, the principal amount of
such Indebtedness, together with any other Indebtedness with respect to which an
event described in clause (a), (b) or (c) has occurred and is continuing,
aggregates $20.0 million or more and that such default, acceleration or failure
to pay is not rescinded, waived, extended or cured within 30 days after such
default, acceleration or failure to pay; (vi) one or more final judgments or
orders that exceed $15.0 million the aggregate (net of amounts covered by
insurance or bonded) for the payment of money have been entered by a court or
courts of competent jurisdiction against the Company or any Restricted
Subsidiary and such judgment or judgments have not been satisfied, paid,
discharged, stayed, annulled or rescinded within 60 days of being entered (or
such longer period as may be permitted for timely appeal under applicable law);
(vii) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to
the entry of an order for relief against it in an involuntary case, (c) consents
to the appointment of a Custodian of it or for all or substantially all of its
assets, or (d) makes a general assignment for the benefit of its creditors;
(viii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (a) is for relief against the Company or any Significant
Subsidiary as debtor in an involuntary case, (b) appoints a Custodian of the
Company or any Significant Subsidiary or a Custodian for all or substantially
all of the assets of the Company or any Significant Subsidiary, or (c) orders
the liquidation of the Company or any Significant Subsidiary, and the order or
decree remains unstayed and in effect for 60 days; or (ix) any Note Guarantee of
any Significant Subsidiary ceases to be in full force and effect (other than in
accor-
A-9
dance with the terms of such Note Guarantee and the Indenture) or is declared in
a final judicial proceeding null and void and unenforceable or found to be
invalid or any Guarantor denies its liability under its Note Guarantee (other
than by reason of release of a Guarantor from its Note Guarantee in accordance
with the terms of the Indenture and the Note Guarantee).
If an Event of Default (other than an Event of Default specified in
clause (vii) or (viii) above with respect to the Company), shall have occurred
and be continuing under the Indenture, the Trustee, by written notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding by written notice to the Company and the Trustee, may
declare all amounts owing under the Notes to be due and payable immediately.
Upon such declaration of acceleration, the aggregate principal of and accrued
and unpaid interest on the outstanding Notes shall immediately become due and
payable; provided, however, that after such acceleration, but before a Judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of such outstanding Notes may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
nonpayment of accelerated principal and interest, have been cured or waived as
provided in the Indenture. If an Event of Default specified in clause (vii) or
(viii) with respect to the Company occurs, all outstanding Notes shall become
due and payable without any further action or notice. The Trustee shall, within
30 days after the occurrence of any Default with respect to the Notes, give the
Holders notice of all uncured Defaults thereunder known to it; provided,
however, that, except in the case of an Event of Default in payment with respect
to the Notes or a Default in complying with Section 5.01 of the Indenture the
Trustee shall be protected in withholding such notice if and so long as a
committee of its trust officers in good faith determines that the withholding of
such notice is in the interest of the Holders. The Company may cure a Default or
Event of Default by designating a Restricted Subsidiary as an Unrestricted
Subsidiary in compliance with Section 4.16 of the Indenture if the circumstances
giving rise to such Default or Event of Default would not have constituted a
Default or Event of Default had such Restricted Subsidiary been an Unrestricted
Subsidiary during the relevant period of such circumstances. No Holder will have
any right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless the Trustee: (1) has failed to act for a period of 60
days after receiving written notice of a continuing Event of Default by such
Holder and a request to act by Holders of at least 25% in aggregate principal
amount of Notes outstanding; (2) has been offered indemnity satisfactory to it
in its reasonable judgment; and (3) has not received from the Holders of a
majority in aggregate principal amount of the outstanding Notes a direction
inconsistent with such request. However, such limitations do not apply to a suit
instituted by a Holder of any Note for enforcement of payment of the principal
of or interest on such Note on or after the due date therefor (after giving
effect to the grace period specified in clause Section 6.01(a) of the Indenture
with respect to the payment of interest). The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officer's Certificate stating whether or not the signatories know of any Default
by the Company in performing any of its obligations under the Indenture and the
Notes. If the Company has knowledge of any such Default, the certificate shall
describe the Default and its status. In the event that any Default under Section
6.01 of the Indenture shall
A-10
occur, the Company shall give prompt written notice of such Default to the
Trustee specifying such Default and what action the Company is taking or
proposes to take with respect thereto.
15. TRUSTEE DEALINGS WITH COMPANY. JP Morgan Chase Bank, the Trustee
-----------------------------
under the Indenture, or any banking institution serving as successor Trustee
thereunder, in its individual or any other capacity, may accept deposits from,
and perform services for the Company or its Related Persons, and may otherwise
deal with the Company or its Related Persons, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, controlling
--------------------------
Person, employee or stockholder, as such, of the Company or any Guarantor or any
successor Person thereof shall not have any liability for any Obligations,
covenants or agreements of the Company or any Guarantor under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
Obligations, covenants or agreements or their creation. Each Holder by accepting
a Note waives and releases all such liability. The waiver and releases are part
of the consideration for the issue of the Notes.
17. AUTHENTICATION. This Note shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of
-------------
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenant 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).
THE COMPANY SHALL FURNISH TO ANY NOTEHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: US Oncology,
Inc., 16825 Northchase Drive, Suite 1300, Houston, Texas 77060, telephone: (832)
601-8766.
A-11
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 ___________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date: ____________ Signature(s): ___________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Note)
Signature(s) guaranteed by: _________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (Banks,
Stock Brokers, Savings and Loan
Associations, and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17Ad-15.)
A-12
OPTION OF HOLDER TO ELECT PURCHASE
----------------------------------
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.08or 4.15, as the case may be, of the Indenture, check the
box: [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.08 or 4.15 of the Indenture, state the amount:
$__________ (in an integral multiple of $1,000)
Date: ____________ Signature(s): ___________________________
Date: ____________ Signature(s): ___________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Note)
Signature(s) guaranteed by: _________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (Banks,
Stock Brokers, Savings and Loan
Associations, and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17Ad-15.)
A-13
EXHIBIT B
---------
[FORM OF GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
For value received, the undersigned hereby unconditionally guarantees
on a senior subordinated basis to the Holder of this Note the payments of
principal of, premium, if any, and interest, including any Additional Interest,
on this Note in the amounts and at the time when due and interest on the overdue
principal, premium, if any, and interest, if any, of this Note, if lawful, and
the payment or performance of all other Obligations of the Company under the
Indenture or the Notes, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of this Note, Article
11 of the Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article 11 of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Note.
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are expressly subordinated and subject in right of payment to the prior payment
in full of all Guarantor Senior Debt (as defined in the Indenture) of such
Guarantor, to the extent and in the manner provided in Article 11 of the
Indenture and reference is hereby made to the Indenture for the precise terms of
the Guarantee and all of the other provisions of the Indenture to which this
Guarantee relates.
B-1
This Guarantee is subject to release upon the terms set forth
in the Indenture.
EACH OF THE CORPORATE GUARANTORS
LISTED ON SCHEDULE I ATTACHED
----------
HERETO
By: ____________________________
Name:
Title:
EACH OF THE OTHER GUARANTORS
LISTED ON SCHEDULE I ATTACHED
----------
HERETO
By: Its respective Managing
Member or Sole Manager,
as the case may be
By: ____________________________
Name:
Title:
B-2
Schedule I
Schedule of Guarantors
----------------------
AOR Holding Company of Indiana, Inc.
AOR Management Company of Alabama, Inc.
AOR Management Company of Arizona, Inc.
AOR Management Company of Central Florida, Inc.
AOR Management Company of Florida, Inc.
AOR Management Company of Indiana, Inc.
AOR Management Company of Missouri, Inc.
AOR Management Company of Nevada, Inc.
AOR Management Company of New York, Inc.
AOR Management Company of North Carolina, Inc.
AOR Management Company of Ohio, Inc.
AOR Management Company of Oklahoma, Inc.
AOR Management Company of Oregon, Inc.
AOR Management Company of Pennsylvania, Inc.
AOR Management Company of South Carolina, Inc.
AOR Management Company of Texas, Inc.
AOR Management Company of Virginia, Inc.
AOR of Indiana Management Partnership
AOR of Texas Management Limited Partnership
AOR Real Estate, Inc.
AOR Synthetic Real Estate, Inc.
AORIP, Inc.
AORT Holding Company, Inc.
Greenville Radiation Care, Inc.
Physician Reliance Holdings, LLC
Physician Reliance Network, Inc.
Physician Reliance, L.P.
PRN Physician Reliance, LLC
RMCC Cancer Center, Inc.
TOPS Pharmacy Services, Inc.
US Oncology Corporate, Inc.
US Oncology Research, Inc.
B-3
EXHIBIT C-1
-----------
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER
------------------------------------------------
We are delivering this letter in connection with a proposed purchase
of 9 5/8% Senior Subordinated Notes due 2012 (the "Notes") of US Oncology, Inc.
(the "Company").
We hereby confirm that:
we are an "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act of 1933, as amended (the "Securities
Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act (an "Institutional Accredited Investor");
any purchase of Notes by us will be for our own account or for the account
of one or more other Institutional Accredited Investors;
in the event that we purchase any Notes, we will acquire Notes having a
minimum purchase price of at least $100,000 for our own account and for
each separate account for which we are acting;
we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of purchasing Notes;
we are not acquiring Notes with a view to any distribution thereof in a
transaction that would violate the Securities Act or the securities laws of
any State of the United States or any other applicable jurisdiction;
provided that the disposition of our property and the property of any
accounts for which we are acting as fiduciary shall remain at all times
within our control; and
we have received a copy of the offering memorandum and we acknowledge that
we have had access to such financial and other information, and have been
afforded the opportunity to ask such questions of representatives of the
Company and receive answers thereto, as we deem necessary in connection
with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and that
the Notes have not been registered under the Securities Act, and we agree, on
our own behalf and on behalf of each account for which we acquire Notes, that
such Notes may be offered, resold, pledged or otherwise transferred only (i) to
a Person whom we reasonably believe to be a qualified institutional buyer (as
defined in Rule 144A under the Securities Act) in a transaction meeting the
C-1-1
requirements of Rule 144 under the Securities Act, outside the United States to
a non-U.S. Person in a transaction meeting the requirements of Rule 904 under
the Securities Act, or in accordance with another exception from the
registration requirements of the Securities Act (and based upon an Opinion of
Counsel if the Company so requests), (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We understand that the Registrar will not be required
to accept for registration any Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand and agree that the Notes purchased by
us will bear a legend reflecting the substance of this paragraph. We agree to
notify any subsequent purchasers of Notes from us of the resale restrictions set
forth above.
We acknowledge that you, the Company, and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
_____________________________
(Name of Purchaser)
By: _________________________
Name:
Title:
Address: ____________________
_____________________________
_____________________________
C-1-2
EXHIBIT C-2
-----------
FORM OF CERTIFICATE TO BE DELIVERED
-----------------------------------
IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
-----------------------------------------------------
[Date]
JP Morgan Chase Bank
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Corporate Trust Department
Re: US ONCOLOGY, INC. (THE "COMPANY")
9 5/8% SENIOR SUBORDINATED NOTES DUE 2012
(THE "NOTES")
Ladies and Gentlemen:
In connection with the proposed sale of $[ ] aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) The offer of the Notes was not made to a Person in the
United States;
(2) Either (a) at the time the buy offer was originated, the
transferee was outside of the United States or we and any Person acting
on our behalf reasonably believe that the transferee was outside of the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither
we nor any Person acting on our behalf know that the transaction has
been prearranged for a buyer in the United States;
(3) No directed selling efforts have been made in the United
States in contravention of the requirements of rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) The transaction is not part of a plan or a scheme to evade
the registration requirements of the Securities Act; and
(5) We have advised the transferee of the transfer restrictions
applicable to the Notes.
C-2-1
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 proceeding or official inquiry with respect
to the matters covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: _________________________________
Authorized Signature
C-2-2