Exhibit 4(a)
INDENTURE dated as of March 1, 1995 between National Medical
Enterprises, Inc., a Nevada corporation (the "COMPANY"), and The Bank of New
York, as trustee (the "TRUSTEE").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 9 5/8% Senior
Notes due 2002 (the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
PROVIDED that beneficial ownership of 10% or more of the voting securities of
a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET SALE" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business consistent with past
practices (PROVIDED that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company and its Subsidiaries taken
as a whole shall be governed by Section 3.13 and/or Article 4 hereof and not by
Section 3.10 hereof), and (ii) the issuance or sale by the Company or any of its
Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single transaction or a series
of related transactions (a) that have a fair market value in excess of $25.0
million or (b) for net proceeds in excess of $25.0 million. Notwithstanding the
foregoing: (a) a transfer of assets by the Company to a Subsidiary or by a
Subsidiary to the Company or to another Subsidiary, (b) an issuance of Equity
Interests by a Subsidiary to the Company or to another Subsidiary, (c) a
Restricted Payment that is permitted by Section 3.07 hereof and (d) a Hospital
Swap shall not be deemed to be an Asset Sale.
"BOARD OF DIRECTORS" means the Board of Directors of the Company
or any authorized committee thereof.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE" means, at the time any determination thereof is to
be made, any lease of property, real or personal, in respect of which the
present value of the minimum rental commitment would be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a Capital Lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any Person or group (as such
term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than
to a Person or group who, prior to such transaction, held a majority of the
voting power of the voting stock of the Company, (ii) the acquisition by any
Person or group, as defined above, of a direct or indirect interest in more than
50% of the voting power of the voting stock of the Company, by way of merger,
consolidation or otherwise, or (iii) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors.
"CHANGE OF CONTROL TRIGGERING EVENT" means the occurrence of both
a Change of Control and a Rating Decline.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means National Medical Enterprises, Inc., as obligor
under the Securities, unless and until a successor replaces National Medical
Enterprises, Inc., in accordance with Article 4 hereof and thereafter includes
such successor.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period PLUS (i) an
amount equal to any extraordinary loss of such Person PLUS any net loss
realized in connection with an Asset Sale (to the extent such losses were
deducted in computing such Consolidated Net Income), PLUS (ii) provision for
taxes based on income or profits of such Person and its Subsidiaries for such
period, to the extent such provision for taxes was included in computing such
Consolidated Net
2
Income, PLUS (iii) the Fixed Charges of such Person and its Subsidiaries for
such period, to the extent that such Fixed Charges were deducted in computing
such Consolidated Net Income, PLUS (iv) depreciation and amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) of such
Person and its Subsidiaries for such period to the extent that such depreciation
and amortization were deducted in computing such Consolidated Net Income, in
each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization of, a Subsidiary of the referent
Person shall be added to Consolidated Net Income to compute Consolidated Cash
Flow only to the extent (and in same proportion) that the Net Income of such
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for
any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP but
excluding any one-time charge or expense incurred in order to consummate the
Refinancing; PROVIDED that (i) the Net Income of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net
Income of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders of
such Person and its consolidated Subsidiaries as of such date PLUS (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock), LESS
all write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made in accordance
with GAAP as a result of the acquisition of such business) subsequent to the
date hereof in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person, and excluding the cumulative effect of a
change in accounting principles, all as determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date hereof or (ii) was nominated for election or
elected to such Board of Directors with the
3
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 9.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"DEFAULT" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to September
1, 2002.
"EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date hereof, until such amounts are repaid, including all
reimbursement obligations with respect to letters of credit outstanding as of
the date hereof (other than letters of credit issued pursuant to the New Credit
Facility).
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period; PROVIDED, HOWEVER,
that in the event that the Company or any of its Subsidiaries incurs, assumes,
Guarantees or redeems any Indebtedness (other than revolving credit borrowings)
or issues preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the "CALCULATION DATE"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee or
redemption of Indebtedness, or such issuance or redemption of preferred stock,
as if the same had occurred at the beginning of the applicable four-quarter
reference period; and PROVIDED FURTHER that for purposes of making the
computation referred to above, (i) acquisitions that have been made by the
Company or any of its Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period, and (ii) the Consolidated Cash Flow and Fixed
Charges attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded.
4
"FIXED CHARGES" means, with respect to any Person for any period,
the sum of (i) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letters
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Subsidiaries that was capitalized during such period, and (iii)
any interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Subsidiaries or secured by a Lien on assets of such
Person or one of its Subsidiaries (whether or not such Guarantee or Lien is
called upon) and (iv) the product of (a) all cash dividend payments (and
non-cash dividend payments in the case of a Person that is a Subsidiary) on any
series of preferred stock of such Person, TIMES (b) a fraction, the numerator
of which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, as in effect from time to time.
"GOVERNMENT SECURITIES" means direct 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.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts or currency swap agreements and (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values.
"HOLDER" means a Person in whose name a Security is registered.
"HOSPITAL" means a hospital, outpatient clinic, long-term care
facility or other facility that is used or useful in the provision of healthcare
services.
"HOSPITAL SWAP" means an exchange of assets by the Company or a
Subsidiary of the Company for one or more Hospitals and/or one or more Related
Businesses or for the
5
Capital Stock of any Person owning one or more Hospitals and/or one or more
Related Businesses.
"INDEBTEDNESS" means with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INTERNATIONAL SUBSIDIARIES" means International-NME, Inc., NME
(Australia) Pty. Limited, and National Medical Enterprises Corp., and each of
such Person's respective Subsidiaries.
"INVESTMENT GRADE" means a rating of BBB- or higher by S&P or Baa3
or higher by Moody's or the equivalent of such ratings by S&P or Moody's. In
the event that the Company shall select any other Rating Agency, the equivalent
of such ratings by such Rating Agency shall be used.
"INVESTMENTS" means, with respect to any Person, all investments
by such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions, purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP; PROVIDED that an acquisition of assets,
Equity Interests or other securities by the Company for consideration consisting
of common equity securities of the Company shall not be deemed to be an
Investment.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"METROCREST LETTER OF CREDIT FACILITY" means that certain letter
of credit facility, dated as of February 28, 1995, by and among the Company and
Morgan Guaranty Trust Company of New York and the other banks that are party
thereto, in an aggregate principal amount of $91.35 million.
6
"MOODY'S" means Moody's Investors Services, Inc. and its
successors.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Subsidiaries
or the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
permitted Non-Cash Consideration received in any Asset Sale), net of the direct
costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions) and any other
expenses incurred or to be incurred by the Company or a Subsidiary as a direct
result of the sale of such assets (including, without limitation, severance,
relocation, lease termination and other similar expenses), taxes actually paid
or payable as a result thereof, amounts required to be applied to the repayment
of Indebtedness (other than Senior Term Debt or Senior Revolving Debt) secured
by a Lien on the asset or assets that were the subject of such Asset Sale and
any reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"NEW CREDIT FACILITY" means that certain Credit Agreement, dated
as of February 28, 1995, by and among the Company and Morgan Guaranty Trust
Company of New York and the other banks that are party thereto, providing for
$1.8 billion in aggregate principal amount of Senior Term Debt and up to $500.0
million in aggregate principal amount of Senior Revolving Debt, including any
related notes, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, extended, renewed,
refunded, replaced or refinanced, in whole or in part, from time to time.
"NON-CASH CONSIDERATION" means any non-cash consideration received
by the Company or a Subsidiary of the Company in connection with an Asset Sale
and any non-cash consideration received by the Company or any of its
Subsidiaries upon disposition thereof.
"NON-RECOURSE DEBT" means Indebtedness of an International
Subsidiary (i) as to which neither the Company nor any of its Subsidiaries
(other than the International Subsidiaries) (a) provides credit support of any
kind (including any undertaking, agreement or instrument that would constitute
Indebtedness of the Company or any of its Subsidiaries), or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an International Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Subsidiaries (other than the International Subsidiaries)
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated
7
or payable prior to its stated maturity (except any such provisions set forth in
Existing Indebtedness until the same is repaid or refinanced).
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICERS" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
and any Vice President of the Company or any Subsidiary, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers, one of whom must be the principal executive officer, principal
financial officer or principal accounting officer of the Company.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary or the Trustee.
"PAYMENT DEFAULT" means any failure to pay any scheduled
installment of interest or principal on any Indebtedness within the grace period
provided for such payment in the documentation governing such Indebtedness.
"PERFORMANCE INVESTMENT PLAN" means the 1989 Performance
Investment Plan adopted by the Company's Board of Directors on March 10, 1989.
"PERMITTED COLLATERAL" means, collectively, (i) all Capital Stock
and other Equity Interests of the Company's present and future direct
Subsidiaries, (ii) all intercompany Indebtedness owed to the Company and (iii)
all Capital Stock and other Equity Interests in Westminster Health Care Holdings
PLC owned by the Company or its Subsidiaries.
"PERMITTED LIENS" means (i) Liens on Permitted Collateral securing
Senior Term Debt of the Company under the New Credit Facility in an aggregate
principal amount at any time outstanding not to exceed an amount equal to $1.8
billion less the aggregate amount of all repayments, optional or mandatory, of
the principal of any Senior Term Debt (other than repayments that are
immediately reborrowed) that have been made since the date hereof; (ii) Liens on
Permitted Collateral securing Senior Revolving Debt and letters of credit of the
Company incurred pursuant to the New Credit Facility in an aggregate principal
amount at any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential reimbursement obligation of the
Company with respect thereto) not to exceed an amount equal to $500.0 million
less the aggregate amount of all Net Proceeds of Asset Sales applied to
permanently reduce commitments with respect to such Indebtedness pursuant to
Section 3.10 hereof since the date hereof; (iii) Liens in favor of the Company;
(iv) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Company or any Subsidiary of the Company or
becomes a Subsidiary of the Company; PROVIDED
8
that such Liens were in existence prior to the contemplation of such merger,
consolidation or acquisition and do not extend to any assets other than those of
the Person merged into or consolidated with the Company or that becomes a
Subsidiary of the Company; (v) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary of the Company, PROVIDED
that such Liens were in existence prior to the contemplation of such
acquisition; (vi) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vii) Liens existing on the date
hereof, including, without limitation, Liens on Permitted Collateral securing
reimbursement obligations under the Metrocrest Letter of Credit Facility; (viii)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; PROVIDED that any reserve or
other appropriate provision as shall be required in conformity with GAAP shall
have been made therefor; (ix) other Liens on assets of the Company or any
Subsidiary of the Company securing Indebtedness that is permitted by the terms
hereof to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed 10% of the Stockholders' Equity of the Company; and
(x) Liens to secure Permitted Refinancing Indebtedness incurred to refinance
Indebtedness that was secured by a Lien permitted hereunder and that was
incurred in accordance with the provisions hereof; PROVIDED that such Liens do
not extend to or cover any property or assets of the Company or any Subsidiary
other than assets or property securing the Indebtedness so refinanced.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used solely to extend, refinance, renew, replace, defease or
refund, other Indebtedness of the Company or any of its Subsidiaries; PROVIDED
that, except in the case of Indebtedness of the Company issued in exchange for,
or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, Indebtedness of a Subsidiary of the Company: (i)
the principal amount of such Permitted Refinancing Indebtedness does not exceed
the principal amount of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of any premiums paid and
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Securities, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Securities on terms at least as
favorable to the Holders of Securities as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
9
"PHYSICIAN JOINT VENTURE DISTRIBUTIONS" means distributions made
by the Company or any of its Subsidiaries to any physician, pharmacist or other
allied healthcare professional in connection with the unwinding, liquidation or
other termination of any joint venture or similar arrangement between any such
Person and the Company or any of its Subsidiaries.
"PHYSICIAN SUPPORT OBLIGATIONS" means any obligation or Guarantee
incurred in the ordinary course of business by the Company or a Subsidiary of
the Company in connection with any advance, loan or payment to, or on behalf of
or for the benefit of any physician, pharmacist or other allied healthcare
professional for the purpose of recruiting, redirecting or retaining the
physician, pharmacist or other allied healthcare professional to provide service
to patients in the service area of any Hospital or Related Business owned or
operated by the Company or any of its Subsidiaries; EXCLUDING, HOWEVER,
compensation for services provided by physicians, pharmacists or other allied
healthcare professionals to any Hospital or Related Business owned or operated
by the Company or any of its Subsidiaries.
"QUALIFIED EQUITY INTERESTS" shall mean all Equity Interests of
the Company other than Disqualified Stock of the Company.
"RATING AGENCIES" means (i) S&P and (ii) Moody's or (iii) if S&P
or Moody's or both shall not make a rating of the Securities publicly available,
a nationally recognized securities rating agency or agencies, as the case may
be, selected by the Company, shall be substituted for S&P or Moody's or both, as
the case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the
following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Ba,
B, Caa, Ca, C and D (or equivalent successor categories); and (iii) the
equivalent of any such category of S&P or Moody's used by another Rating Agency.
In determining whether the rating of the Securities has decreased by one or more
gradations, gradations within Rating Categories (+ and - for S&P, 1, 2 and 3 for
Moody's; or the equivalent gradations for another Rating Agency) shall be taken
into account (E.G., with respect to S&P, a decline in a rating from BB+ to BB,
as well as from BB- to B+, shall constitute a decrease of one gradation).
"RATING DATE" means the date which is 90 days prior to the earlier
of (i) a Change of Control and (ii) the first public notice of the occurrence of
a Change of Control or of the intention by the Company to effect a Change of
Control.
"RATING DECLINE" means the occurrence on or within 90 days after
the date of the first public notice of the occurrence of a Change of Control or
of the intention by the Company to effect a Change of Control (which period
shall be extended so long as the rating of the Securities is under publicly
announced consideration for possible downgrade by any of the Rating Agencies)
of: (a) in the event the Securities are rated by either Moody's or S&P on the
Rating Date as Investment Grade, a decrease in the rating of the Securities by
both Rating Agencies to a rating that is below Investment Grade, or (b) in the
event the Securities are rated below Investment Grade by both Rating Agencies on
the Rating Date, a decrease in the rating of the
10
Securities by either Rating Agency by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"REFINANCING" has the meaning ascribed to it in the prospectus
dated February 21, 1995 relating to the Securities.
"RELATED BUSINESS" means a healthcare business affiliated or
associated with a Hospital or any business related or ancillary to the provision
of healthcare services or the operation of a Hospital.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means an Investment in any of the
International Subsidiaries.
"SECURITIES" means the securities described above, issued under
this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR REVOLVING DEBT" means revolving credit loans outstanding
from time to time under the New Credit Facility.
"SENIOR SUBORDINATED ASSET SALE OFFER" means the offer to purchase
Senior Subordinated Notes made by the Company to holders of Senior Subordinated
Notes under Section 4.10 of the Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTES" means the 10-1/8% Senior Subordinated
Notes due 2005 of the Company in an aggregate principal amount of $900.0
million, issued pursuant to the Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as
of March 1, 1995 between the Company and The Bank of New York, as trustee, as
amended or supplemented from time to time, under which the Senior Subordinated
Notes were issued.
"SENIOR TERM DEBT" means term loans outstanding from time to time
under the New Credit Facility.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
11
"S&P" means Standard & Poor's Corporation and its successors.
"SPECIFIED ASSETS" means the Company's and its Subsidiaries'
interest in The Hillhaven Corporation and Westminster Healthcare Holdings PLC
owned as of the date hereof and the Capital Stock and assets of the
International Subsidiaries.
"STOCKHOLDERS' EQUITY" means, with respect to any Person as of any
date, the stockholders' equity of such Person determined in accordance with GAAP
as of the date of the most recent available internal financial statements of
such Person, and calculated on a pro forma basis to give effect to any
acquisition or disposition by such Person consummated or to be consummated since
the date of such financial statements and on or prior to the date of such
calculation.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof); PROVIDED that
no International Subsidiary shall be deemed to be a "Subsidiary" for any purpose
hereunder for so long as such International Subsidiary: (a) has no Indebtedness
other than Existing Indebtedness and Non-Recourse Debt; (b) is not a party to
any agreement, contract, arrangement or understanding with the Company or any of
its other Subsidiaries (other than International Subsidiaries) except any such
agreement, contract, arrangement or understanding that (i) was in effect on the
date hereof, or (ii) meets the requirements of Section 3.11 hereof; (c) is a
Person with respect to which neither the Company nor any of its Subsidiaries
(other than International Subsidiaries) has any direct or indirect obligation
(x) to subscribe for additional Equity Interests or (y) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified level of operating results except, in each case, any such obligation
in existence on the date hereof or created pursuant to the terms of any
Investment permitted by Section 3.07 hereof; and (d) has not Guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Subsidiaries (other than International Subsidiaries).
If, at any time, any International Subsidiary would fail to meet the foregoing
requirements, it shall thereafter be deemed to be a Subsidiary for all purposes
of this Indenture and any Indebtedness of such International Subsidiary shall be
deemed to be incurred by a Subsidiary of the Company as of such date (and, if
such Indebtedness is not permitted to be incurred as of such date under Section
3.09 hereof, the Company shall be in default of such covenant).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA, except as provided in Section 8.03 hereof.
"TRANSFER RESTRICTION" means, with respect to the Company's
Subsidiaries, any encumbrance or restriction on the ability of any Subsidiary to
(i)(a) pay dividends or make any
12
other distributions to the Company or any of its Subsidiaries (1) on its Capital
Stock or (2) with respect to any other interest or participation in, or measured
by, its profits, or (b) pay any Indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to the Company or any of its
Subsidiaries, or (iii) transfer any of its properties or assets to the Company
or any of its Subsidiaries.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- -------
"Affiliate Transaction"..................... 3.11
"Bankruptcy Law"............................ 5.01
"Change of Control Offer"................... 3.13
"Change of Control Payment"................. 3.13
"Change of Control Payment Date"............ 3.13
"Commencement Date"......................... 2.15
"Covenant Defeasance"....................... 7.03
"Custodian"................................. 5.01
"Event of Default".......................... 5.01
"Excess Proceeds"........................... 3.10
"incur"..................................... 3.09
"Legal Defeasance".......................... 7.02
"Legal Holiday"............................. 9.07
"Notice of Default"......................... 5.01
"Offer Amount".............................. 2.15
"Offer Period".............................. 2.15
"Paying Agent".............................. 2.03
"Purchase Date"............................. 2.15
13
"Purchase Price"............................ 3.10
"Registrar"................................. 2.03
"Restricted Payments"....................... 3.07
"Senior Asset Sale Offer"................... 3.10
SECTION 1.03. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
"OBLIGOR" on the Securities means the Company and any successor
obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them.
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; and
(5) provisions apply to successive events and transactions.
14
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
SECTION 2.01. FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Securities may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company is subject
or usage. Each Security shall be dated the date of its authentication. The
Securities shall be issuable only in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Securities for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture. The
form of Trustee's certificate of authentication to be borne by the Securities
shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities. The
aggregate principal amount of Securities outstanding at any time shall not
exceed the amount set forth herein except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Securities
may be presented for registration of transfer or for exchange (including any
co-registrar, the "REGISTRAR") and (ii) an office or agency where Securities
may be presented for payment (the "PAYING AGENT"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent. The Company may
change any
15
Paying Agent, Registrar or co-registrar without prior notice to any Holder. The
Company shall notify the Trustee and the Trustee shall notify the Holders of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-registrar. The Company shall enter into an
appropriate agency agreement with any Agent not a party to this Indenture, which
shall incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 6.07 hereof.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to the due date of principal of, premium, if any, and
interest on any Securities, the Company shall deposit with the Trustee or the
Paying Agent money sufficient to pay such principal, premium, if any, and
interest becoming due. The Company shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent shall hold in trust for
the benefit of the Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, and interest on the Securities,
and shall notify the Trustee of any Default by the Company in making any such
payment. While any such Default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company) shall have no
further liability for the money delivered to the Trustee. If the Company acts
as Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Section Holders and shall otherwise comply with TIA Section 312(a). If the
Registrar, the Company shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders, including the
aggregate principal amount of the Securities held by each thereof, and the
Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
When Securities are presented to the Registrar with a request to
register the transfer or to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall register the transfer or
make the exchange if its requirements for such trans-
16
actions are met; PROVIDED, HOWEVER, that any Security presented or surrendered
for registration of transfer or exchange shall be duly endorsed or accompanied
by a written instruction of transfer in form satisfactory to the Registrar and
the Trustee duly executed by the Holder thereof or by his attorney duly
authorized in writing. To permit registrations of transfer and exchanges, the
Company shall issue and the Trustee shall authenticate Securities at the
Registrar's request, subject to such rules as the Trustee may reasonably
require.
Neither the Company nor the Registrar shall be required to register
the transfer or exchange of a Security between the record date and the next
succeeding interest payment date.
No service charge shall be made to any Holder for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.10 or 8.05 hereof, which shall be paid by the Company).
Prior to due presentment for registration of transfer of any
Security, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of, premium, if any, and
interest on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
SECTION 2.07. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the
Company, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss which any of them may
suffer if a Security is replaced. Each of the Company and the Trustee may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
17
If the principal amount of any Security is considered paid under
Section 3.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
Subject to Section 2.09 hereof, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities then outstanding have concurred in any demand, direction, waiver
or consent, Securities owned by the Company or any Affiliate of the Company
shall be considered as though not outstanding, except that for purposes of
determining whether the Trustee shall be protected in relying on any such
demand, direction, waiver or consent, only Securities that a Responsible Officer
actually knows to be so owned shall be so considered. Notwithstanding the
foregoing, Securities that are to be acquired by the Company or an Affiliate of
the Company pursuant to an exchange offer, tender offer or other agreement shall
not be deemed to be owned by the Company or an Affiliate of the Company until
legal title to such Securities passes to the Company or such Affiliate, as the
case may be.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee, upon receipt of the written order of the Company signed
by two Officers of the Company, shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company and the Trustee consider appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee, upon receipt of the written order of the Company signed by two
Officers of the Company, shall authenticate definitive Securities in exchange
for temporary Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as definitive Securities.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall return
such cancelled Securities to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to
18
the related payment date, in each case at the rate provided in the Securities
and in Section 3.01 hereof. The Company shall, with the consent of the Trustee,
fix or cause to be fixed each such special record date and payment date. At
least 15 days before the special record date, the Company (or the Trustee, in
the name of and at the expense of the Company) shall mail to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders
entitled to vote or consent to any action by vote or consent authorized or
Trustee is not the permitted under this Indenture shall be determined as
316(c).
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and
if it does so, the Trustee shall use the CUSIP number in notices to Holders;
PROVIDED that any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the notice or on the
Securities and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the
Trustee of any change in the CUSIP number.
SECTION 2.15. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that the Company shall commence a Senior Asset Sale
Offer pursuant to Section 3.10 hereof, it shall follow the procedures specified
below.
No later than the date on which the aggregate amount of Excess
Proceeds exceeds $25.0 million, the Company shall notify the Trustee of such
Senior Asset Sale Offer and provide the Trustee with an Officers' Certificate
setting forth, in addition to the information to be included therein pursuant to
Section 3.10 hereof, the calculations used in determining the amount of Net
Proceeds to be applied to the purchase of Securities. The Company shall
commence or cause to be commenced the Senior Asset Sale Offer on a date no later
than 10 Business Days after such notice (the "COMMENCEMENT DATE").
The Senior Asset Sale Offer shall remain open for at least 20
Business Days after the Commencement Date relating to such Senior Asset Sale
Offer and shall remain open for no more than such 20 Business Days, except to
the extent required by applicable law (as so extended, the "OFFER PERIOD").
No later than one Business Day after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount (the "OFFER
Amount") of Securities required to be purchased in such Senior Asset Sale Offer
pursuant to Section 3.10 hereof or, if less than the Offer Amount has been
tendered, all Securities tendered in response to the Senior Asset Sale Offer, in
each case for an amount in cash equal to the Purchase Price.
If the Purchase Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest shall
be paid to the Person in
19
whose name a Security is registered at the close of business on such record
date, and no additional interest shall be payable to Holders who tender
Securities pursuant to the Senior Asset Sale Offer.
On the Commencement Date of any Senior Asset Sale Offer, the Company
shall send, or at the Company's request the Trustee shall send, by first class
mail, a notice to each of the Holders at their last registered address, with a
copy to the Trustee and the Paying Agent, offering to repurchase the Securities
held by such Holder pursuant to the procedure specified in such notice. Such
notice, which shall govern the terms of the Senior Asset Sale Offer, shall
contain all instructions and materials necessary to enable the Holders to tender
Securities pursuant to the Senior Asset Sale Offer and shall state:
(1) that the Senior Asset Sale Offer is being made pursuant
to this Section 2.15 and Section 3.10 hereof and the
length of time the Senior Asset Sale Offer shall remain
open;
(2) the Offer Amount, the Purchase Price and the Purchase
Date;
(3) that any Security not tendered or accepted for payment
shall continue to accrue interest;
(4) that, unless the Company defaults in the payment of the
Purchase Price, any Security accepted for payment
pursuant to the Senior Asset Sale Offer shall cease to
accrue interest after the Purchase Date;
(5) that Holders electing to have a Security purchased
pursuant to any Senior Asset Sale Offer shall be
required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Company, a
depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice prior to
the close of business on the Business Day next preceding
the Purchase Date;
(6) that Holders shall be entitled to withdraw their
election if the Company, depositary or Paying Agent, as
the case may be, receives, not later than the close of
business on the Business Day next preceding the
termination of the Offer Period, a facsimile
transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder
delivered for purchase and a statement that such Holder
is withdrawing his election to have such Security
purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the
Trustee shall select the Securities to be purchased on a
PRO RATA basis (with such adjustments as may be deemed
appropriate by the Trustee so that
20
only Securities in denominations of $1,000, or integral
multiples thereof, shall be purchased);
(8) that Holders whose Securities were purchased only in
part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities
surrendered; and
(9) the circumstances and relevant facts regarding such
Asset Sale and any other information that would be
material to a decision as to whether to tender a
Security pursuant to the Senior Asset Sale Offer.
On the Purchase Date, the Company shall, to the extent lawful, (i)
accept for payment, on a PRO RATA basis to the extent necessary, an aggregate
principal amount equal to the Offer Amount of Securities tendered pursuant to
the Senior Asset Sale Offer, or if less than the Offer Amount has been tendered,
all Securities or portion thereof so tendered, (ii) deposit with the Paying
Agent an amount equal to the Purchase Price in respect of all Securities or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Securities so accepted together with an Officers' Certificate
stating the aggregate principal amount of Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each Holder
of Securities so tendered payment in an amount equal to the Purchase Price for
such Securities and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) a new Security to such Holder equal in
principal amount to any unpurchased portion of the Securities surrendered, if
any; PROVIDED that each such new Security shall be in a principal amount of
$1,000 or an integral multiple thereof. The Company shall publicly announce the
results of the Senior Asset Sale Offer on or as soon as practicable after the
Purchase Date.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Securities as a result of the Senior Asset Sale Offer.
ARTICLE 3
COVENANTS
SECTION 3.01. PAYMENT OF SECURITIES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Securities on the dates and in the manner provided
in this Indenture and the Securities. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary of the Company, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Company, no later than
five days following the date
21
of payment, any money (including accrued interest) that exceeds such amount of
principal, premium, if any, and interest to be paid on the Securities.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the interest rate then applicable to the Securities
to the extent lawful. In addition, it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities 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 Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any
manner relieve the Company 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 Bank of New York, 101 Barclay
Street, 21 West, New York, New York 10286 as one such office or agency of the
Company in accordance with Section 2.03 hereof.
SECTION 3.03. COMMISSION REPORTS.
(i) So long as any of the Securities remain outstanding, the
Company shall provide to the Trustee within 15 days after the filing thereof
with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. All obligors on the Securities shall comply with the provisions
provided for in TIA Section of TIA Section 314(a). Notwithstanding that the
reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise
report on an annual and quarterly basis on forms provided for such annual and
quarterly reporting pursuant to rules and regulations promulgated by the
Commission, the Company shall file with the Commission and provide to the
Trustee (a) within 90 days after the end of each fiscal year, annual reports on
Form 10-K (or any
22
successor or comparable form) containing the information required to be
contained therein (or required in such successor or comparable form), including
a "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
Operations" and a report thereon by the Company's certified public accountants;
(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year, reports on Form 10-Q (or any successor or comparable form)
containing the information required to be contained therein (or required in any
successor or comparable form), including a "MANAGEMENT'S DISCUSSION AND
Analysis of Financial Condition and Results of Operations"; and (c) promptly
from time to time after the occurrence of an event required to be therein
reported, such other reports on Form 8-K (or any successor or comparable form)
containing the information required to be contained therein (or required in any
successor or comparable form); PROVIDED, HOWEVER, that the Company shall not
be in default of the provisions of this Section 3.03(i) for any failure to file
reports with the Commission solely by the refusal of the Commission to accept
the same for filing. Each of the financial statements contained in such reports
shall be prepared in accordance with GAAP.
(ii) The Trustee, at the Company's expense, shall promptly mail
copies of all such annual reports, information, documents and other reports
provided to the Trustee pursuant to Section 3.03(i) hereof to the Holders at
their addresses appearing in the register of Securities maintained by the
Registrar.
(iii) Whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability and make such information available
to securities analysts and prospective investors upon request.
(iv) The Company shall provide the Trustee with a sufficient number
of copies of all reports and other documents and information that the Trustee
may be required to deliver to the Holders under this Section 3.03.
(v) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 3.04. COMPLIANCE CERTIFICATE.
(i) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each has kept, observed, performed
and fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge each entity has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action each is taking or proposes
23
to take with respect thereto), all without regard to periods of grace or notice
requirements, and that to the best of his or her knowledge no event has occurred
and remains in existence by reason of which payments on account of the principal
of or interest, if any, on the Securities is prohibited or if such event has
occurred, a description of the event and what action each is taking or proposes
to take with respect thereto.
(ii) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 3.03 above shall be accompanied by a
written statement of the Company's certified independent public accountants (who
shall be a firm of established national reputation) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the Company or any
Subsidiary of the Company has violated any provisions of Article 3 or of Article
4 of this Indenture or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(iii) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of (a) any Default or Event of Default or (b) any event of default under any
other mortgage, indenture or instrument referred to in Section 5.01(v) hereof,
an Officers' Certificate specifying such Default, Event of Default or event of
default and what action the Company is taking or proposes to take with respect
thereto.
SECTION 3.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except (i) as contested in good faith by appropriate proceedings and with
respect to which appropriate reserves have been taken in accordance with GAAP or
(ii) where the failure to effect such payment is not adverse in any material
respect to the Holders.
SECTION 3.06. 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, that 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 shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 3.07. LIMITATIONS ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on account of the
24
Company's or any of its Subsidiaries' Equity Interests (other than (w) Physician
Joint Venture Distributions, (x) dividends or distributions payable in Qualified
Equity Interests of the Company, (y) dividends or distributions payable to the
Company or any Subsidiary of the Company and (z) dividends or distributions by
any Subsidiary of the Company payable to all holders of a class of Equity
Interests of such Subsidiary on a PRO RATA basis); (ii) purchase, redeem or
otherwise acquire or retire for value any Equity Interests of the Company; (iii)
make any principal payment on, or purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is subordinated to the Securities,
except at the original final maturity date thereof or pursuant to the
Refinancing; or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "RESTRICTED PAYMENTS"), unless, at the time of and after giving effect
to such Restricted Payment (the amount of any such Restricted Payment, if other
than cash, shall be the fair market value (as conclusively evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee within 60 days prior to the date of such Restricted
Payment) of the asset(s) proposed to be transferred by the Company or such
Subsidiary, as the case may be, pursuant to such Restricted Payment):
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the most recently
ended four full fiscal quarter period for which internal
financial statements are available immediately preceding the
date of such Restricted Payment, have been permitted to incur
at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 3.09 hereof; and
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments (excluding Restricted Payments
permitted by clauses (ii), (iii), (iv) and (v) of the next
succeeding paragraph) made by the Company and its Subsidiaries
after the date hereof, is less than the sum of (1) 50% of the
Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first
fiscal quarter commencing after the date hereof to the end of
the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit),
PLUS (2) 100% of the aggregate net cash proceeds received by
the Company from the issue or sale (other than to a Subsidiary
of the Company) since the date hereof of Qualified Equity
Interests of the Company or of debt securities of the Company
or any of its Subsidiaries that have been converted into or
exchanged for such Qualified Equity Interests of the Company,
PLUS (3) $20.0 million.
25
If no Default or Event of Default has occurred and is continuing or
would occur as a consequence thereof, the foregoing provisions shall not
prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such
payment would have complied with the provisions hereof;
(ii) the payment of cash dividends on any series of Disqualified
Stock issued after the date hereof in an aggregate amount not
to exceed the cash received by the Company since the date
hereof upon issuance of such Disqualified Stock;
(iii) the repurchase of the Performance Investment Plan investment
options from the holders thereof;
(iv) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company or any Subsidiary in
exchange for, or out of the net cash proceeds of, the
substantially concurrent sale (other than to a Subsidiary of
the Company) of Qualified Equity Interests of the Company;
PROVIDED that the amount of any such net cash proceeds that
are utilized for any such redemption, repurchase, retirement
or other acquisition shall be excluded from clause (c)(2) of
the preceding paragraph;
(v) the defeasance, redemption or repurchase of subordinated
Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness or in exchange for or out
of the net cash proceeds from the substantially concurrent
sale (other than to a Subsidiary of the Company) of Qualified
Equity Interests of the Company; PROVIDED that the amount of
any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall
be excluded from clause (c)(2) of the preceding paragraph;
(vi) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any
Subsidiary of the Company held by any member of the Company's
(or any of its Subsidiaries') management pursuant to any
management equity subscription agreement or stock option
agreement; PROVIDED that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $5.0 million in any twelve-month
period; and
(vii) the making and consummation of (A) a Senior Subordinated Asset
Sale Offer in accordance with the provisions of the Senior
Subordinated Note Indenture with any Excess Proceeds that
remain after consummation of a Senior Asset Sale Offer, within
120 days of the consummation of such Senior Asset Sale Offer,
or (B) a Change of Control Offer with respect to the Senior
Subordinated Notes in accordance with the provisions of the
Senior Subordinated Note Indenture.
26
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this covenant were computed.
SECTION 3.08. LIMITATIONS ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual Transfer Restriction, except for such Transfer
Restrictions existing under or by reason of:
(a) Existing Indebtedness as in effect on the date hereof,
(b) this Indenture,
(c) applicable law,
(d) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Subsidiaries as
in effect at the time of such acquisition (except to the
extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition or in violation of Section
3.09 hereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of
the Person, so acquired, PROVIDED that the Consolidated Cash
Flow of such Person shall not be taken into account in
determining whether such acquisition was permitted by the
terms hereof except to the extent that such Consolidated Cash
Flow would be permitted to be dividends to the Company without
the prior consent or approval of any third party,
(e) customary non-assignment provisions in leases entered into in
the ordinary course of business,
(f) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the
ability of any of the Company's Subsidiaries to transfer the
property so acquired to the Company or any of its
Subsidiaries,
(g) Permitted Refinancing Indebtedness, PROVIDED that the
restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive
than those contained in the agreements governing the
Indebtedness being refinanced, or
(h) the New Credit Facility and related documentation as the same
is in effect on the date hereof and as amended or replaced
from time to time, PROVIDED that no such amendment or
replacement is more restrictive as to
27
Transfer Restrictions than the New Credit Facility and related
documentation as in effect on the date hereof.
SECTION 3.09. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "INCUR") after the date hereof any Indebtedness (including
Acquired Debt), and the Company shall not issue any Disqualified Stock and shall
not permit any of its Subsidiaries to issue any shares of preferred stock;
PROVIDED, HOWEVER, that the Company may incur Indebtedness (including
Acquired Debt) and the Company may issue shares of Disqualified Stock if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least (x) 2.25 to 1 if
such incurrence or issuance occurs on or before March 31, 1996, or (y) 2.5 to 1
if such incurrence or issuance occurs at any time thereafter, in each case
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period. Indebtedness consisting of reimbursement obligations in
respect of a letter of credit shall be deemed to be incurred when the letter of
credit is first issued. The Company shall not permit any of the International
Subsidiaries to incur any Indebtedness other than Non-Recourse Debt.
The foregoing provisions shall not apply to:
(a) the incurrence by the Company of Senior Term Debt pursuant to
the New Credit Facility in an aggregate principal amount at
any time outstanding not to exceed an amount equal to $1.8
billion less the aggregate amount of all repayments, optional
or mandatory, of the principal of any Senior Term Debt (other
than repayments that are immediately reborrowed) that have
been made since the date hereof;
(b) the incurrence by the Company of Senior Revolving Debt and
letters of credit pursuant to the New Credit Facility in an
aggregate principal amount at any time outstanding (with
letters of credit being deemed to have a principal amount
equal to the maximum potential reimbursement obligation of the
Company with respect thereto) not to exceed an amount equal to
$500.0 million less the aggregate amount of all Net Proceeds
of Asset Sales applied to permanently reduce the commitments
with respect to such Indebtedness pursuant to Section 3.10
hereof;
(c) the incurrence by the Company of Indebtedness represented by
the Securities;
(d) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;
28
(e) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to extend, refinance, renew,
replace, defease, or refund, Indebtedness that was permitted
by this Indenture to be incurred (including, without
limitation, Existing Indebtedness);
(f) the incurrence by the Company of Hedging Obligations that are
incurred for the purpose of fixing or hedging interest rate or
currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by the terms hereof to be
outstanding or any receivable or liability the payment of
which is determined by reference to a foreign currency;
PROVIDED that the notional principal amount of any such
Hedging Obligation does not exceed the principal amount of the
Indebtedness to which such Hedging Obligation relates;
(g) the incurrence by the Company or any of its Subsidiaries of
Physician Support Obligations;
(h) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any
of its Subsidiaries;
(i) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by performance bonds, standby letters
of credit or appeal bonds, in each case to the extent incurred
in the ordinary course of business of the Company or such
Subsidiary;
(j) the incurrence by any Subsidiary of the Company of
Indebtedness, the aggregate principal amount of which,
together with all other Indebtedness of the Company's
Subsidiaries at the time outstanding (excluding the Existing
Indebtedness until repaid or refinanced and excluding
Physician Support Obligations), does not exceed the greater of
(1) 10% of the Company's Stockholders' Equity as of the date
of incurrence or (2) $10.0 million; PROVIDED that, in the
case of clause (1) only, the Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal quarters
for which internal financial statements are available
immediately preceding the date on which such Indebtedness is
incurred would have been at least (x) 2.25 to 1 if such
incurrence occurs on or before March 31, 1996, or (y) 2.5 to 1
if such incurrence occurs at any time thereafter, in each case
determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if such
Indebtedness had been incurred at the beginning of such
four-quarter period; and
(k) the incurrence by the Company of Indebtedness (in addition to
Indebtedness permitted by any other clause of this paragraph)
in an aggregate principal amount at any time outstanding not
to exceed $250.0 million.
29
SECTION 3.10. ASSET SALES.
The Company shall not, and shall not permit any of its Subsidiaries
to consummate an Asset Sale, unless (i) the Company (or the Subsidiary as the
case may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (as conclusively determined by a resolution of
the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed
of and (ii) except in the case of a sale of Specified Assets, at least 80% of
the consideration therefor received by the Company or such Subsidiary is in the
form of cash; PROVIDED, HOWEVER, that for purposes of this provision, (x) the
amount of (A) any liabilities (as shown on the Company's or such Subsidiary's
most recent balance sheet or in the notes thereto), of the Company or any
Subsidiary (other than, in the case of an Asset Sale by the Company, liabilities
that are by their terms subordinated to the Securities) that are assumed by the
transferee of any such assets and (B) any securities or other obligations
received by the Company or any such Subsidiary from such transferee that are
immediately converted by the Company or such Subsidiary into cash (or as to
which the Company or such Subsidiary has received at or prior to the
consummation of the Asset Sale a commitment (which may be subject to customary
conditions) from a nationally recognized investment, merchant or commercial bank
to convert into cash within 90 days of the consummation of such Asset Sale and
which are thereafter actually converted into cash within such 90-day period)
shall be deemed to be cash (but shall not be deemed to be Net Proceeds for
purposes of the following provisions until reduced to cash); and (y) the fair
market value of any Non-Cash Consideration received by the Company or a
Subsidiary in any Asset Sale shall be deemed to be cash (but shall not be deemed
to be Net Proceeds for purposes of the following provisions until reduced to
cash) to the extent that the aggregate fair market value (as conclusively
determined by a resolution of the Board of Directors set forth in an Officers'
Certificate delivered to the Trustee) of all Non-Cash Consideration (measured at
the time received and without giving effect to any subsequent changes in value)
held by the Company immediately after consummation of such Asset Sale does not
exceed 10% of the Company's Stockholders' Equity as of the date of such
consummation.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds (i) to purchase one or more
Hospitals or Related Businesses and/or a controlling interest in the Capital
Stock of a Person owning one or more Hospitals and/or one or more Related
Businesses, (ii) to make a capital expenditure or to acquire other tangible
assets, in each case, that are used or useful in any business in which the
Company is permitted to be engaged pursuant to Section 3.15 hereof, (iii) to
permanently reduce Senior Term Debt or Existing Indebtedness of a Subsidiary or
(iv) to permanently reduce Senior Revolving Debt (and to correspondingly reduce
commitments with respect thereto), except that up to an aggregate of $200.0
million of Net Proceeds from Asset Sales may be applied after the date hereof to
reduce Senior Revolving Debt without a corresponding reduction in commitments
with respect thereto. Pending the final application of any such Net Proceeds,
the Company may temporarily reduce Senior Revolving Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by the terms hereof. Any
Net Proceeds from Asset Sales that are not so invested or applied shall be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $25.0 million, the Company shall make an offer to all Holders
of Securities and holders of any other Indebtedness of the Company ranking on a
parity with the Securities from time to time outstanding with similar provisions
requiring the Company
30
to make an offer to purchase or to redeem such Indebtedness with the proceeds
from any asset sales, PRO RATA in proportion to the respective principal
amounts of the Securities and such other Indebtedness then outstanding (a
"SENIOR ASSET SALE OFFER") to purchase the maximum principal amount of
Securities and such other Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase (the "PURCHASE PRICE"), in accordance with the procedures set forth
in Section 2.15 hereof. To the extent that the aggregate amount of Securities
and such other Indebtedness tendered pursuant to a Senior Asset Sale Offer is
less than the Excess Proceeds, the Company may use any remaining Excess Proceeds
for general corporate purposes, including an offer to purchase Senior
Subordinated Notes pursuant to Section 4.10 of the Senior Subordinated Note
Indenture. If the aggregate principal amount of Securities and such other
Indebtedness surrendered by holders pursuant to a Senior Asset Sale Offer
exceeds the amount of Excess Proceeds, the Securities and such other
Indebtedness shall be purchased on a PRO RATA basis. Upon completion of a
Senior Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
SECTION 3.11. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION")
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Subsidiary than those that could have been obtained
in a comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction involving aggregate consideration in excess of $5.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (i)
above and that such Affiliate Transaction was approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction involving aggregate consideration in excess of $15.0
million, an opinion as to the fairness of such Affiliate Transaction to the
Company or such Subsidiary from a financial point of view issued by an
investment banking firm of national standing; PROVIDED that (x) transactions
or payments pursuant to any employment arrangements or employee or director
benefit plans entered into by the Company or any of its Subsidiaries in the
ordinary course of business and consistent with the past practice of the Company
or such Subsidiary, (y) transactions between or among the Company and/or its
Subsidiaries and (z) transactions permitted under Section 3.07 hereof, in each
case, shall not be deemed to be Affiliate Transactions.
31
SECTION 3.12. LIMITATIONS ON LIENS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly create, incur, assume or suffer to exist any Lien
(except Permitted Liens) on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom unless all payments due hereunder and under the Securities are secured
on an equal and ratable basis with the Obligations so secured until such time as
such Obligations are no longer secured by a Lien.
SECTION 3.13. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control Triggering Event, each
Holder of Securities shall have the right to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of such
Holder's Securities pursuant to the offer described below (the "CHANGE OF
CONTROL OFFER") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, thereon to
the date of purchase (the "CHANGE OF CONTROL PAYMENT") on a date that is not
more than 90 days after the occurrence of such Change of Control Triggering
Event (the "CHANGE OF CONTROL PAYMENT DATE").
Within 30 days following any Change of Control Triggering Event, the
Company shall mail, or at the Company's request the Trustee shall mail, a notice
of a Change of Control to each Holder (at its last registered address with a
copy to the Trustee and the Paying Agent) offering to repurchase the Securities
held by such Holder pursuant to the procedure specified in such notice. The
Change of Control Offer shall remain open from the time of mailing until the
close of business on the Business Day next preceding the Change of Control
Payment Date. The notice, which shall govern the terms of the Change of Control
Offer, shall contain all instructions and materials necessary to enable the
Holders to tender Securities pursuant to the Change of Control Offer and shall
state:
(1) that the Change of Control Offer is being made pursuant to
this Section 3.13 and that all Securities tendered will be
accepted for payment;
(2) the Change of Control Payment and the Change of Control
Payment Date, which date shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed;
(3) that any Security not tendered will continue to accrue
interest in accordance with the terms of this Indenture;
(4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Securities accepted for payment
pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to
any Change of Control Offer will be required to surrender the
Security, with the form
32
entitled "Option of Holder to Elect Purchase" on the reverse
of the Security completed, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address
specified in the notice prior to the close of business on the
Business Day next preceding the Change of Control Payment
Date;
(6) that Holders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be,
receives, not later than the close of business on the Business
Day next preceding the Change of Control Payment Date, a
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder
delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with
respect to PRO FORMA historical financial information after
giving effect to such Change of Control, information regarding
the Person or Persons acquiring control and such Person's or
Persons' business plans going forward) and any other
information that would be material to a decision as to whether
to tender a Security pursuant to the Change of Control Offer.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Securities or portions thereof
properly tendered and not withdrawn pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to each Holder of Securities so tendered the Change of
Control Payment for such Securities, and the Trustee shall promptly authenticate
and mail (or cause to be transferred by book entry) to each Holder a new
Security equal in principal amount to any unpurchased portion of the Securities
surrendered, if any; PROVIDED that each such new Security shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities as a result of a Change of Control.
33
SECTION 3.14. CORPORATE EXISTENCE.
Subject to Section 3.13 and Article 4 hereof, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
SECTION 3.15. LINE OF BUSINESS
The Company shall not, and shall not permit any of its Subsidiaries
to, engage to any material extent in any business other than the ownership,
operation and management of Hospitals and Related Businesses.
SECTION 3.16. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS BY
Subsidiaries
The Company shall not permit any Subsidiary, directly or indirectly,
to Guarantee or secure the payment of any other Indebtedness of the Company or
any of its Subsidiaries (except Indebtedness of a Subsidiary of such Subsidiary
or Physician Support Obligations) unless such Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture, in substantially the
form attached hereto as Exhibit B, providing for the Guarantee of the payment of
the Securities by such Subsidiary, which Guarantee shall be senior to or PARI
PASSU with such Subsidiary's Guarantee of or pledge to secure such other
Indebtedness. Any such Guarantee by a Subsidiary of the Securities shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon the sale or other disposition, by way of merger or
otherwise, to any Person not an Affiliate of the Company, of all of the
Company's stock in, or all or substantially all the assets of, such Subsidiary,
which sale or other disposition is made in compliance with, and the Net Proceeds
therefrom are applied in accordance with, the applicable provisions hereof. The
foregoing provisions shall not be applicable to any one or more Guarantees of up
to $10.0 million in aggregate principal amount of Indebtedness of the Company at
any time outstanding.
SECTION 3.17. NO AMENDMENT TO SUBORDINATION PROVISIONS OF SENIOR
Subordinated Note Indenture
The Company shall not amend, modify or alter the Senior Subordinated
Note Indenture in any way that would (i) increase the principal of, advance the
final maturity date of or shorten the Weighted Average Life to Maturity of any
Senior Subordinated Notes such that the final maturity date of the Senior
Subordinated Notes is earlier than the 91st day following the final maturity
date of the Securities or (ii) amend the provisions of Article 10 of the Senior
33
Subordinated Indenture (which relates to subordination) or any of the defined
terms used therein in a manner that would be adverse to the Holders of the
Securities.
ARTICLE 4
SUCCESSORS
SECTION 4.01. LIMITATIONS ON MERGERS, CONSOLIDATIONS OR SALES OF ASSETS
The Company may not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless:
(i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have
been made is a corporation organized or existing under the
laws of the United States, any state thereof or the District
of Columbia;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the
entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made
assumes all the Obligations of the Company under this
Indenture and the Securities pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) shall have
Consolidated Net Worth immediately after the transaction equal
to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) shall, at the
time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning
of the applicable four-quarter period, be permitted to incur
at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 3.09 hereof.
The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel, covering clauses (i) through (iv) above, stating that the
proposed transaction and such
35
supplemental indenture comply with this Indenture. The Trustee shall be
entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel.
SECTION 4.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 4.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor corporation), and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company, herein.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. EVENTS OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT":
(i) default for 30 days in the payment when due of interest
on the Securities;
(ii) default in payment when due of the principal of or
premium, if any, on the Securities at maturity or
otherwise;
(iii) failure by the Company to comply with the provisions of
Sections 3.07, 3.09, 3.10, or 3.13 hereof;
(iv) failure by the Company to comply with any other covenant
or agreement in the Indenture or the Securities for the
period and after the notice specified below;
(v) any default that occurs under any mortgage, indenture or
instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Significant
Subsidiaries (or the payment of which is Guaranteed by
the Company or any of its Significant Subsidiaries),
whether such Indebtedness or Guarantee exists on the
date hereof or is created after the date hereof, which
default (a) constitutes a Payment Default or (b) results
in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount
of any such Indebtedness,
36
together with the principal amount of any other such
Indebtedness under which there has been a Payment
Default or that has been so accelerated, aggregates
$25.0 million or more;
(vi) failure by the Company or any of its Significant
Subsidiaries to pay a final judgment or final judgments
aggregating in excess of $25.0 million entered by a
court or courts of competent jurisdiction against the
Company or any of its Significant Subsidiaries if such
final judgment or judgments remain unpaid or
undischarged for a period (during which execution shall
not be effectively stayed) of 60 days after their entry;
(vii) the Company or any Significant Subsidiary thereof
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 in which it is
the debtor,
(c) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) admits in writing its inability generally to pay
its debts as the same become due; and
(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 thereof in an involuntary
case in which it is the debtor,
(b) appoints a Custodian of the Company or any
Significant Subsidiary thereof or for all or
substantially all of the property of the Company
or any Significant Subsidiary thereof, or
(c) orders the liquidation of the Company or any
Significant Subsidiary thereof,
and the order or decree remains unstayed and in effect for 60
days.
37
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "CUSTODIAN" means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (iv) is not an Event of Default until the
Trustee notifies the Company in writing, or the Holders of at least 25% in
principal amount of the then outstanding Securities notify the Company and the
Trustee in writing, of the Default and the Company does not cure the Default
within 60 days after receipt of such notice. The written notice must specify
the Default, demand that it be remedied and state that the notice is a "NOTICE
OF DEFAULT."
SECTION 5.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (vii) or (viii) of Section 5.01 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities by written notice to the
Company and the Trustee, may declare the unpaid principal of, premium, if any,
and any accrued and unpaid interest on all the Securities to be due and payable
immediately. Upon such declaration the principal, premium, if any, and interest
shall be due and payable immediately. If an Event of Default specified in
clause (vii) or (viii) of Section 5.01 hereof occurs with respect to the Company
or any Significant Subsidiary thereof such an amount shall IPSO FACTO become
and be immediately due and payable without further action or notice on the part
of the Trustee or any Holder.
If an Event of Default occurs under this Indenture prior to the
maturity of the Securities by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of such Securities prior to the date of maturity, then
a premium with respect thereto (expressed as a percentage of the amount that
would otherwise be due but for the provisions of this sentence) shall become and
be immediately due and payable to the extent permitted by law upon the
acceleration of such Securities if such Event of Default occurs during the
twelve-month period beginning on March 1 of the years set forth below:
YEAR PERCENTAGE
---- ----------
1995.............................. 109.625%
1996.............................. 108.342%
1997.............................. 107.058%
1998.............................. 105.775%
1999.............................. 104.492%
2000.............................. 103.208%
2001.............................. 101.925%
2002.............................. 100.642%
Any determination regarding the primary purpose of any such action
or inaction, as the case may be, shall be made by and set forth in a resolution
of the Board of Directors (including the concurrence of a majority of the
independent directors of the Company then
38
serving) delivered to the Trustee after consideration of the business reasons
for such action or inaction, other than the avoidance of payment of such premium
or prohibition on redemption. In the absence of fraud, each such determination
shall be final and binding upon the Holders of Securities. Subject to Section
6.01 hereof, the Trustee shall be entitled to rely on the determination set
forth in any such resolutions delivered to the Trustee.
SECTION 5.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal or interest on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any 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 to the extent permitted by law.
SECTION 5.04. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
on behalf of the Holders of all of the Securities waive any existing Default or
Event of Default and its consequences under this Indenture except a continuing
Default or Event of Default in the payment of the principal of, premium, if any,
or interest on any Security. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
SECTION 5.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders or that may involve the Trustee in
personal liability. The Trustee may take any other action which it deems proper
which is not inconsistent with any such direction.
SECTION 5.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Securities only if:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
39
(ii) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities 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 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal, premium, if any, and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.
SECTION 5.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 5.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor for the whole amount of principal, premium, if any, and interest
remaining unpaid on the Securities and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
amounts due the Trustee under Section 6.07 hereof, including the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the
40
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties which the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.10. 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, its agents and attorneys for amounts due
under Section 6.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 5.10 upon five Business Days prior notice to
the Company.
SECTION 5.11. 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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, 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 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 5.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
41
ARTICLE 6
TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE.
(i) 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
(ii) Except during the continuance of an Event of Default known to
the Trustee:
(a) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the
Trustee need perform only those duties that are specifically
set forth in this Indenture or the TIA and no others, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee, and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in
the case of any such certificates or opinions which by any
provisions hereof are required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(iii) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own
willful misconduct,
except that:
(a) this paragraph does not limit the effect of paragraph
(ii) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) 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 5.05 hereof.
(iv) Whether or not therein expressly so provided every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (i), (ii), and (iii) of this Section.
42
(v) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives security and
indemnity satisfactory to it against any loss, liability or expense.
(vi) 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.
Absent written instruction from the Company, the Trustee shall not be required
to invest any such money. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(vii) The Trustee shall not be deemed to have knowledge of any
matter unless such matter is actually known to a Responsible Officer.
SECTION 6.02. RIGHTS OF TRUSTEE.
(i) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(ii) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(iii) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(iv) 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. A permissive right
granted to the Trustee hereunder shall not be deemed an obligation to act.
(v) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 6.10 and 6.11 hereof.
43
SECTION 6.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, nor shall it
be accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, nor shall it be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, nor shall it be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders.
SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each December 31 beginning with the December 31
following the date hereof, the Trustee shall mail to the Holders a brief report
Company may not be subject to the dated as of such reporting date that complies
with TIA Section 313(a) (but if no event described in TIA Section 313(a) has
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Securities are listed. The Company shall promptly notify
the Trustee when the Securities are listed on any stock exchange.
SECTION 6.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee shall agree in writing. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities, damages, claims or expenses incurred by it arising out of or in
connection with the acceptance of its duties and the administration of the
trusts under this Indenture, except as set forth below. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
44
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 6.07 shall survive
the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.01(vii) or (viii) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
SECTION 6.08. 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.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 6.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or 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 then
45
outstanding Securities may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 6.10 hereof, such
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 duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 6.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 6.08, the Company's obligations under Section 6.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 6.09. SUCCESSOR TRUSTEE OR AGENT BY MERGER, ETC.
If the Trustee or any Agent 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 or Agent.
SECTION 6.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
occurred within the twelve months preceding the requirements of TIA Section
310(b).
SECTION 6.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
310(a)(1), (2) and (5). The Trustee is subject to TIA Section relationship
shall be subject to TIA Section 311(a) to the extent indicated therein.
46
ARTICLE 7
DISCHARGE OF INDENTURE
SECTION 7.01. DEFEASANCE AND DISCHARGE OF THIS INDENTURE AND THE
Securities.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, with respect
to the Securities, elect to have either Section 7.02 or 7.03 hereof be applied
to all outstanding Securities upon compliance with the conditions set forth
below in this Article 7.
SECTION 7.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 7.01 hereof of the option
applicable to this Section 7.02, the Company shall be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 7.05 hereof and the other
Sections of this Indenture referred to in clauses (i) and (ii) of this Section
7.02, and to have satisfied all its other obligations under such Securities and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 7.04 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Securities when such payments are due,
(ii) the Company's obligations with respect to such Securities under Sections
2.04, 2.06, 2.07, 2.10 and 3.02 hereof, (iii) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 6.07 hereof, and the Company's obligations in
connection therewith and (iv) this Article 7. Subject to compliance with this
Article 7, the Company may exercise its option under this Section 7.02
notwithstanding the prior exercise of its option under Section 7.03 hereof with
respect to the Securities.
SECTION 7.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 7.01 hereof of the option
applicable to this Section 7.03, the Company shall be released from its
obligations under the covenants contained in Sections 2.15, 3.07, 3.08, 3.09,
3.10, 3.11, 3.12, 3.13, 3.15, 3.16 and 3.17 and Article 4 hereof with respect to
the outstanding Securities on and after the date the conditions set forth below
are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Securities shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Securities shall not be deemed outstanding for accounting purposes). For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by
47
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 5.01(iii) hereof, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby. In
addition, upon the Company's exercise under Section 7.01 hereof of the option
applicable to this Section 7.03, Sections 5.01(iv) through 5.01(vi) hereof shall
not constitute Events of Default.
SECTION 7.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 7.02 or Section 7.03 hereof to the outstanding Securities:
(i) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.10 who shall agree to comply with the provisions of this
Article 7 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
cash in U.S. Dollars in an amount, or (b) non-callable Government
Securities that through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, cash in U.S. Dollars in
an amount, or (c) a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge the principal
of, premium, if any, and interest on such outstanding Securities on the
stated maturity date of such principal or installment of principal,
premium, if any, or interest.
(ii) In the case of an election under Section 7.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States confirming that (a) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (b) since
the date hereof, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Securities
will not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred.
(iii) In the case of an election under Section 7.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States confirming that the Holders of the outstanding Securities
will not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred.
48
(iv) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit (other
than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) or, insofar as Section 5.01(vii) or
5.01(viii) hereof is concerned, at any time in the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
(v) Such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound (other than a breach, violation or default
resulting from the borrowing of funds to be applied to such deposit).
(vi) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
(vii) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 7.02 or 7.03 hereof was not made by the Company
with the intent of preferring the Holders of the Securities over the other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others.
(viii) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 7.02 hereof or the Covenant Defeasance under
Section 7.03 hereof (as the case may be) have been complied with as
contemplated by this Section 7.04.
SECTION 7.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 7.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
7.05, the "Trustee") pursuant to Section 7.04 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 7.04 hereof or the principal
and interest received in respect thereof other
49
than any such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Securities.
Anything in this Article 7 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any money or non-callable Government Securities held by it as provided
in Section 7.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
7.04(i) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 7.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the NEW YORK TIMES and
THE WALL STREET JOURNAL (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
SECTION 7.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Dollars
or non-callable Government Securities in accordance with Section 7.02 or 7.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 7.02 or 7.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 7.02 or
7.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company makes
any payment of principal of, premium, if any, or interest on any Security
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Security to receive such payment from the
money held by the Trustee or Paying Agent.
50
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 8.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture
or the Securities without the consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iii) to provide for any supplemental indenture required
pursuant to Section 3.16 hereof;
(iv) to provide for the assumption of the Company's
obligations to the Holders of the Securities in the case
of a merger, consolidation or sale of assets pursuant to
Article 4 hereof;
(v) to make any change that would provide any additional
rights or benefits to the Holders of the Securities or
that does not adversely affect the legal rights
hereunder of any such Holder; or
(vi) to comply with requirements of the Commission in order
to effect or maintain the qualification of this
Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such supplemental indenture,
and upon receipt by the Trustee of the documents described in Section 8.06
hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into such
supplemental indenture which affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 8.02. WITH CONSENT OF HOLDERS.
Except as provided in the next succeeding paragraphs, this Indenture
or the Securities may be amended or supplemented with the consent of the Holders
of at least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for such Securities), and any existing default or compliance with any provision
of this Indenture or the Securities may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities
(including consents obtained in connection with a tender offer or exchange offer
for such Securities).
51
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 8.06 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
Subject to Sections 5.04 and 5.07 hereof, the Holders of a majority in aggregate
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities. Without the consent of each Holder affected, however, an amendment
or waiver may not (with respect to any Security held by a non-consenting
Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Security;
(iii) reduce the rate of or change the time for payment of interest
on any Security;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities
(except a rescission of acceleration of the Securities by the
Holders of at least a majority in aggregate principal amount
thereof and a waiver of the payment default that resulted from
such acceleration);
(v) make any Security payable in money other than that stated in
the Securities;
(vi) make any change in Section 5.04 or 5.07 hereof; or
(vii) make any change in this sentence of this Section 8.02.
52
SECTION 8.03. COMPLIANCE WITH TIA.
Every amendment to this Indenture or the Securities shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to its
Security if the Trustee receives written notice of revocation before the date
the waiver or amendment becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
for determining which Holders must consent to such amendment or waiver. If the
Company fixes a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee prior to such solicitation
pursuant to Section 2.05 hereof or (ii) such other date as the Company shall
designate.
SECTION 8.05. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security thereafter authenticated. The Company in exchange for
all Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment or waiver.
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 8 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 6.01, shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or Supplemental Indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it shall be valid and
binding upon the Company in accordance with its terms. The Company may not sign
an amendment or supplemental indenture until the Board of Directors approves it.
53
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 9.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company:
National Medical Enterprises, Inc.
2700 Colorado Avenue
Santa Monica, California 90404
Telecopier No.: (310) 998-6700
Attention: Treasurer
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Telecopier No.: (213) 687-5600
Attention: Thomas C. Janson, Jr.
If to the Trustee:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if
54
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Unless otherwise set forth above, any notice or communication to a
Holder shall be mailed by first class mail, certified or registered, return
receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or
listed in TIA Section 311(b). A Trustee who has resigned or been removed
to the extent required by the TIA. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 9.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
communication shall also be so mailed to any Person described in TIA Section
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 9.04. 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 (which shall include the statements
set forth in Section 9.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 9.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.
SECTION 9.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
55
(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 satisfied; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied; PROVIDED,
HOWEVER, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 9.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 9.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 9.08. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
Shareholders
No director, officer, employee, incorporator or shareholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of the Securities
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
SECTION 9.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
56
SECTION 9.10. GOVERNING LAW.
The internal law of the State of New York, shall govern and be used
to construe this Indenture and the Securities, without regard to the conflict of
laws provisions thereof.
SECTION 9.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 9.12. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 9.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities 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, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
SECTION 9.14. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 9.15. 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 of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
57
SIGNATURES
Dated as of _______________ NATIONAL MEDICAL ENTERPRISES, INC.
By:
-------------------------------------
Name: Terence P. McMullen
Title: Senior Vice President
Attest:
- ---------------------------- (SEAL)
Richard B. Silver
Dated as of _______________ THE BANK OF NEW YORK, as Trustee
By:
-------------------------------------
Name:
Title:
Attest:
- --------------------------- (SEAL)
58
EXHIBIT A
(Face of Security)
9-5/8% Senior Note
due September 1, 2002
CUSIP:
No. $____________
NATIONAL MEDICAL ENTERPRISES, INC.
promises to pay to
_________________________________________________________________________
or its registered assigns, the principal sum of ________________________________
Dollars on September 1, 2002.
Interest Payment Dates: March 1 and September 1, commencing September 1, 1995.
Record Dates: February 15 and August 15 (whether or not a Business Day).
NATIONAL MEDICAL ENTERPRISES, INC.
By: _________________________
A-1
Dated: __________, ____
(SEAL)
Trustee's Certificate of Authentication:
This is one of the Securities referred
to in the within-mentioned Indenture:
The Bank of New York, as Trustee
By: ___________________________
Authorized Signatory
A-2
(Back of Security)
9 5/8% SENIOR NOTE
due September 1, 2002
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. National Medical Enterprises, Inc., a Nevada
corporation (the "COMPANY"), promises to pay interest on the principal amount
of this Security at the rate and in the manner specified below.
The Company shall pay interest in cash on the principal amount of
this Security at the rate per annum of 9/ /%. The Company shall pay interest
semiannually in arrears on March 1 and September 1 of each year, commencing
September 1, 1995 to Holders of record on the immediately preceding February 15
and August 15, respectively, or if any such date of payment is not a Business
Day on the next succeeding Business Day (each an "INTEREST PAYMENT DATE").
Interest shall be computed on the basis of a 360-day year comprised
of twelve 30-day months. Interest shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
the original issuance of the Securities. To the extent lawful, the Company
shall pay interest on overdue principal at the rate of 1% per annum in excess of
the interest rate then applicable to the Securities; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are cancelled after such record
date and on or before such Interest Payment Date. The Holder hereof must
surrender this Security to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Principal, premium, if any, and interest shall be payable at the office or
agency of the Company maintained for such purpose within the City and State of
New York or, at the option of the Company, payment of interest may be made by
check mailed to the Holder's registered address. Notwithstanding the foregoing,
all payments with respect to Securities the Holders of which have given wire
transfer instructions, on or before the relevant record date, to the Paying
Agent shall be made by wire transfer of immediately available funds to the
accounts specified by such Holders.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee shall act
as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar or co-registrar without prior notice to any Holder. The Company and
any of its Subsidiaries may act in any such capacity.
A-3
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of March 1, 1995 (the "INDENTURE"), between the Company
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA") as in effect on the date of the Indenture. The Securities are subject to
all such terms, and Holders are referred to the Indenture and such act for a
statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Securities. The Securities are
unsecured general obligations of the Company. The Securities are limited to
$300,000,000 in aggregate principal amount.
5. MANDATORY REDEMPTION. Subject to the Company's obligation to
make an offer to repurchase Securities under certain circumstances pursuant to
Sections 3.10 and 3.13 of the Indenture (as described in paragraph 6 below), the
Company shall have no mandatory redemption or sinking fund obligations with
respect to the Securities.
6. REPURCHASE AT OPTION OF HOLDER. (i) If there is a Change of
Control Triggering Event, the Company shall offer to repurchase on the Change of
Control Payment Date all outstanding Securities at 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon to the Change
of Control Payment Date. Holders that are subject to an offer to purchase shall
receive a Change of Control Offer from the Company prior to any related Change
of Control Payment Date and may elect to have such Securities purchased by
completing the form entitled "Option of Holder to Elect Purchase" appearing
below.
(ii) If the Company or a Subsidiary consummates an Asset Sale,
within 365 days after the receipt of any Net Proceeds from such Asset Sale, the
Company may apply such Net Proceeds (a) to purchase one or more Hospitals or
Related Businesses and/or a controlling interest in the Capital Stock of a
Person owning one or more Hospitals and/or one or more Related Businesses, (b)
to make a capital expenditure or to acquire other tangible assets, in each case,
that are used or useful in any business in which the Company is permitted to be
engaged pursuant to Section 3.15 of the Indenture, (c) to permanently reduce
Senior Term Debt or Existing Indebtedness of a Subsidiary or (d) to permanently
reduce Senior Revolving Debt (and to correspondingly reduce commitments with
respect thereto), except that up to an aggregate of $200.0 million of Net
Proceeds from Asset Sales may be applied after the date of the Indenture to
reduce Senior Revolving Debt without a corresponding reduction in commitments
with respect thereto. Pending the final application of any such Net Proceeds,
the Company may temporarily reduce Senior Revolving Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indenture. Any
Net Proceeds from any Asset Sale that are not so invested or applied shall be
deemed to constitute "EXCESS PROCEEDS." When the aggregate amount of Excess
Proceeds exceeds $25.0 million, the Company shall make an offer to all Holders
of Securities and holders of any other Indebtedness of the Company ranking on a
parity with the Securities from time to time outstanding with similar provisions
requiring the Company to make an offer to purchase or to redeem such
Indebtedness with the proceeds from any asset sales, PRO RATA in proportion to
the respective principal amounts of the Securities and such other Indebtedness
then outstanding (a "SENIOR ASSET SALE OFFER") to purchase the maximum
principal amount of Securities and such other Indebtedness that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of purchase in accordance with the terms of the
A-4
Indenture. To the extent that the aggregate amount of Securities and such other
Indebtedness tendered pursuant to a Senior Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes, including an offer to purchase Senior Subordinated Notes
pursuant to Section 4.10 of the Senior Subordinated Note Indenture. If the
aggregate principal amount of Securities and such other Indebtedness surrendered
by holders pursuant to a Senior Asset Sale Offer exceeds the amount of Excess
Proceeds, the Securities and such other Indebtedness shall be purchased on a
PRO RATA basis. Holders that are the subject of an offer to purchase shall
receive a Senior Asset Sale Offer from the Company prior to any related purchase
date and may elect to have such Securities purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
7. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons, and in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Securities between a record date and the corresponding
Interest Payment Date.
8. PERSONS DEEMED OWNERS. Prior to due presentment to the
Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the Company may deem and treat the Person in whose name this Security
is registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Holder of a Security shall be treated as its owner for all
purposes.
9. AMENDMENT, SUPPLEMENT AND WAIVERS. Except as provided in the
next succeeding paragraphs, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange offer for Securities) and any
existing default or compliance with any provision of the Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including consents obtained
in connection with a tender offer or exchange offer for Securities).
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Security held by a non-consenting Holder of
Securities): (i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of or
change the fixed maturity of any Security, (iii) reduce the rate of or change
the time for payment of interest on any Security, (iv) waive a Default or Event
of Default in the payment of principal of or premium, if any, or interest on the
Securities, (except a rescission of acceleration of the Securities by the
Holders of at least a majority in aggregate principal amount thereof and a
waiver of the payment default that resulted from such acceleration), (v) make
any Security payable in money other than that stated in the Securities, (vi)
make any change in the provisions of the Indenture relating to waivers of past
Defaults or the rights of Holders of Securities to receive payments of principal
of or premium, if any, or
A-5
interest on the Securities or (vii) make any change in the foregoing amendment
and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of
Securities, the Company and the Trustee may amend or supplement the Indenture or
the Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to provide for any supplemental indenture required pursuant to Section 3.16 of
the Indenture, to provide for the assumption of the Company's obligations to
Holders of the Securities in the case of a merger, consolidation or sale of
assets, to make any change that would provide any additional rights or benefits
to the Holders of the Securities or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with requirements of
the Securities and Exchange Commission (the "COMMISSION") in order to effect
or maintain the qualification of the Indenture under the TIA.
10. DEFAULTS AND REMEDIES. Events of Default under the Indenture
include: (i) a default for 30 days in the payment when due of interest on the
Securities; (ii) a default in payment when due of the principal of or premium,
if any, on the Securities, at maturity or otherwise; (iii) a failure by the
Company to comply with the provisions described under the covenants "Limitations
on Restricted Payments," "Limitations on Incurrence of Indebtedness and Issuance
of Preferred Stock," "Asset Sales," and "Change of Control;" (iv) a failure by
the Company for 60 days after notice to comply with any of its other agreements
in the Indenture or the Securities; (v) any default that occurs under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Significant Subsidiaries (or the payment of which is
Guaranteed by the Company or any of its Significant Subsidiaries) whether such
Indebtedness or Guarantee exists on the date of the Indenture, or is created
after the date of the Indenture, which default (a) constitutes a Payment Default
or (b) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or that has been so accelerated, aggregates
$25.0 million or more; (vi) failure by the Company or any of its Significant
Subsidiaries to pay a final judgment or final judgments aggregating in excess of
$25.0 million entered by a court or courts or competent jurisdiction against the
Company or any of its Significant Subsidiaries if such final judgment or
judgments remain unpaid or undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after their entry; and (vii) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities by written notice to the Company and the Trustee, may
declare all the Securities to be due and payable immediately (plus, in the case
of an Event of Default that is the result of willful actions (or inactions) by
or on behalf of the Company intended to avoid prohibitions on redemptions of the
Securities contained in the Indenture or the Securities, an amount of premium
applicable pursuant to the Indenture). Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries,
all outstanding Securities shall become due and payable without further action
or notice. Holders of the Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. Subject to certain limitation,
Holders of a majority in principal amount of the
A-6
then outstanding Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in such Holders' interest.
The Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
on behalf of the Holders of all of the Securities waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or premium on, or the
principal of, the Securities.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
The above description of Events of Default and remedies is qualified
by reference, and subject in its entirety, to the more complete description
thereof contained in the Indenture.
11. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to incur
additional indebtedness and issue preferred stock, pay dividends or make other
distributions, repurchase Equity Interests or subordinated indebtedness, create
certain liens, enter into certain transactions with affiliates, sell assets of
the Company or its Subsidiaries, issue or sell Equity Interests of the Company's
Subsidiaries, issue Guarantees of Indebtedness by the Company's Subsidiaries and
enter into certain mergers and consolidations.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
13. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
Shareholders. No director, officer, employee, incorporator or shareholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by
A-7
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).
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on the Securities and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
National Medical Enterprises, Inc.
2700 Colorado Avenue
Santa Monica, California 90404
Attention: Treasurer
A-8
ASSIGNMENT FORM
To assign this Security, fill in the form below: For value received (i)
or (we) hereby sell, assign and transfer this Security to
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and do hereby irrevocably constitute and appoint_______________________________
Attorney to transfer this Security on the books of the Company with full power
of substitution in the premises.
_______________________________________________________________________________
Date: ______________
Your Signature:_______________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee.*
__________
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security purchased by
the Company pursuant to Section 3.10 or Section 3.13 of the Indenture, check the
appropriate box:
/ / Section 3.10 / / Section 3.13
(Asset Sale) (Change of Control)
If you want to have only part of the Security purchased by the Company
pursuant to Section 3.10 or Section 3.13 of the Indenture, state the amount you
elect to have purchased:
$ _______________
Date:____________
Your Signature:_______________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee.*
__________
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-10
EXECUTION COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NATIONAL MEDICAL ENTERPRISES, INC.
___________________________________________
$300,000,000
9/ /% SENIOR NOTES due 2002
___________________________________________
_________________________
INDENTURE
Dated as of March 1, 1995
_________________________
_________________________
THE BANK OF NEW YORK
_________________________
as Trustee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- ---------------- -----------------
310 (a)(1)............................................ 6.10
(a)(2)............................................. 6.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 6.10
(b) ............................................... 6.08; 6.10
(c) ............................................... N.A.
311 (a) .............................................. 6.11
(b) ............................................... 6.11
(c) ............................................... N.A.
312 (a)............................................... 2.05
(b)................................................ 9.03
(c) ............................................... 9.03
313 (a) .............................................. 6.06
(b)(1) ............................................ N.A.
(b)(2) ............................................ 6.06
(c) ............................................... 6.06; 9.02
(d)................................................ 6.06
314 (a) .............................................. 3.03; 9.02
(b) ............................................... N.A.
(c)(1)............................................. 9.04
(c)(2)............................................. 9.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e) .............................................. 9.05
(f)................................................ N.A.
315 (a)...............................................6.01(iii)(b)
(b)................................................ 6.05; 9.02
(c) .............................................. 6.01(i)
(d)................................................ 6.01(iii)
(e)................................................ 5.11
316 (a)(last sentence) ............................... 2.09
(a)(1)(a).......................................... 5.05
(a)(1)(b) ......................................... 5.04
(a)(2)............................................. N.A.
(b) ............................................... 5.07
(c) ............................................... 2.13; 8.04
317 (a)(1) ........................................... 5.08
(a)(2)............................................. 5.09
(b) ............................................... 2.04
318 (a)............................................... 9.01
(b)................................................ N.A.
(c)................................................ 9.01
N.A. means not applicable.
____________________________
*THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions................................ 1
Section 1.02. Other Definitions.......................... 13
Section 1.03. Incorporation by Reference of TIA.......... 14
Section 1.04. Rules of Construction...................... 14
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
Section 2.01. Form and Dating............................ 15
Section 2.02. Execution and Authentication............... 15
Section 2.03. Registrar and Paying Agent................. 15
Section 2.04. Paying Agent to Hold Money in Trust........ 16
Section 2.05. Holder Lists............................... 16
Section 2.06. Transfer and Exchange...................... 16
Section 2.07. Replacement Securities..................... 17
Section 2.08. Outstanding Securities..................... 17
Section 2.09. Treasury Securities........................ 18
Section 2.10. Temporary Securities....................... 18
Section 2.11. Cancellation............................... 18
Section 2.12. Defaulted Interest......................... 18
Section 2.13. Record Date................................ 19
Section 2.14. CUSIP Number............................... 19
Section 2.15. Offer to Purchase By Application of Excess
Proceeds....................................19
ARTICLE 3
COVENANTS
Section 3.01. Payment of Securities...................... 21
Section 3.02. Maintenance of Office or Agency............ 22
Section 3.03. Commission Reports......................... 22
Section 3.04. Compliance Certificate..................... 23
Section 3.05. Taxes...................................... 24
Section 3.06. Stay, Extension and Usury Laws............. 24
Section 3.07. Limitations on Restricted Payments......... 24
Section 3.08. Limitations on Dividend and Other Payment
Restrictions Affecting Subsidiaries........ 27
Section 3.09. Limitations on Incurrence of Indebtedness
and Issuance of Preferred Stock............ 28
i
Page
Section 3.10. Asset Sales................................ 30
Section 3.11. Limitations on Transactions with Affiliates 31
Section 3.12. Limitations on Liens....................... 32
Section 3.13. Change of Control.......................... 32
Section 3.14. Corporate Existence........................ 34
Section 3.15. Line of Business........................... 34
Section 3.16. Limitations on Issuances of Guarantees of
Indebtedness by Subsidiaries............... 34
Section 3.17. No Amendment to Subordination Provisions of
Senior Subordinated Note Indenture......... 34
ARTICLE 4
SUCCESSORS
Section 4.01. Limitations On Mergers, Consolidations or
Sales of Assets............................ 35
Section 4.02. Successor Corporation Substituted.......... 36
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.01. Events of Default.......................... 36
Section 5.02. Acceleration............................... 38
Section 5.03. Other Remedies............................. 39
Section 5.04. Waiver of Past Defaults.................... 39
Section 5.05. Control by Majority........................ 39
Section 5.06. Limitation on Suits........................ 39
Section 5.07. Rights of Holders to Receive Payment....... 40
Section 5.08. Collection Suit by Trustee................. 40
Section 5.09. Trustee May File Proofs of Claim........... 40
Section 5.10. Priorities................................. 41
Section 5.11. Undertaking for Costs...................... 41
ARTICLE 6
TRUSTEE
Section 6.01. Duties of Trustee.......................... 42
Section 6.02. Rights of Trustee.......................... 43
Section 6.03. Individual Rights of Trustee............... 43
Section 6.04. Trustee's Disclaimer....................... 44
Section 6.05. Notice of Defaults......................... 44
Section 6.06. Reports by Trustee to Holders.............. 44
Section 6.07. Compensation and Indemnity................. 44
Section 6.08. Replacement of Trustee..................... 45
Section 6.09. Successor Trustee or Agent by Merger, etc.. 46
ii
Page
Section 6.10. Eligibility; Disqualification.............. 46
Section 6.11. Preferential Collection of Claims Against
Company.................................... 46
ARTICLE 7
DISCHARGE OF INDENTURE
Section 7.01. Defeasance and Discharge of this Indenture
and the Securities......................... 47
Section 7.02. Legal Defeasance and Discharge............. 47
Section 7.03. Covenant Defeasance........................ 47
Section 7.04. Conditions to Legal or Covenant Defeasance. 48
Section 7.05. Deposited Money and Government Securities
to be Held in Trust; Other Miscellaneous
Provisions................................. 49
Section 7.06. Repayment to Company....................... 50
Section 7.07. Reinstatement.............................. 50
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
Section 8.01. Without Consent of Holders................. 51
Section 8.02. With Consent of Holders.................... 51
Section 8.03. Compliance with TIA........................ 53
Section 8.04. Revocation and Effect of Consents.......... 53
Section 8.05. Notation on or Exchange of Securities...... 53
Section 8.06. Trustee to Sign Amendments, etc............ 53
ARTICLE 9
MISCELLANEOUS
Section 9.01. TIA Controls............................... 54
Section 9.02. Notices.................................... 54
Section 9.03. Communication by Holders with Other Holders 55
Section 9.04. Certificate and Opinion as to Conditions
Precedent.................................. 55
Section 9.05. Statements Required in Certificate or
Opinion.................................... 55
Section 9.06. Rules by Trustee and Agents................ 56
Section 9.07. Legal Holidays............................. 56
Section 9.08. No Personal Liability of Directors,
Officer Employees Shareholders............. 56
Section 9.09. Duplicate Originals........................ 56
Section 9.10. Governing Law.............................. 57
Section 9.11. No Adverse Interpretation of Other
Agreements................................. 57
Section 9.12. Successors................................. 57
Section 9.13. Severability............................... 57
iii
Page
Section 9.14. Counterpart Originals...................... 57
Section 9.15. Table of Contents, Headings, etc........... 57
EXHIBITS
Exhibit A FORM OF SECURITY............................ A
Exhibit B FORM OF SUPPLEMENTAL INDENTURE.............. B
iv
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, between __________________ (the "Guarantor"), a subsidiary of
National Medical Enterprises, Inc. (or its successor), a Nevada corporation (the
"Company"), and The Bank of New York, as trustee under the indenture referred to
below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of March 1, 1995, providing for the
issuance of an aggregate principal amount of $300,000,000 of 9-5/8% Senior Notes
due 2002 (the "Securities");
WHEREAS, Section 3.16 of the Indenture provides that under certain
circumstances the Company is required to cause the Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guarantor
shall guarantee the payment of the Securities pursuant to a Guarantee on the
terms and conditions set forth herein; and
WHEREAS, pursuant to Section 8.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the holders of the Securities as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guarantor hereby unconditionally
guarantees to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of the Indenture, the Securities or the Obligations
of the Company hereunder and thereunder, that: (a) the principal of, premium, if
any, and interest on the Securities will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal, premium, if any, and (to the extent permitted by law)
interest on any interest on the Securities and all other payment Obligations of
the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Securities or
any of such other payment Obligations, that same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity,
B-1
by acceleration, redemption or otherwise. Failing payment when due of any
amount so guaranteed for whatever reason the Guarantor shall be obligated to pay
the same immediately. An Event of Default under the Indenture or the Securities
shall constitute an event of default under this Guarantee, and shall entitle the
Holders of Securities to accelerate the Obligations of the Guarantor hereunder
in the same manner and to the same extent as the Obligations of the Company.
The Guarantor hereby agrees that its Obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Guarantee will not be discharged except by complete
performance of the Obligations contained in the Securities and the Indenture.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company, the Guarantor, or any Custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or the Guarantor, any
amount paid by either to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
The Guarantor agrees that it shall not be entitled to, and hereby waives, any
right of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby. The Guarantor further agrees that, as between the Guarantor,
on one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the Obligations guaranteed hereby may be accelerated as provided in
Article 5 of the Indenture for the purposes of this Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Obligations as provided in Article 5 of the
Indenture, such Obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purpose of this Guarantee.
3. EXECUTION AND DELIVERY OF GUARANTEE. To evidence its Guarantee set
forth in Section 2, the Guarantor hereby agrees that a notation of such
Guarantee substantially in the form of EXHIBIT A shall be endorsed by an
officer of such Guarantor on each Security authenticated and delivered by the
Trustee and that this Supplemental Indenture shall be executed on behalf of such
Guarantor, by manual or facsimile signature, by its President or one of its Vice
Presidents.
The Guarantor hereby agrees that its Guarantee set forth in Section
2 shall remain in full force and effect notwithstanding any failure to endorse
on each Security a notation of such Guarantee.
If an Officer whose signature is on this Supplemental Indenture or
on the Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which a Guarantee is endorsed, the Guarantee shall
be valid nevertheless.
B-2
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of the Guarantors.
4. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Except as set forth in Articles 3 and 4 of the Indenture,
nothing contained in this Supplemental Indenture or in the Securities shall
prevent any consolidation or merger of the Guarantor with or into the Company or
any Subsidiary of the Company that has executed and delivered a supplemental
indenture substantially in the form hereof or shall prevent any sale or
conveyance of the property of the Guarantor as an entirety or substantially as
an entirety, to the Company or any such Subsidiary of the Company.
(b) Except as provided in Section 4(a) hereof or in a transaction
referred to in Section 5 hereof, the Guarantor shall not consolidate with or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to, another Person unless (1)
either (x) the Guarantor shall be the surviving Person of such merger or
consolidation or (y) the surviving Person or transferee is a corporation,
partnership or trust organized and existing under the laws of the United States,
any state thereof or the District of Columbia and such surviving Person or
transferee shall expressly assume all the obligations of the Guarantor under
this Guarantee and the Indenture pursuant to a supplemental indenture
substantially in the form hereof; (2) immediately after giving effect to such
transaction (including the incurrence of any Indebtedness incurred or
anticipated to be incurred in connection with such transaction) no Default or
Event of Default shall have occurred and be continuing; and (3) the Company has
delivered to the Trustee an Officers' Certificate and Opinion of Counsel, each
stating that such consolidation, merger or transfer complies with the Indenture,
that the surviving Person agrees to be bound thereby, and that all conditions
precedent in the Indenture relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of related transactions) of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Guarantor, the Capital Stock of which constitutes all or substantially all
of the properties and assets of the Guarantor, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Guarantor.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Guarantor in accordance with this Section 4(b) hereof, the successor
corporation shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the Guarantees to be
endorsed upon all of the Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee. All
Guarantees so issued shall in all respects have the same legal rank and benefit
under the Indenture as the Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Guarantees had
been issued at the date of the execution hereof.
B-3
5. RELEASES FOLLOWING SALE OF ASSETS. Concurrently with any sale,
lease, conveyance or other disposition (by merger, consolidation or otherwise)
of assets of the Guarantor (including, if applicable, disposition of all of the
Capital Stock of the Guarantor), any Liens in favor of the Trustee in the assets
sold, leased, conveyed or otherwise disposed of shall be released; PROVIDED
that in the event of an Asset Sale, such Asset Sale is effected, and the Net
Proceeds therefrom are applied, in accordance with Section 3.10 of the
Indenture. If the assets sold, leased, conveyed or otherwise disposed of (by
merger, consolidation or otherwise) include all or substantially all of the
assets of the Guarantor or all of the Capital Stock of the Guarantor in each
case, in compliance with the terms of the Indenture, then the Guarantor shall be
automatically and unconditionally released from and relieved of its Obligations
under its Guarantee; PROVIDED that in the event of an Asset Sale, such Asset
Sale is effected, and the Net Proceeds therefrom are applied, in accordance with
Section 3.10 of the Indenture. Upon delivery by the Company to the Trustee of
an Officers' Certificate to the effect that such sale, lease, conveyance or
other disposition was made by the Company in accordance with the provisions of
the Indenture, including without limitation of Section 3.10 thereof, if
applicable, the Trustee shall execute any documents reasonably required in order
to evidence the release of the Guarantor from its Obligations under its
Guarantee.
Nothing herein shall relieve the Company from its obligation to
apply the proceeds of any Asset Sale as provided in Section 3.10 of the
Indenture.
6. LIMITATION ON GUARANTOR LIABILITY. For purposes hereof, the
Guarantor's liability will be that amount from time to time equal to the
aggregate liability of the Guarantor hereunder, but shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Securities and the Indenture and (ii) the amount, if any, which would not have
(a) rendered the Guarantor "insolvent" (as such term is defined in the federal
Bankruptcy Law and in the Debtor and Creditor Law of the State of New York) or
(b) left it with unreasonably small capital at the time its Guarantee of the
Securities 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 the Guarantor is a party
that the amount guaranteed pursuant to its Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of the
Guarantor, or debtor in possession or trustee in bankruptcy of the Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (ii). In making any determination
as to the solvency or sufficiency of capital of the Guarantor in accordance with
the previous sentence, the right of the Guarantor to contribution from other
Subsidiaries of the Company that have executed and delivered a supplemental
indenture substantially in the form hereof and any other rights the Guarantor
may have, contractual or otherwise, shall be taken into account.
7. "TRUSTEE" TO INCLUDE PAYING AGENT. In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be
then acting under the Indenture, the term "Trustee" as used in this Supplemental
Indenture shall in each case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent within its meaning as
fully and for all intents and purposes as if such Paying Agent were named in
this Supplemental Indenture in place of the Trustee.
B-4
8. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantor under the Securities, any
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Securities by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
9. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
10. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
11. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: _________________ ___, ____
[Guarantor]
By: ______________________________
Name:
Title:
The Bank of New York,
as Trustee
By: ______________________________
Name:
Title:
B-5
EXHIBIT A TO SUPPLEMENTAL INDENTURE
GUARANTEE
The Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Securities or the Obligations of the Company to the Holders or
the Trustee under the Securities or under the Indenture, that: (a) the principal
of, and premium, if any, and interest on the Securities will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on overdue principal, premium, if any, and (to the extent permitted
by law) interest on any interest on the Securities and all other payment
Obligations of the Company to the Holders or the Trustee under the Indenture or
under the Securities will be promptly paid in full, all in accordance with the
terms thereof; and (b) in case of any extension of time of payment or renewal of
any Securities or any of such other payment Obligations, the same will be
promptly paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration, redemption or otherwise.
Failing payment when due of any amount so guaranteed, for whatever reason, the
Guarantor shall be obligated to pay the same immediately.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in a Supplemental Indenture, dated as of _________ __, ____ to the Indenture,
and reference is hereby made to the Indenture, as supplemented, for the precise
terms of this Guarantee.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon the Guarantor and its respective successors and
assigns to the extent set forth in the Indenture until full and final payment of
all of the Company's Obligations under the Securities and the Indenture and
shall inure to the benefit of the successors and assigns of the Trustee and the
Holders of Securities and, in the event of any transfer or assignment of rights
by any Holder of Securities or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This a
Guarantee of payment and not a guarantee of collection.
This Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized signatories.
For purposes hereof, the Guarantor's liability will be that amount
from time to time equal to the aggregate liability of the Guarantor hereunder,
but shall be limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Securities and the Indenture and (ii) the
amount, if any, which would not have (a) rendered the Guarantor "insolvent" (as
such term is defined in the federal Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (b) left it with unreasonably small
capital at the time its Guarantee of the Securities was entered into, after
giving effect to the incurrence of existing
B-6
Indebtedness immediately prior to such time; PROVIDED that it shall be a
presumption in any lawsuit or other proceeding in which the Guarantor is a party
that the amount guaranteed pursuant to its Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of the
Guarantor, or debtor in possession or trustee in bankruptcy of the Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (ii). The Indenture provides that,
in making any determination as to the solvency or sufficiency of capital of a
Guarantor in accordance with the previous sentence, the right of the Guarantor
to contribution from other Subsidiaries of the Company that have become
Guarantors and any other rights the Guarantor may have, contractual or
otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
[GUARANTOR]
By:_________________________
Name:
Title:
B-7