DRAFT
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TENET HEALTHCARE CORPORATION
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$300,000,000
__% SENIOR NOTES due 2003
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INDENTURE
Dated as of October __, 1995
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THE BANK OF NEW YORK
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as Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions . . . . . . . . . . . . . . . 3
Section 1.02. Other Definitions . . . . . . . . . . . . 17
Section 1.03. Incorporation by Reference of TIA . . . . 17
Section 1.04. Rules of Construction . . . . . . . . . . 18
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
Section 2.01. Form and Dating . . . . . . . . . . . . . 18
Section 2.02. Execution and Authentication. . . . . . . 19
Section 2.03. Registrar and Paying Agent. . . . . . . . 19
Section 2.04. Paying Agent to Hold Money in Trust . . . 20
Section 2.05. Holder Lists. . . . . . . . . . . . . . . 20
Section 2.06. Transfer and Exchange . . . . . . . . . . 21
Section 2.07. Replacement Securities. . . . . . . . . . 21
Section 2.08. Outstanding Securities. . . . . . . . . . 22
Section 2.09. Treasury Securities . . . . . . . . . . . 22
Section 2.10. Temporary Securities. . . . . . . . . . . 22
Section 2.11. Cancellation. . . . . . . . . . . . . . . 23
Section 2.12. Defaulted Interest. . . . . . . . . . . . 23
Section 2.13. Record Date . . . . . . . . . . . . . . . 23
Section 2.14. CUSIP Number. . . . . . . . . . . . . . . 23
Section 2.15. Offer to Purchase By Application of
Excess Proceeds . . . . . . . . . . . . . 24
ARTICLE 3
COVENANTS
Section 3.01. Payment of Securities . . . . . . . . . . 26
Section 3.02. Maintenance of Office or Agency . . . . . 27
Section 3.03. Commission Reports. . . . . . . . . . . . 28
Section 3.04. Compliance Certificate. . . . . . . . . . 29
Section 3.05. Taxes . . . . . . . . . . . . . . . . . . 30
Section 3.06. Stay, Extension and Usury Laws. . . . . . 30
Section 3.07. Limitations on Restricted Payments. . . . 30
Section 3.08. Limitations on Dividend and Other
Payment Restrictions Affecting
Subsidiaries. . . . . . . . . . . . . . . 33
Section 3.09. Limitations on Incurrence of
Indebtedness and Issuance of Preferred
Stock . . . . . . . . . . . . . . . . . . 34
Section 3.10. Asset Sales . . . . . . . . . . . . . . . 37
i
Section 3.11. Limitations on Transactions with
Affiliates . . . . . . . . . . . . . . . 38
Section 3.12. Limitations on Liens. . . . . . . . . . . 39
Section 3.13. Change of Control . . . . . . . . . . . . 39
Section 3.14. Corporate Existence . . . . . . . . . . . 41
Section 3.15. Line of Business. . . . . . . . . . . . . 42
Section 3.16. Limitations on Issuances of Guarantees
of Indebtedness by Subsidiaries . . . . . 42
ARTICLE 4
SUCCESSORS
Section 4.01. Limitations On Mergers, Consolidations
or Sales of Assets. . . . . . . . . . . . 42
Section 4.02. Successor Corporation Substituted . . . . 43
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.01. Events of Default . . . . . . . . . . . . 44
Section 5.02. Acceleration. . . . . . . . . . . . . . . 46
Section 5.03. Other Remedies. . . . . . . . . . . . . . 47
Section 5.04. Waiver of Past Defaults . . . . . . . . . 47
Section 5.05. Control by Majority . . . . . . . . . . . 48
Section 5.06. Limitation on Suits . . . . . . . . . . . 48
Section 5.07. Rights of Holders to Receive Payment. . . 49
Section 5.08. Collection Suit by Trustee. . . . . . . . 49
Section 5.09. Trustee May File Proofs of Claim. . . . . 49
Section 5.10. Priorities. . . . . . . . . . . . . . . . 50
Section 5.11. Undertaking for Costs . . . . . . . . . . 50
ARTICLE 6
TRUSTEE
Section 6.01. Duties of Trustee . . . . . . . . . . . . 51
Section 6.02. Rights of Trustee . . . . . . . . . . . . 52
Section 6.03. Individual Rights of Trustee. . . . . . . 53
Section 6.04. Trustee's Disclaimer. . . . . . . . . . . 53
Section 6.05. Notice of Defaults. . . . . . . . . . . . 53
Section 6.06. Reports by Trustee to Holders . . . . . . 53
Section 6.07. Compensation and Indemnity. . . . . . . . 54
Section 6.08. Replacement of Trustee. . . . . . . . . . 55
Section 6.09. Successor Trustee or Agent by Merger,
etc. . . . . . . . . . . . . . . . . . . 56
Section 6.10. Eligibility; Disqualification . . . . . . 56
Section 6.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . 56
ARTICLE 7
DISCHARGE OF INDENTURE
Section 7.01. Defeasance and Discharge of this
Indenture and the Securities. . . . . . . 56
Section 7.02. Legal Defeasance and Discharge. . . . . . 57
ii
Section 7.03. Covenant Defeasance . . . . . . . . . . . 57
Section 7.04. Conditions to Legal or Covenant
Defeasance . . . . . . . . . . . . . . . 58
Section 7.05. Deposited Money and Government
Securities to be Held in Trust; Other
Miscellaneous Provisions. . . . . . . . . 60
Section 7.06. Repayment to Company. . . . . . . . . . . 60
Section 7.07. Reinstatement . . . . . . . . . . . . . . 61
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
Section 8.01. Without Consent of Holders. . . . . . . . 61
Section 8.02. With Consent of Holders . . . . . . . . . 62
Section 8.03. Compliance with TIA . . . . . . . . . . . 63
Section 8.04. Revocation and Effect of Consents . . . . 64
Section 8.05. Notation on or Exchange of Securities . . 64
Section 8.06. Trustee to Sign Amendments, etc . . . . . 64
ARTICLE 9
MISCELLANEOUS
Section 9.01. TIA Controls. . . . . . . . . . . . . . . 65
Section 9.02. Notices . . . . . . . . . . . . . . . . . 65
Section 9.03. Communication by Holders with Other
Holders. . . . . . . . . . . . . . . . . 66
Section 9.04. Certificate and Opinion as to
Conditions Precedent. . . . . . . . . . . 66
Section 9.05. Statements Required in Certificate or
Opinion. . . . . . . . . . . . . . . . . 67
Section 9.06. Rules by Trustee and Agents . . . . . . . 67
Section 9.07. Legal Holidays. . . . . . . . . . . . . . 67
Section 9.08. No Personal Liability of Directors,
Officers, Employees and Shareholders. . . 67
Section 9.09. Duplicate Originals . . . . . . . . . . . 68
Section 9.10. Governing Law . . . . . . . . . . . . . . 68
Section 9.11. No Adverse Interpretation of Other
Agreements. . . . . . . . . . . . . . . . 68
Section 9.12. Successors. . . . . . . . . . . . . . . . 68
Section 9.13. Severability. . . . . . . . . . . . . . . 68
Section 9.14. Counterpart Originals . . . . . . . . . . 68
Section 9.15. Table of Contents, Headings, etc. . . . . 69
EXHIBITS
Exhibit A FORM OF SECURITY. . . . . . . . . . . . . A
Exhibit B FORM OF SUPPLEMENTAL INDENTURE. . . . . . B
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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.
1
(c) . . . . . . . . . . . . . . . . . . 9.01
<FN>
N.A. means not applicable.
____________________________
*THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
2
INDENTURE dated as of October __, 1995 between Tenet Healthcare Corporation,
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 __% Senior
Notes due 2003 (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
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$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.
4
"COMPANY" means Tenet Healthcare Corporation, as obligor under the
Securities, unless and until a successor replaces Tenet Healthcare
Corporation, 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 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
5
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 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.
"CREDIT AGREEMENT" 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.
"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
December 1, 2003.
6
"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 Credit Agreement 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 Credit
Agreement).
"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.
"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
7
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 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
8
(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 any of its 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.
9
"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.
"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 or payable prior to its stated maturity
(except any such provisions set forth in Existing Indebtedness until the same
is repaid or refinanced).
10
"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 Credit Agreement 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 March 1, 1995;
(ii) Liens on Permitted Collateral securing Senior Revolving Debt and letters
of credit of the Company incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding (with letters of credit
being deemed to have a principal amount equal to the maximum potential
reimbursement obligation of the Company 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 March 1,
1995; (iii) Liens in favor of the Company; (iv) Liens on property of a Person
existing at the time such Person is merged into or
11
consolidated with the Company or any Subsidiary of the Company or becomes a
Subsidiary of the Company; PROVIDED that such Liens were in existence prior
to the contemplation of such merger, consolidation or acquisition and do not
extend to any assets other than those of the Person merged into or
consolidated with the Company or that becomes a Subsidiary of the Company;
(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
12
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).
"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
13
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
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 Company's 9 5/8% Senior Notes due 2002 and
the Senior Subordinated Notes.
"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.
14
"SENIOR REVOLVING DEBT" means revolving credit loans outstanding from
time to time under the Credit Agreement.
"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 NOTES 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 Credit Agreement.
"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.
"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
15
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 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.
16
"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
"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;
17
"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.
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.
18
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 addi-tional paying agent. The
Company may change any 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
19
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 Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may 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).
20
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 transactions 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.
21
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.
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
22
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 cancella-tion 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 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
permitted under this Indenture shall be determined as provided for in TIA
Section 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.
23
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 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
24
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 only Securities in
denominations of $1,000, or
integral multiples thereof, shall
be purchased);
25
(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.
26
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 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.
27
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 of TIA Section 314(a). Notwithstanding that the Company may
not be subject to 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 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.
28
(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 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.
29
(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 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
30
(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 March 1, 1995, 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 March 1,
1995 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 March
1, 1995 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.
31
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;
32
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)
an offer to purchase or redeem the
Senior Subordinated Notes in
accordance with the provisions of
the Senior Subordinated Notes
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 Notes Indenture.
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
33
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 Credit Agreement 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 Transfer
Restrictions than the Credit Agreement
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
34
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 Credit
Agreement 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 March 1, 1995;
(b) the incurrence by the Company of Senior
Revolving Debt and letters of credit
pursuant to the Credit Agreement in an
aggregate principal amount at any time
outstanding (with letters of credit
being deemed to have a principal amount
equal to the maximum potential
reimbursement obligation of the Company
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 after March 1, 1995;
(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;
(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);
35
(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
36
(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.
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
37
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 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. 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
38
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.
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
39
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
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
40
$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.
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 organ-izational 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
41
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.
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
42
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 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.
43
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
44
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, 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,
45
(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.
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
46
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 October __ 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 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
47
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;
(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.
48
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 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 reorgan-ization 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
49
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.
50
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
51
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.
(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.
52
(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.
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 dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted).
The Trustee also shall comply with TIA Section 313(b). The Trustee shall
also transmit by mail all reports as required by TIA Section 313(c).
53
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.
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
54
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 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
55
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
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject
to 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 relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE 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
56
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
57
in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default
under Section 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
58
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.
(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
59
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 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
60
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.
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
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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).
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.
62
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.
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.
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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.
64
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:
Tenet Healthcare Corporation
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
65
hand, if personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight 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
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 9.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the 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.
66
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;
(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
67
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.
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.
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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.
69
SIGNATURES
Dated as of _______________ TENET HEALTHCARE CORPORATION
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)
70
EXHIBIT A
(Face of Security)
__% Senior Note
due December 1, 2003
CUSIP:
No. $____________
TENET HEALTHCARE CORPORATION
promises to pay to
______________________________________________________________
or its registered assigns, the principal sum of_______________
Dollars on December 1, 2003.
Interest Payment Dates: June 1 and December 1, commencing December 1, 1995
Record Dates: May 15 and November 15 (whether or not a Business Day).
TENET HEALTHCARE CORPORATION
By: _________________________
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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
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(Back of Security)
__% SENIOR NOTE
due December 1, 2003
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Tenet Healthcare Corporation, 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 __%. The Company shall pay interest
semiannually in arrears on June 1 and December 1 of each year, commencing
December 1, 1995 to Holders of record on the immediately preceding May 15 and
November 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.
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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.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of October __, 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
A-4
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 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. 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
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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 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.
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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 limitations, Holders
of a majority in principal amount of the 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
A-7
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.
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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 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 Inden-ture. Request may be made to:
Tenet Healthcare Corporation
2700 Colorado Avenue
Santa Monica, California 90404
Attention: Treasurer
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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).
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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).
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EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, between __________________ (the "Guarantor"), a subsidiary
of Tenet Healthcare Corporation (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 E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of October __, 1995,
providing for the issuance of an aggregate principal amount of $300,000,000
of __% Senior Notes due 2003 (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, 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
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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.
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
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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.
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.
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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.
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.
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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:
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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.
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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). 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:
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