Exhibit 4.1
Draft of August 8, 1996
____________________________________________________________
PARACELSUS HEALTHCARE CORPORATION
AND
AMSOUTH BANK OF ALABAMA
Trustee
________________
Indenture
Dated as of August __, 1996
________________
$325,000,000
____% Senior Subordinated Notes due 2006
____________________________________________________________
Paracelsus Healthcare Corporation
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of August __, 1996
Trust Indenture Indenture
ACT Section Section
- --------------- ----------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . 608
. . . . . . . . . . . . . . . . . . . . . 610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(e) . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . 601
603(a)
(b) . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a)(1)(A). . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . Not
-i-
Applicable
(b) . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . 104
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . 107
______________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
-ii-
TABLE OF CONTENTS
PAGE
----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquired Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate Transaction. . . . . . . . . . . . . . . . . . . . . . . 2
Asset Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Asset Sale Offer . . . . . . . . . . . . . . . . . . . . . . . . . 2
Attributable Indebtedness. . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Calculation Date . . . . . . . . . . . . . . . . . . . . . . . . . 3
Capital Lease Obligation . . . . . . . . . . . . . . . . . . . . . 3
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Champion Investors Registration Rights Agreement . . . . . . . . . 3
Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . 3
Change of Control Offer. . . . . . . . . . . . . . . . . . . . . . 4
Change of Control Payment. . . . . . . . . . . . . . . . . . . . . 4
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request; Company Order . . . . . . . . . . . . . . . . . . 4
Consolidated Cash Flow . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Interest Expense. . . . . . . . . . . . . . . . . . . 4
Consolidated Net Income. . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . 5
Continuing Directors . . . . . . . . . . . . . . . . . . . . . . . 5
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . 6
corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Designated Senior Indebtedness . . . . . . . . . . . . . . . . . . 6
Disqualified Stock . . . . . . . . . . . . . . . . . . . . . . . . 6
Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-iii-
PAGE
----
Dividend and Note Agreement. . . . . . . . . . . . . . . . . . . . 6
Equity Interests . . . . . . . . . . . . . . . . . . . . . . . . . 6
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 6
Excess Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Existing Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 7
Existing Paracelsus Credit Facility. . . . . . . . . . . . . . . . 7
Existing Senior Subordinated Notes . . . . . . . . . . . . . . . . 7
Fixed Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Government Securities. . . . . . . . . . . . . . . . . . . . . . . 7
Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Hedging Obligations. . . . . . . . . . . . . . . . . . . . . . . . 7
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
incur. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Insurance Agreement. . . . . . . . . . . . . . . . . . . . . . . . 8
Interest Payment Date. . . . . . . . . . . . . . . . . . . . . . . 8
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Merger Related Agreement . . . . . . . . . . . . . . . . . . . . . 9
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Net Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
New Credit Facility. . . . . . . . . . . . . . . . . . . . . . . . 9
Non-Compete Agreement. . . . . . . . . . . . . . . . . . . . . . . 9
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . 10
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 10
Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Paracelsus Shareholder . . . . . . . . . . . . . . . . . . . . . . 10
Paracelsus Shareholder Registration Rights Agreement . . . . . . . 11
pari passu . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Payment Blockage Period. . . . . . . . . . . . . . . . . . . . . . 11
Permitted Business . . . . . . . . . . . . . . . . . . . . . . . . 11
Permitted Holder . . . . . . . . . . . . . . . . . . . . . . . . . 11
Permitted Joint Venture. . . . . . . . . . . . . . . . . . . . . . 11
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Permitted Refinancing Indebtedness . . . . . . . . . . . . . . . . 12
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-iv-
PAGE
----
Physician Support Obligation . . . . . . . . . . . . . . . . . . . 12
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . 12
Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Pro Forma Coverage Ratio . . . . . . . . . . . . . . . . . . . . . 12
Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Purchase Money Indebtedness. . . . . . . . . . . . . . . . . . . . 13
Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . 13
Regular Record Date. . . . . . . . . . . . . . . . . . . . . . . . 14
Related Business . . . . . . . . . . . . . . . . . . . . . . . . . 14
Related Party. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . 14
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Securities Payment . . . . . . . . . . . . . . . . . . . . . . . . 14
Security Register, Security Registrar. . . . . . . . . . . . . . . 14
Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 14
Senior Nonmonetary Default . . . . . . . . . . . . . . . . . . . . 15
Senior Payment Default . . . . . . . . . . . . . . . . . . . . . . 15
Services Agreement . . . . . . . . . . . . . . . . . . . . . . . . 15
Settlement Costs . . . . . . . . . . . . . . . . . . . . . . . . . 15
Shareholder Agreement. . . . . . . . . . . . . . . . . . . . . . . 15
Shareholder Subordinated Note. . . . . . . . . . . . . . . . . . . 15
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . 15
Special Record Date. . . . . . . . . . . . . . . . . . . . . . . . 15
Stated Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . 16
U.S. Government Obligations. . . . . . . . . . . . . . . . . . . . 16
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Weighted Average Life to Maturity. . . . . . . . . . . . . . . . . 16
Wholly Owned Subsidiary. . . . . . . . . . . . . . . . . . . . . . 16
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . 16
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . 17
SECTION 104. Acts of Holders; Record Date . . . . . . . . . . . . . . 17
SECTION 105. Notices, Etc., to Trustee and Company. . . . . . . . . . 20
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . 20
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . . . 21
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . 21
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . 21
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . 21
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . 21
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . 22
-v-
PAGE
----
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . 22
SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . . 22
SECTION 203. Form of Reverse of Security. . . . . . . . . . . . . . . 24
SECTION 204. Form of Trustee's Certificate of Authentication. . . . . 27
ARTICLE THREE
The Securities
SECTION 301. Title and Terms. . . . . . . . . . . . . . . . . . . . . 28
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . 28
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . 29
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . 29
SECTION 305. Registration, Registration of Transfer and Exchange. . . 30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . 31
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . 31
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . 33
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 310. Computation of Interest. . . . . . . . . . . . . . . . . 33
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . 33
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . 35
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . 35
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . 37
-vi-
PAGE
----
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . 39
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . 39
SECTION 506. Application of Money Collected . . . . . . . . . . . . . 40
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . 40
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . 41
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . 41
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . 41
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . 42
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . 42
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . 42
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . 43
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . 43
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . 44
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . 44
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . 44
SECTION 604. Not Responsible for Recitals or Issuance of Securities . 45
SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . 45
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . 46
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . 46
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . 46
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . 46
SECTION 610. Resignation and Removal; Appointment of Successor. . . . 47
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . 48
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . 49
SECTION 613. Preferential Collection of Claims Against Company. . . . 49
SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . 49
-vii-
PAGE
----
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 702. Preservation of Information; Communications to Holders . 51
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . 52
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . 52
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc. and Purchases of Assets
Only on Certain Terms . . . . . . . . . . . . . . . 52
SECTION 802. Successor Substituted. . . . . . . . . . . . . . . . . . 53
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders . . . 54
SECTION 902. Supplemental Indentures and Waivers with Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . 56
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . 56
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . 56
SECTION 906. Reference in Securities to Supplemental Indentures . . . 56
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . 57
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . . 57
SECTION 1003. Money for Security Payments to be Held in Trust. . . . . 57
SECTION 1004. Existence. . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1005. Maintenance of Properties. . . . . . . . . . . . . . . . 59
SECTION 1006. Payment of Taxes and Other Claims. . . . . . . . . . . . 59
SECTION 1007. Maintenance of Insurance . . . . . . . . . . . . . . . . 59
SECTION 1008. Limitations on Incurrence of Indebtedness. . . . . . . . 60
-viii-
PAGE
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SECTION 1009. Limitations on Restricted Payments . . . . . . . . . . . 61
SECTION 1010. Limitations On Dividend and Other Payment Restrictions
Affecting Subsidiaries. . . . . . . . . . . . . . . 64
SECTION 1011. Limitations on Liens . . . . . . . . . . . . . . . . . . 65
SECTION 1012. Limitations on Disposition of Assets . . . . . . . . . . 65
SECTION 1013. Limitations on Transactions with Affiliates. . . . . . . 67
SECTION 1014. Limitations on Other Subordinated Indebtedness . . . . . 68
SECTION 1015. Change of Control. . . . . . . . . . . . . . . . . . . . 68
SECTION 1016. Limitation on Conduct of Business. . . . . . . . . . . . 69
SECTION 1017. Reports. . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1018. Statement by Officers as to Default; Compliance
Certificates. . . . . . . . . . . . . . . . . . . . 69
SECTION 1019. Waiver of Certain Covenants. . . . . . . . . . . . . . . 70
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption. . . . . . . . . . . . . . . . . . . 70
SECTION 1102. Applicability of Article . . . . . . . . . . . . . . . . 71
SECTION 1103. Election to Redeem; Notice to Trustee. . . . . . . . . . 71
SECTION 1104. Selection by Trustee of Securities to Be Redeemed. . . . 71
SECTION 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . 72
SECTION 1106. Deposit of Redemption Price. . . . . . . . . . . . . . . 73
SECTION 1107. Securities Payable on Redemption Date. . . . . . . . . . 73
SECTION 1108. Securities Redeemed in Part. . . . . . . . . . . . . . . 74
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinate to Senior Indebtedness. . . . . . 74
SECTION 1202. No Payment on Securities in Certain Circumstances. . . . 74
SECTION 1203. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization. . . . . . . . . . . . . . . . . . . 75
SECTION 1204. Payment Permitted If No Default. . . . . . . . . . . . . 76
SECTION 1205. Subrogation to Rights of Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1206. Provisions Solely to Define Relative Rights. . . . . . . 77
SECTION 1207. Trustee to Effectuate Subordination. . . . . . . . . . . 78
SECTION 1208. No Waiver of Subordination Provisions. . . . . . . . . . 78
SECTION 1209. Notice to Trustee. . . . . . . . . . . . . . . . . . . . 78
-ix-
PAGE
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SECTION 1210. Reliance on Judicial Order or Certificate of
Liquidating Agent . . . . . . . . . . . . . . . . . 79
SECTION 1211. Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 1212. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights . . . . . . . . . . . . 80
SECTION 1213. Article Applicable to Paying Agents. . . . . . . . . . . 80
SECTION 1214. Defeasance of this Article Twelve. . . . . . . . . . . . 80
SECTION 1215. This Article Not To Prevent Events of Default. . . . . . 80
SECTION 1216. Representative of Senior Indebtedness. . . . . . . . . . 81
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . . . . 81
SECTION 1302. Defeasance and Discharge . . . . . . . . . . . . . . . . 81
SECTION 1303. Covenant Defeasance. . . . . . . . . . . . . . . . . . . 81
SECTION 1304. Conditions to Defeasance or Covenant Defeasance. . . . . 82
SECTION 1305. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions . . . 84
SECTION 1306. Reinstatement. . . . . . . . . . . . . . . . . . . . . . 84
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
-x-
INDENTURE, dated as of August __, 1996, between Paracelsus Healthcare
Corporation, a corporation duly organized and existing under the laws of the
State of California (herein called the "Company"), having its principal office
at 515 W. Greens Road, Suite 800, Houston, Texas 77067, and AmSouth Bank of
Alabama, a ________ corporation duly organized and existing under the laws of
____________, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its ___%
Senior Subordinated Notes due 2006 of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles (whether or not such is indicated herein), and,
except as otherwise herein expressly provided, the term "generally
accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted as consistently
applied by the Company at the date of such computation;
(4) unless otherwise specifically set forth herein, all
calculations or determinations of a Person shall be performed or made
on a consolidated basis in accordance with generally accepted
accounting principles; and
(5) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Acquired Indebtedness" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person
merges with or into or becomes a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person;
(ii) Indebtedness incurred or created by the Company or any of its Subsidiaries
in connection with the transaction or series of transactions pursuant to which
such Person became a Subsidiary of the Company; and (iii) Indebtedness incurred
or created by the Company or any of its Subsidiaries in connection with the
acquisition of substantially all of the assets of an operating unit or business
of another 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.
"Affiliate Transaction" has the meaning specified in Section 1014.
"Asset Sale" has the meaning specified in Section 1008.
"Asset Sale Offer" has the meaning specified in Section 1008.
"Attributable Indebtedness" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the interest rate implicit in the lease, compounded, semiannually) of the
obligation of the lessee of the property subject to such sale-leaseback
transaction for rental payments during the remaining term of the lease included
in such transaction including any period for which such lease has been extended
or may, at the option of the lessor, be extended or until the earliest date on
which the lessee may
-2-
terminate such lease without penalty or upon payment or penalty (in which
case the rental payments shall include such penalty), after excluding all
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water, utilities and similar charges.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New York,
New York are authorized or obligated by law or executive order to close.
"Calculation Date" means, when used with respect to any calculation,
the date of the transaction giving rise to the need to make such calculation.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the discounted present value of the rental obligations of
any person under any lease of any property that would at such time be so
required to be capitalized on the balance sheet of such person 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 (other than convertible or
exchangeable Indebtedness) 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.
"Champion Investors Registration Rights Agreement" means each of the
registration rights agreements, dated August ___, 1996, by and among the Company
and certain holders of shares of, or warrants to acquire shares of, the
Company's common stock, no par value per share.
"Change of Control" means the occurrence of any of the following: (i)
any sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation) in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as defined in Section 13(d)(3) of the Exchange Act) or
"group" (as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act);
(ii) the adoption of a plan for the liquidation or dissolution of the Company;
-3-
(iii) the acquisition by any person or group (as defined above) (other than a
Permitted Holder) of a majority of the total voting power entitled to vote
generally in the election of directors of the Company; or (iv) 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 Offer" has the meaning specified in Section 1015.
"Change of Control Payment" has the meaning specified in Section 1015.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" means the Company's common stock, no stated par value
per share.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President or a Vice President, and by its Chief Financial
Officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (a) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing
Consolidated Net Income), plus (b) provision for taxes based on income or
profits to the extent such provision for taxes was deducted in computing
Consolidated Net Income, plus (c) Consolidated Interest Expense of such Person
for such period, to the extent such expense was deducted in computing
Consolidated Net Income, plus (d) depreciation and amortization (including
amortization of goodwill and other intangibles and other non-cash charges of
such Person for such period to the extent such depreciation and amortization
were deducted in computing Consolidated Net Income, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the interest expense of such Person and its Subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP (including
amortization of original issue discount and deferred financing costs (other than
deferred financing costs that are accelerated upon the redemption, repurchase or
prepayment of any Indebtedness and except as set forth in the proviso to this
definition), non-cash interest payments, the interest component of all payments
associated with all Capital Lease Obligations and net payments, if any, pursuant
to Hedging Obligations; PROVIDED, HOWEVER, that in no event shall any
amortization of deferred financing cost incurred in connection with the New
Credit Facility or any
-4-
amortization of deferred financing costs incurred in connection with the
issuance of the Securities be included in Consolidated Interest Expense).
"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,
excluding expenses or any one-time charges incurred or recorded prior to
December 31, 1996, to effect, or in connection with (i) the Merger (including
Settlement Costs incurred by the Company), (ii) the public offerings of the
Securities and the common stock of the Company consummated in August 1996,
(iii) the refinancing and replacement of the Existing Credit Facility with the
New Credit Facility; (iv) interest paid on the unpaid Dividend for up to 60
days; and (v) reflecting the refinancing and replacement of Existing
Indebtedness with the Securities and/or common stock of the Company; PROVIDED,
HOWEVER, that (i) the Net Income (but not loss) 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 Subsidiary thereof; (ii) except to the extent
dividends or distributions actually paid were included pursuant to the foregoing
clause (i), the Net Income of any person accrued prior to the date it becomes a
Subsidiary of such person or any of its Subsidiaries or that person's assets are
acquired by such person or any of its Subsidiaries shall be excluded; (iii) 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 government approval (which 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; 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 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 assets of a going concern business made in accordance with GAAP as a result
of the acquisition of such business) subsequent to the date of the Indenture in
the book value of any asset owned by such Person or a 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 of the Indenture or (ii) was nominated for
election or elected to such Board of Directors either pursuant to the
Shareholders Agreement or with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
-5-
"Corporate Trust Office" means the principal office of the Trustee in
_____________ at which at any particular time its corporate trust business shall
be administered.
"corporation" means a corporation, association, company, joint-stock
company, partnership or business trust.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Designated Senior Indebtedness" means (i) so long as the Company has
any Obligation under the New Credit Facility, the New Credit Facility and (ii)
any other Senior Indebtedness of the Company permitted under the Indenture and
which at the time of determination has an aggregate amount outstanding of at
least $10.0 million and is specifically designated in the instrument creating or
evidencing such Senior Indebtedness as "Designated Senior Indebtedness."
"Disqualified Stock" means any Capital Stock which, 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 required to be
redeemed, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final Stated Maturity of the Securities.
"Dividend" means the dividend declared by the Board of Directors on
__________, 1996 in the amount of approximately $21.1 million, plus $3,574 for
each day from and including July 31, 1996 to the date the dividend is paid,
payable to the Paracelsus Shareholder.
"Dividend and Note Agreement" means the dividend and note agreement
dated August ___, 1996 by and between the Paracelsus Shareholder and the
Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock or securities convertible into Capital
Stock (but excluding any debt security that is convertible into, or exchangeable
for Capital Stock).
"Event of Default" has the meaning specified in Section 501.
"Excess Proceeds" has the meaning specified in Section 1012.
"Exchange Act" refers to the Securities Exchange Act of 1934 as it may
be amended and any successor act thereto.
-6-
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date of original issuance of the Securities after giving effect
to the application of the proceeds from the sale thereof as shown on Schedule I
hereto until such amounts are repaid.
"Existing Paracelsus Credit Facility" means the agreement dated as of
December 8, 1995 by and among the Company, Bank of America National Trust and
Savings Association, as Lead Agent, NationsBank of Texas, N.A., as Co-Agent, and
the other lenders named therein.
"Existing Senior Subordinated Notes" means the Company's 9 7/8% Senior
Subordinated Notes due 2003 issued pursuant to the indenture, dated as of
October 15, 1993, between the Company and The Bank of New York, as successor to
NationsBank of Tennessee, N.A., as trustee.
"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; (ii) any interest expense on Indebtedness of another Person
that is Guaranteed by the referent 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 (iii) 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 (other than
preferred stock which is considered Indebtedness), 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 may be approved by a significant segment of the accounting
profession of the United States, which are 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, interest rate floor agreements and interest rate collar
agreements and (ii) other agreements or arrangements designed to protect such
person against fluctuations in interest rates.
-7-
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Hospital" means a hospital, outpatient clinic, long-term care
facility, hospice, psychiatric facility or other facility that is used or useful
in the provision of healthcare services or a Related Business.
"incur" has the meaning specified in Section 1008.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such person for borrowed money; (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments;
(iii) all obligations of such person to pay the deferred price of property
required to be accrued on the balance sheet of such person, except accounts
payable arising in the ordinary course of business; (iv) all Capital Lease
Obligations of such person; (v) all Indebtedness of others secured by a Lien on
any asset of such person, whether or not such Indebtedness is assumed by such
person (the amount of such obligation being deemed to be the lesser of the value
of the property or assets or the amount of the obligation so secured); (vi) all
Indebtedness of others Guaranteed by such person; (vii) all obligations of such
person to reimburse the issuer of any letter of credit; (viii) Attributable
Indebtedness of such person; (ix) preferred stock issued by a Subsidiary of such
person; (x) Disqualified Stock; and (xi) Hedging Obligations; PROVIDED, HOWEVER,
that "Indebtedness" does not include any obligations pursuant to receivables
financing which are not required under GAAP to be booked as liabilities on the
balance sheet of such Person.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Insurance Agreement" means the insurance agreement, dated as of
July __, 1996, by and between the Company and Dr. Manfred George Krukemeyer.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees, made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell
-8-
or give a security interest and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Merger Related Agreement" means each of the Dividend and Note
Agreement, the Shareholder Note, the Shareholder Agreement, the Paracelsus
Shareholder Registration Rights Agreement, the Champion Investors Registration
Rights Agreement, the Services Agreement, the Insurance Agreement and the Non-
Compete Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP excluding, however, any
amount representing the amortization of goodwill or other intangible assets
arising from acquisitions subsequent to the date of the Indenture and excluding
any gain (but not loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with any Assets Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions),
and excluding any extraordinary or non-recurring gain (but not loss), together
with any related provision for taxes on such extraordinary 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
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 relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, amounts
required to be applied to the repayment of Indebtedness (other than Senior
Indebtedness) secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"New Credit Facility" means the agreement dated as of August ___, 1996
by and among the Company, Bank of America National Trust and Savings
Association, as Administrative Agent, Banque Paribas, as Documentation Agent,
and NationsBank of Texas, N.A., as Managing Agent, and the other lenders named
therein.
"Non-Compete Agreement" means the non-compete agreement dated
August ___, 1996 by and between the Company and Dr. Manfred George Krukemeyer.
"Obligations" means any principal, interest, penalties, fees,
expenses, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
-9-
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President or a Vice President, and
by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trustee or Company, including an employee of the Company, and
who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; PROVIDED that,
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor. Secondary Securities
shall be deemed Outstanding commencing as of the Interest Payment Date with
respect to which they are authenticated and delivered in lieu of cash interest.
"Paracelsus Shareholder" means Park Hospital GmbH.
-10-
"Paracelsus Shareholder Registration Rights Agreement" means the
registration rights agreement dated August ___, 1996 by and between the
Paracelsus Shareholder and the Company.
"PARI PASSU", when used with respect to the ranking of any
Indebtedness of any Person in relation to other Indebtedness of such Person,
means that each such Indebtedness (a) either (i) is not subordinated in right of
payment to any other Indebtedness of such Person or (ii) is subordinate in right
of payment to the same Indebtedness of such Person as is the other and is so
subordinate to the same extent and (b) is not subordinate in right of payment to
the other or to any Indebtedness of such Person as to which the other is not so
subordinate.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Payment Blockage Period" has the meaning specified in Section 1203.
"Permitted Business" means the ownership, leasing, operation or
management of Hospitals and Related Businesses.
"Permitted Holder" means any of the Principal, a Related Party of the
Principal and any person employed in the Company in a management capacity on the
date of this Indenture.
"Permitted Joint Venture" means a Person (i) which owns, leases,
operates or services a Hospital or Related Business or manufactures or markets
healthcare products and (ii) of which the Company or any Subsidiary of the
Company owns a 30% or greater equity interest.
"Permitted Liens" means (i) Liens in favor of the Company; (ii) Liens
on property of a Person existing at the time such Person either is merged into
or consolidated with the Company or any Subsidiary of the Company or becomes a
Subsidiary of the Company, PROVIDED, that such Liens (x) were not incurred in
connection with, or in contemplation of, such merger, consolidation or becoming
a Subsidiary and (y) do not extend to any assets other than those of the Person
merged into or consolidated with the Company or such Subsidiary; (iii) Liens on
property existing at the time of acquisition thereof by the Company or any
Subsidiary of the Company; PROVIDED that such Liens were not incurred in
connection with, or in contemplation of, such acquisition and do not extend to
any assets of the Company or any of its Subsidiaries other than the property so
acquired; (iv) Liens to secure Existing Indebtedness; (v) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of like nature incurred in the ordinary course of business;
and (vi) Liens securing Indebtedness incurred to refinance Indebtedness that has
been secured by a Lien permitted under the Indenture; PROVIDED that (a) any such
Lien shall not extend to or cover any assets or property not securing the
Indebtedness so refinanced and (b) the refinancing Indebtedness secured by such
Lien shall have been permitted to be incurred under Section 1008.
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"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 to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; PROVIDED that: (i) the
principal amount (or accrued value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accrued value, if
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of any prepayment premiums and any other
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date on or after 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; and (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 is subordinated in right of payment to, the Securities
on terms at least as favorable to the Holders of Securities as those contained
in the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"PHC Salt Lake Hospital" means the assets relating to FHP Hospital, a
125-bed acute care hospital and its surrounding campus in Salt Lake City, Utah.
"Physician Support Obligation" means any obligation or guarantee to,
or on behalf of or for the benefit of any physician, pharmacist or other allied
healthcare professional pursuant to a written agreement incurred in the ordinary
course of business in connection with recruiting, redirecting or retaining such
physician, pharmacist or other allied healthcare professional to provide service
to patients in the service area of any Hospital or Related Business owned,
leased or operated by the Company or any of its Subsidiaries or any Permitted
Joint Venture, but excluding actual compensation for services provided by such
physician, pharmacist or other allied healthcare professional to any Hospital or
Related Business owned, leased or operated by the Company or any of its
Subsidiaries or any Permitted Joint Venture.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal" means Dr. Manfred George Krukemeyer.
"Pro Forma Coverage Ratio" means with respect to any person for any
period, the PRO FORMA ratio of the Consolidated Cash Flow of such person for
such period to the Fixed Charges of such person for such period. The Pro Forma
Coverage Ratio shall, as applicable, be calculated on the following basis:
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(i) notwithstanding clause (ii) of the definition of
Consolidated Net Income, if the Indebtedness which is being created,
incurred or assumed is Acquired Indebtedness, the Pro Forma Coverage
Ratio shall be determined after giving effect to both the Fixed
Charges related to the creation, incurrence or assumption of such
Acquired Indebtedness and the Consolidated Cash Flow (A) of the person
becoming a Subsidiary of such person or (B) in the case of an
acquisition of assets which constitute substantially all of an
operating unit or business, relating to the assets being acquired by
such person;
(ii) notwithstanding the definition of Consolidated Net
Income, in the event the Company or any of its Subsidiaries has
acquired assets from a person during the four-quarter reference period
and such assets have been owned and operated by the Company for more
than one fiscal quarter, the Consolidated Cash Flow shall be computed
on a pro forma basis assuming such assets were acquired on the first
day of the four-quarter reference period based on actual performance
of the assets during the period owned;
(iii) there shall be excluded from Fixed Charges any
Fixed Charges related to Indebtedness repaid during and subsequent to
the four-quarter reference period and which is not outstanding on the
Calculation Date; and
(iv) the creation, incurrence or assumption of any
Indebtedness during the four-quarter reference period or subsequent
hereto and prior to the Calculation Date, and the application of the
proceeds therefrom, shall be assumed to have occurred on the first day
of the fourth quarter reference period.
"Proceeding" has the meaning specified in Section 1202.
"Purchase Money Indebtedness" means Indebtedness of the Company or its
Subsidiaries secured by Liens (i) on property purchased, acquired or constructed
after the date of original issuance of the Securities and used in the ordinary
course of business by the Company and its Subsidiaries and (ii) securing the
payment of all or any part of the purchase price or construction cost of such
assets and limited to the property so acquired and improvements thereof.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to Article
Eleven of this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to Article
Eleven of this Indenture, which shall include, without duplication, in each
case, accrued and unpaid interest to the Redemption Date.
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"Regular Record Date" for the interest payable on any Interest Payment
Date means the __________ or _____________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Related Business" means (i) a business affiliated with, or providing
services or financing to, a Hospital or related or ancillary to the ownership,
leasing, operation, financing or management of a Hospital or (ii) any business
related or ancillary to the provision of healthcare services or products.
"Related Party" with respect to the Principal means (A) any 80% (or
more) owned Subsidiary, or spouse or immediate family member of such Principal
or (B) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A), or (C) any Person employed by the
Company in a management capacity as of the date of this Indenture.
"Restricted Payments" has the meaning specified in Section 1009.
"Securities" means securities designated in the first paragraph of the
RECITALS OF THE COMPANY.
"Securities Payment" has the meaning set forth in Section 1202.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means (i) Obligations under the New Credit
Facility permitted to be incurred pursuant to this Indenture; (ii) the principal
of (and premium, if any) and accrued and unpaid interest, whether existing on
the date of this Indenture or hereafter incurred, in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other instruments of indebtedness for which the Company is
responsible or liable; (iii) all Capital Lease Obligations of the Company; (iv)
all obligations of the Company (A) for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (B) under
interest rate swaps, caps, collars, options or similar arrangements and foreign
currency hedges entered into in respect of any obligations described in clauses
(i), (ii) and (iii) immediately above and (c) issued or assumed as the deferred
purchase price of property or services and all conditional sale obligations and
all obligations under any title retention agreement; (v) all obligations of the
type referred to in clauses (ii), (iii) and (iv) immediately above and all
dividends of other persons for the payment of which, in either case, the Company
is responsible or liable as obligor, guarantor or otherwise; (vi) all
obligations consisting of modifications, renewals, extensions, replacements and
refundings of any obligations described in clause (i), (ii), (iii), (iv) or (v)
immediately above; and (vii) any other Indebtedness which by its terms or the
terms of any instrument creating it is designated as "Senior Indebtedness" or
senior in right of payment to the Securities. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include (1) any
Indebtedness as to which the terms of the instrument creating or evidencing the
same provide that such Indebtedness is not superior in right of
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payment to the Securities, (2) any Indebtedness which is subordinated in
right of payment in any respect to any other Indebtedness of the Company, (3)
Indebtedness evidenced by the Securities, the Existing Senior Subordinated
Notes and the Shareholder Subordinated Note, (4) any Indebtedness owed to a
Person when such Person is a Subsidiary or any other Affiliate of the
Company, (5) that portion of any Indebtedness which is incurred in violation
of the Indenture and (6) any liability for Federal, state, local or other
taxes owed or owing by the Company.
"Senior Nonmonetary Default" has the meaning specified in
Section 1203.
"Senior Payment Default" has the meaning specified in Section 1203.
"Services Agreement" means the agreement, dated as of July 17, 1996,
between the Company and Dr. Manfred George Krukemeyer.
"Settlement Costs" means the amount of up to $22,356,000 in
expenses incurred in connection with the settlement of two lawsuits,
associated legal fees and the related write-off of certain accounts
receivable.
"Shareholder Agreement" means the shareholder agreement dated August
___, 1996 by and between the Company and the Paracelsus Shareholder.
"Shareholder Subordinated Note" means the 6.51% subordinated note due
2006 of the Company.
"Significant Subsidiary" means any Subsidiary which 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.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"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 one or more Subsidiaries
of such Person (or any combination thereof).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
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"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in
Section 1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the total of the
product 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.
"Wholly Owned Subsidiary" of any Person means a Subsidiary for which
all of the Capital Stock (other than directors' qualifying shares) shall at the
time be owned by such Person or one or more Wholly Owned Subsidiaries of such
person.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
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(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 each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with;
PROVIDED, HOWEVER, with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATE.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments
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are delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security. Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the content is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities, PROVIDED that the Company may not set a record date for,
and the provisions of this paragraph shall not apply with respect to, the giving
or making of any notice, declaration, request or direction referred to in the
next paragraph. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such matter referred to in the
foregoing sentence, the record date for any such matter shall be the 30th day
(or, if later, the date of the
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most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; PROVIDED that no such
action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Securities on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Trustee in writing and to each Holder of Securities
in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; PROVIDED that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; PROVIDED that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
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Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: _______________, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee.)
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. If a notice or communication is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice.
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Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Trust Indenture
Act to be part of and govern this Indenture, the Trust Indenture Act provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
Trustee shall bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
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.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness (subject to Article Thirteen
hereof) and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
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SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, purchase
date (pursuant to an Asset Sale Offer or a Change of Control Offer) or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date, Redemption Date or purchase date, or at the Stated
Maturity, PROVIDED that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date, purchase date or Stated Maturity,
as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. FORM OF FACE OF SECURITY.
____% Senior Subordinated Notes due 2006
No. __________ $________
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Paracelsus Healthcare Corporation, a corporation duly organized and
existing under the laws of California (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to __________________, or registered
assigns, the principal sum of _____________________ Dollars on ____________, and
to pay interest thereon from _____________ or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on ___________ and ___________ in each year, commencing ___________, at the rate
of ___% per annum, until the principal hereof is paid or made available for
payment, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of __% per annum [2% over coupon] on any overdue
principal and premium and on any overdue installment of interest until paid.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ___________________ or ________________________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, New York in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-23-
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
Paracelsus Healthcare Corporation
[Seal]
By__________________________
Title:
Attest:
______________________________
Title:
SECTION 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities of the
Company designated as its ____% Senior Subordinated Notes due 2006 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $________, issued and to be
issued under an Indenture, dated as of August __, 1996 (herein called the
"Indenture"), between the Company and AmSouth Bank of Alabama, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
The Securities are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, at any time on or after __________, 2001, as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed during
the 12-month period beginning ________ of the years indicated,
Redemption Redemption
Year Price Year Price
--------- ---------- ------ -----------
2001 % 2003 %
2002 % 2004 %
-24-
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
In addition, the Securities are subject to redemption upon not less
than 30 nor more than 60 days' notice by mail in the event that pursuant to any
Change of Control Offer made by the Company there are properly tendered and
accepted for payment by the Company and paid by the Company in accordance with
the requirements of the Indenture and such Change of Control Offer Securities
representing 80% or more of the Securities Outstanding at the commencement of
such Change of Control Offer, in which case the Company may, at its option,
within 90 days after the purchase date for such Change of Control Offer, redeem
all, but not less than all, of the Securities remaining Outstanding after the
purchase date for such Change of Control Offer at a Redemption Price equal to
101% of the principal amount of the Securities together with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
The Securities do not have the benefit of any sinking fund
obligations.
In the event of redemption or purchase pursuant to an Asset Sale Offer
or Change of Control Offer of this Security in part only, a new Security or
Securities for the unredeemed or unpurchased portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture provides that, subject to certain conditions, if
(i) certain Net Proceeds are available to the Company as a result of Asset Sales
or (ii) a Change of Control occurs the Company shall be required to make an
Asset Sale Offer or Change of Control Offer, respectively, for all or a
specified portion of the Securities.
-25-
The Indenture contains provisions for defeasance at any time of
(i) the entire indebtedness of this Security or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
-26-
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety
by the Company pursuant to Section 1012 or 1015 of the Indenture, check the box:
/ /
If you want to elect to have only a part of this Security purchased by
the Company pursuant to Section 1012 or 1015 of the Indenture, state the amount:
$
Dated: Your Signature:____________________
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:___________________________________
(Signature must be guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or
trust company)
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
AmSouth Bank of Alabama,
as Trustee
By ____________________
Authorized Officer
-27-
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $______, except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities pursuant to Section 304, 305,
306, 906 or 1108 or in connection with an Asset Sale Offer or Change of Control
Offer pursuant to Section 1012 or Section 1015, respectively.
The Securities shall be known and designated as the "____% Senior
Subordinated Notes due 2006" of the Company. Their Stated Maturity shall be
____________ and they shall bear interest at the rate of ____% per annum, from
__________ or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, as the case may be, payable semi-annually on
_____________ and ________, commencing ___________, until the principal thereof
is paid or made available for payment.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company in the Borough of
Manhattan, the City of New York, New York maintained for such purpose and at any
other office or agency maintained by the Company for such purpose; PROVIDED,
HOWEVER, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Securities shall be subject to repurchase by the Company pursuant
to an Asset Sale Offer or Change of Control Offer as provided in Sections 1012
and 1015, respectively.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
The Securities shall be subject to defeasance at the option of the
Company as provided in Article Thirteen.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
-28-
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers or the corporate seal on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
-29-
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1108 or in accordance with any Asset
Sale Offer or Change of Control Offer pursuant to Section 1012 or Section 1015,
respectively, not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 1104 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
-30-
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
-31-
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this Clause. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to
each Holder at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
-32-
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any Asset Sale Offer or Change of
Control Offer pursuant to Section 1012 or Section 1015, respectively, shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of as directed by a Company Order.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a year of
twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture (including, but not limited to, Article Twelve
hereof), when
(1) either
-33-
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at
the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article Four, the obligations of the Company to the Trustee under
Section 607, the obligations of the Trustee to any Authenticating Agent under
Section 614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
-34-
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment when due of principal (or premium, if
any,) on the Securities at its Maturity; or
(3) default, on the applicable purchase date, in the purchase of
Securities required to be purchased by the Company pursuant to an
Asset Sale Offer or Change of Control Offer; or
(4) default in the performance, or breach, of any covenant or
agreement of the Company under this Indenture, and continuance of such
default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Subsidiaries (or the payment of which is Guaranteed by the Company
or any of its Subsidiaries) whether such Indebtedness or Guarantee now
exists, or shall
-35-
hereafter be created, which default results in the acceleration of the
maturity of such Indebtedness having an outstanding principal amount of
at least $15.0 million, or a failure to pay such Indebtedness having an
outstanding principal amount of at least $15.0 million at its stated
maturity, provided that such acceleration or failure to pay is not cured
within 10 days after such acceleration or failure to pay;
(6) failure by the Company or any of its Subsidiaries to pay
final non-appealable judgments (to the extent not covered by insurance
and as to which the insurer has not acknowledged coverage in writing)
aggregating in excess of $15.0 million which are not stayed within 60
days after their entry;
(7) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any
Significant Subsidiary of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or
order adjudging the Company or any such Significant Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of the Company or any such Significant Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any such Significant Subsidiary or of any
substantial part of the property of the Company or any such
Significant Subsidiary, or ordering the winding up or liquidation of
the affairs of the Company or any such Significant Subsidiary, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(8) the commencement by the Company or any Significant
Subsidiary of the Company of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent, or the consent by the Company or any such
Significant Subsidiary to the entry of a decree or order for relief in
respect of the Company or any Significant Subsidiary of the Company in
an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding
against the Company or any Significant Subsidiary of the Company, or
the filing by the Company or any such Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by the Company or
any such Significant Subsidiary to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or
-36-
any Significant Subsidiary of the Company or of any substantial part of
the property of the Company or any Significant Subsidiary of the
Company, or the making by the Company or any Significant Subsidiary of
the Company of an assignment for the benefit of creditors, or the
admission by the Company or any such Significant Subsidiary in writing
of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company or any such Significant
Subsidiary in furtherance of any such action.
Notwithstanding the 60-day period and notice requirement contained
in Section 501(4) above, (i) with respect to a default under Section 1015,
the 60-day period referred to in Section 501(4) shall be deemed to have begun
as of the date notice of a Change of Control Offer is required to be sent to
the Holders in the event that the Company has not complied with the
provisions of Section 1015(a), and the Trustee or Holders of at least 25% in
principal amount of the outstanding Securities thereafter give the notice of
default referred to in Section 501(4) in respect of such compliance to the
Company and, if applicable, the Trustee; PROVIDED, HOWEVER, that if the
breach or default is a result of a default in the payment when due of the
Change of Control Payment on the Purchase Date, such default shall be deemed,
for purposes of this Section 501, to arise on the applicable Purchase Date;
and (ii) with respect to a default under Section 1012 requiring the giving of
such notice, the 60-day period referred to in Section 501(4) shall be deemed
to have begun as of the date the notice of an Asset Sale Offer is required to be
sent in the event that the Company has not complied with the provisions of
Section 1012, and the Trustee or Holders of at least 25% in principal amount
of the outstanding Securities thereafter give the notice of default referred
to in Section 501(4) in respect of such compliance to the Company and, if
applicable, the Trustee; PROVIDED, HOWEVER, that if the breach or default is
a result of a default in the payment when due of the consideration for the
Asset Sale Offer on the Purchase Date, such default shall be deemed, for
purposes of this Section 501, to arise no later than on the Purchase Date.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(7) or (8)) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal and
any accrued interest shall become immediately due and payable. If an Event of
Default specified in Section 501(7) or (8) occurs, the principal of and any
accrued interest on the Securities then Outstanding shall IPSO FACTO become
immediately due and payable without any declaration or other Act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration (including any Securities required to
have been purchased on a purchase date pursuant to an Asset Sale
Offer or Change of Control Offer made by the Company) and, to the
extent that payment of such interest is lawful, interest thereon
at the rate provided by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided by the
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof or, with
respect to any Security required to have been purchased pursuant to an
Asset Sale Offer or Change of Control Offer made by the Company, at
the purchase date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue
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interest, at the rate provided by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by
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the Trustee shall be brought in its own name as trustee of an express trust
in favor of the Holders, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit
of the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (or premium, if any) or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the extent provided in Article Twelve, to the
holders of Senior Indebtedness in accordance with Article Twelve; and
THIRD: To the Holders in payment of the amounts then due and
unpaid for principal of (and premium, if any) and interest on the
Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 506.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, the Redemption Price
on the applicable Redemption Date or, in the case of an Asset Sale Offer or
Change of Control Offer made by the Company and required to be accepted as to
such Security, on the purchase date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be
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exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to
have been purchased pursuant to an Asset Sale Offer or Change of
Control Offer which has been made by the Company), as specified in
clauses (1), (2) and (3) of Section 501 and not yet cured, or
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(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted by it as Trustee,
a court may require any party litigant in such suit to file an undertaking to
pay the costs of such suit, and may assess costs, including reasonable
attorneys' fees, against any such party litigant in such suit, having due regard
to the merits and good faith of the claims or defenses made by such party
litigant, in the manner and to the extent provided in the Trust Indenture Act;
PROVIDED, that neither this Section nor the Trust Indenture Act shall be deemed
to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company, any suit instituted by the
Trustee, any suit instituted by the Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities, or any suit instituted by any Holder for enforcement of the payment
of principal of, or premium (if any) or interest on, any Security on or after
the respective Stated Maturity expressed in such Security (including, in the
case of redemption, on or after the Redemption Date).
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
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SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or to take or omit to take any action under this Indenture or at the request,
order or direction of the Holders or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate
(PROVIDED, HOWEVER, that in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture);
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(d) 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 in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
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SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the reasonable
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $100,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee may resign by so notifying the Company in writing.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 611.
(b) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holder or Holders of at least 10% in aggregate principal amount of the
Outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or an order for relief is entered
with respect to the Trustee under Federal or State bankruptcy laws or
a receiver of the Trustee or of its property shall be appointed or a
custodian or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder or Holders who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder or Holders who has been a bona fide
Holder of at least 10% in principal amount of Outstanding Securities for at
least six months may, on behalf of such Holder of Holders and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer, partial
conversion or partial redemption or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
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Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
AmSouth Bank of Alabama,
As Trustee
By___________________________,
As Authenticating Agent
By___________________________
Authorized Officer
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
If the Trustee is not the Security Registrar, the Company will furnish
or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee or any Paying Agent
may reasonably require, of the names and addresses of the Holders as
of such Regular Record Date, and
(b) at such other times as the Trustee or any Paying Agent may
request in writing, within 30 days after the receipt by the Company of
any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities and the
corresponding rights and duties of the Trustee, shall be provided by the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to the names and addresses of Holders made pursuant
to the Trust Indenture Act.
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SECTION 703. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to the Act; provided that any
such information, documents, or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. COMPANY MAY CONSOLIDATE, ETC. AND PURCHASES OF ASSETS ONLY ON
CERTAIN TERMS.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving entity), or directly or indirectly sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to another Person
unless:
(1) in the case the Company shall consolidate with or merge into
another Person or shall directly or indirectly sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties and assets, the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by sale,
assignment, transfer, lease, conveyance or other disposition all or
substantially all of the properties and assets of the Company (for purposes
of this Article Eight, a "Successor Company") shall be a corporation
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume by an indenture supplemental hereto executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on
all the Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed;
(2) immediately before and after giving effect to such transaction and
treating any Indebtedness incurred by the Company or the Successor Company,
if applicable, or any Subsidiary thereof as a result of such transaction as
having been incurred by the Company, the Successor Company or such
Subsidiary at the time of such transaction, no Default or Event of Default
shall have happened and be continuing; thereof
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(3) immediately after giving effect to such transaction, and treating
any Indebtedness incurred by the Company, the Successor Company or any
Subsidiary thereof as a result of such transaction as having been incurred
at the time of such transaction, the Company or the Successor Company could
Incur at least $1.00 of additional Indebtedness pursuant to the first
paragraph under Section 1008;
(4) if, as a result of any such transaction, property and assets of
the Company, the Successor Company or any Subsidiary thereof would become
subject to a Lien which would not be permitted by Section 1011, the Company
or, if applicable, the Successor Company, as the case may be, shall take
such steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) Indebtedness secured by such Lien;
and
(5) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition and, if
a supplemental indenture is required in connection with such transaction,
such supplemental indenture, complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with, and, with respect to such Officer's Certificate,
setting forth the manner of determination of the ability of the Company or,
if applicable, the Successor Company to incur Debt in accordance with
Clause (3) of this Section 801 as required pursuant to the foregoing.
Notwithstanding the foregoing, Clause (3) of this Section 801 shall not
prohibit a transaction, the principal purpose and effect of which is (as
determined in good faith by the Board of Directors of the Company and
evidenced by a Board Resolution) to change the state of incorporation of
the Company, and such transaction does not have as one of its purposes the
evasion of the restrictions of this covenant.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any transfer, conveyance, sale, lease or other
disposition of all or substantially all of the properties and assets of the
Company as an entirety in accordance with Section 801, the Successor Company
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to secure the Securities pursuant to the requirements of
Section 1011 or otherwise; or
(4) to comply with any requirements of the Commission in order
to effect and maintain the qualification of this Indenture under the
Trust Indenture Act; or
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, PROVIDED such action pursuant
to this Clause (5) shall not adversely affect the interests of the
Holders in any material respect; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities.
SECTION 902. SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture. Subject
to Sections 508 and 513, the Holder or Holders of not less than a majority in
aggregate principal amount of then Outstanding Securities may waive compliance
by the Company with any
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provision of this Indenture or the Securities. Notwithstanding any of the
above, however, no such supplemental indenture shall, without the consent of
the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
thereon, or change the place of payment where, or the coin or currency
in which, any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date or, in the case of
an Asset Sale Offer or Change of Control Offer which has been made, on
or after the applicable Purchase Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1018, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(4) modify any of the provisions of this Indenture relating to
the subordination of the Securities in a manner adverse to the
Holders, or
(5) following the mailing of an Offer with respect to an Asset
Sale Offer or Change of Control Offer pursuant to Sections 1012 or
1015, respectively, modify the provisions of this Indenture with
respect to such Asset Sale Offer or Change of Control Offer in a
manner adverse to such Holder.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or waiver,
but it shall be sufficient if such Act shall approve the substance thereof.
After an amendment, supplement or waiver under this Section 902
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 902 or
Section [514] becomes effective, it shall bind each Holder.
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In connection with any amendment, supplement or waiver under this
Article Nine, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine. In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section 601) shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture or waiver is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. No such supplemental indenture shall directly or
indirectly modify the provisions of Article Twelve in any manner which might
terminate or impair the rights of the Senior Indebtedness pursuant to such
subordination provisions.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture or waiver pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture or waiver. If the
Company shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture or
waiver may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
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ARTICLE TEN
Covenants
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture. An installment of principal of or interest
and premium, if applicable, on the Securities shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company, a
Subsidiary of the Company or an Affiliate of the Company) holds for the benefit
of the Holders, on or before 10:00 a.m., New York City time, on that date, cash
deposited and designated for and sufficient to pay the installment.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment, 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 will 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, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) 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 will 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 initially
designates _____________________ as such office.
SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
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Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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 (and 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 Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, New York notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
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SECTION 1004. EXISTENCE.
Subject to Article Eight, Section 1012 or elsewhere in this Indenture,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights (charter and statutory) and
franchises; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors in good faith
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1005. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Subsidiary of the Company to be
maintained and kept in good condition, repair and working order (reasonable wear
and tear excepted) and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section shall (a) prohibit
the Company from engaging in any transaction permitted under Article Eight or
Section 1012, and (b) prevent the Company from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1006. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or
any of its Subsidiaries or upon the income, profits or property of the
Company or any of its Subsidiaries and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any of its Subsidiaries; PROVIDED, HOWEVER,
that the Company shall not be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim (i) whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings or (ii) where the failure to effect such payment is
not adverse in any material respect to the Holders.
SECTION 1007. MAINTENANCE OF INSURANCE.
The Company shall provide, or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance or
maintenance of a captive insurance subsidiary) against loss or damage of the
kinds that, in the reasonable, good faith opinion of the Company, is adequate
and appropriate for the conduct of the business of the Company and its
Subsidiaries.
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SECTION 1008. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness); PROVIDED, HOWEVER, that the
Company may incur Indebtedness if, at the time such Indebtedness is incurred and
after giving effect thereto and the application of the proceeds therefor, the
Company's Pro Forma 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 not
be less than (x) 2.0 to 1 for Indebtedness incurred on or prior to December 31,
1997 and (y) 2.25 to 1 for Indebtedness incurred thereafter.
The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness pursuant
to the New Credit Facility and any renewal, extension, refinancing or
refunding thereof and Indebtedness of the Company or any of its
Subsidiaries incurred for working capital purposes, together in an
aggregate principal amount not to exceed at any time outstanding
$400.0 million LESS the aggregate amount of all Net Proceeds of Asset
Sales applied to permanently reduce Indebtedness (and the commitments)
thereunder pursuant to Section 1013;
(ii) Capital Lease Obligations in an aggregate principal
amount not to exceed 10% of the assets of the Company and its
Subsidiaries taken as a whole at any time outstanding (any excess to
be considered Indebtedness subject to the requirements described in
the first paragraph of this Section 1008;
(iii) the incurrence by the Company and its Subsidiaries
of Existing Indebtedness;
(iv) Indebtedness evidenced by letters of credit issued in
the ordinary course of business of the Company to secure workers'
compensation and other insurance coverages;
(v) Guarantees by a Subsidiary of the Company of
Indebtedness otherwise permitted to be incurred under the Indenture;
(vi) Physician Support Obligations;
(vii) Indebtedness incurred to purchase or finance any
person's purchase of any person's ownership interest in a Permitted
Joint Venture in accordance with the terms of the agreement under
which any such interest was issued;
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(viii) Purchase Money Indebtedness incurred in the
ordinary course of business;
(ix) Indebtedness (including letters of credit) incurred in
respect of performance bonds, standby letters of credit or surety or
appeal bonds in the ordinary course of business;
(x) the Shareholder Subordinated Note;
(xi) 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, (a) the Securities, (b) Existing
Indebtedness, (c) Indebtedness incurred pursuant to clauses (vii) and
(viii) of this paragraph, (d) the Shareholder Subordinated Note or (e)
any Indebtedness that was incurred in compliance with the Pro Forma
Coverage Ratio test contained in the first paragraph of this Section
1008;
(xii) the incurrence by the Company or any of its
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Subsidiaries; PROVIDED, HOWEVER, that (a) such
Indebtedness is expressly subordinate to the payment in full of the
Securities and (b)(1) any subsequent issuance or transfer (other than
for security purposes) of Equity Interests that result in any such
Indebtedness being held by a Person other than the Company or a
Subsidiary of the Company and (2) any sale or other transfer of any
such Indebtedness (including for security purposes) to a Person that
is neither the Company or a Subsidiary shall be deemed in each case,
to constitute an incurrence of such Indebtedness by the Company or
such Subsidiary, as the case may be; and
(xiii) the incurrence by the Company of Indebtedness not
otherwise permitted to be incurred by any other clause of this
paragraph in an aggregate principal amount at any time outstanding not
to exceed the greater of (x) $30 million and (y) 10% of the Company's
Consolidated Net Worth at the time of incurrence.
SECTION 1009. LIMITATIONS ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution (including, without limitation, any payment in
connection with any merger or consolidation involving the Company or any
Subsidiary of the Company (other than cash in lieu of fractional shares)) on
account of any Equity Interests of the Company or any of its Subsidiaries (other
than (x) dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company and (y) in the case of a Subsidiary,
dividends or distributions payable to the Company or any Wholly Owned Subsidiary
of the Company or
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pro rata dividends or distributions); (ii) purchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Company or any
Subsidiary or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Subsidiary of the Company
and joint venture interests evidencing ownership interests in Permitted Joint
Ventures); and (iii) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that by its
terms is subordinated in right of payment to the Securities, except in
accordance with the scheduled mandatory redemption or payment provisions set
forth in the original documentation governing such Indebtedness (but not
pursuant to any mandatory offer to repurchase upon the occurrence of any
events) (all such payments and other actions set forth in clauses (i) through
(iii) above being collectively referred to as "Restricted Payments"), unless:
(a) no Default or Event of Default shall have occurred under the
Securities or this Indenture and be continuing or would occur as a
consequence thereof;
(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 applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Pro Forma Coverage Ratio test set forth
in the first paragraph of Section 1008; and
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Subsidiaries or
other Affiliates after the date of this Indenture (excluding
Restricted Payments permitted by clauses (i), (ii), (iv), (v) and (vi)
of the next succeeding paragraph but including Restricted Payments
permitted by clause (iii) of the next succeeding paragraph), is less
than the sum of (i) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the date of this Indenture
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, minus 100% of such deficit), PLUS (ii) 100% of
the aggregate net cash proceeds, including the fair market value of
property other than cash (as determined in good faith by the Board),
received by the Company from the issuance or sale other than to a
subsidiary of the Company since the date of the Indenture of Equity
Interests other than Disqualified Capital Stock of the Company or of
debt securities or Disqualified Stock of the Company that have been
converted into such Equity Interests (other than Disqualified Stock)
PLUS (iii) $5.0 million.
The foregoing provision will not be violated by the payment of any
dividend within 60 days after the date of declaration thereof, if at such date
of declaration such payment would have complied with the provisions of this
Indenture. In addition, notwithstanding the foregoing, so long as no Event of
Default or Default shall have occurred
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or be continuing or would occur as a consequence thereof, the Company and any
Subsidiary may:
(i) purchase, redeem, or otherwise acquire or retire for value any
Equity Interests of the Company in exchange for, or out of the net proceeds
of, the substantially concurrent sale (other than to a Subsidiary of the
Company) of other Equity Interests of the Company (other than Disqualified
Stock); PROVIDED that the amount of any such net cash proceeds that are
utilized for any such purchase, redemption or other acquisition or
retirement shall be excluded from clause (c)(ii) of the preceding
paragraph;
(ii) defease, redeem or repurchase subordinated Indebtedness with the
net proceeds from an incurrence of Permitted Refinancing Indebtedness or of
or in exchange for the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); PROVIDED that the amount of any such net cash proceeds
that are utilized for any such purchase, redemption, repurchase, retirement
or other acquisitions shall be excluded from clause (c)(ii) of the
preceding paragraph;
(iii) redeem or repurchase any Equity Interests of the Company or any
Subsidiary of the Company held by any officers, directors or employees of
the Company (or any of its Subsidiaries) whose employment has been
terminated or who have died or become disabled, so long as the aggregate
amount of payments for all such redemptions or repurchases in any fiscal
year do not exceed $5.0 million;
(iv) pay scheduled dividends on or redeem any preferred stock issued
by a Subsidiary of the Company permitted to be created or issued pursuant
to the provisions of Section 1008;
(v) pay the Dividend to the Paracelsus Shareholder; and
(vi) redeem or repurchase Common Stock from holders thereof who
beneficially own in the aggregate less than 1% of the outstanding Common
Stock (other than officers, directors or employees of the Company or any of
its Subsidiaries whose Equity Interests are redeemed or repurchased in
accordance with clause (iii) of this paragraph) within two years from the
date of this Indenture so long as the aggregate amount of payments for all
such redemptions or repurchases in such period do not exceed $1 million.
Any payment made pursuant to clause (iii) of this paragraph shall be a
Restricted Payment for purposes of calculating aggregate Restricted Payments
pursuant to clause (c) of the preceding paragraph.
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 Section 1009 were
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computed, which calculations shall be based upon the Company's latest
available financial statements.
SECTION 1010. LIMITATIONS ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any 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; (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries; or (iv)
Guarantee any loans or advances to the Company or any of its Subsidiaries,
except for such encumbrances or restrictions existing under or by reasons of:
(a) Existing Indebtedness, as in effect on the date of this
Indenture;
(b) the New Credit Facility, as in effect on the date of this
Indenture, and any amendments, modifications, restatements,
extensions, renewals, increases, supplements, refundings, replacements
or refinancings thereof, PROVIDED that such amendments, modifications,
restatements, extensions, renewals, increases, supplements,
refundings, replacements or refinancings are not materially more
restrictive in the aggregate than those contained in the New Credit
Facility, as in effect on the date of this Indenture;
(c) this Indenture and the Securities;
(d) applicable law;
(e) 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 acquisition (except to the extent such
Indebtedness was incurred in connection with, or in contemplation of
such acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired,
PROVIDED that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred;
(f) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with
past practices;
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(g) restrictions contained in security agreements relating to
Purchase Money Indebtedness to the extent such restrictions restrict
the transfer of property subject to such security agreement;
(h) 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;
(i) any Permitted Joint Venture, PROVIDED that such restrictions
apply only to the assets of such Permitted Joint Venture; or
(j) any agreement which has been entered into for the sale or
disposition of all of the assets or capital stock of a Subsidiary;
PROVIDED, HOWEVER, that with respect to this Clause (j), such
encumbrances or restrictions shall exist (A) only with respect to the
Subsidiary being sold or disposed of and (B) only for a period of six
months following the execution of such agreement.
SECTION 1011. LIMITATIONS ON LIENS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien, other
than Permitted Liens, on any property or asset now owned or hereafter acquired,
or on any income or profits therefrom or assign or convey any right to receive
income therefrom, to secure any Indebtedness that is PARI PASSU with or
subordinate in right of payment to the Securities, unless the Securities are
either (i) secured by a Lien on such property, assets, income or profits that is
senior in priority to the Lien securing such other Indebtedness, if such other
Indebtedness is subordinated in right of payment to the Securities or (ii)
equally and ratably secured by a Lien on such property, assets, income or
profits with the Lien securing such other Indebtedness, if such other
Indebtedness is PARI PASSU in right of payment to the Securities.
SECTION 1012. LIMITATIONS ON DISPOSITION OF ASSETS.
(a) Subject to Section 801, the Company may not, and may not permit any of
its Subsidiaries to, sell, transfer or otherwise dispose of any assets
(including by way of sale and leaseback), other than in the ordinary course of
business or the sale of accounts receivable in connection with a receivables
financing that is not required under GAAP to be booked as liabilities on the
balance sheet of the Company or its Subsidiaries, or all or substantially all of
the Capital Stock of any Subsidiary directly or indirectly owned by the Company
in each case whether in a single transaction or a series of related transactions
that have an aggregate fair market value in excess of $15.0 million or for net
proceeds in excess of $15 million (an "Asset Sale") unless the Net Proceeds from
such Asset Sale are applied in accordance with the following provisions. Within
365 days after the receipt of any Net Proceeds from an Asset Sale, the Company
may apply such Net Proceeds, at its option, (a) to permanently reduce
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Indebtedness (and, in the case of revolving Indebtedness, to permanently reduce
the commitments) under the New Credit Facility or to reduce other Senior
Indebtedness of the Company, (b) to an Investment in a Permitted Business or a
controlling interest in a person that owns a Permitted Business or the making of
a capital expenditure or to acquire other tangible assets, in each case, engaged
or used in a Permitted Business or any Permitted Joint Venture. Pending the
final application of any such Net Proceeds, the Company may temporarily reduce
revolving Indebtedness under the New Credit Facility (or any renewal, extension,
refinancing or refunding thereof) or otherwise invest such Net Proceeds in any
manner that is not prohibited by the Indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the preceding sentence of
this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be
required to make an offer to all Holders (an "Asset Sale Offer") to purchase the
maximum principal amount of Securities and, on a pro rata basis, any other
Indebtedness requiring to be so repurchased (including the Existing Senior
Subordinated Notes) 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 to the date of purchase, in accordance
with the procedures set forth in this Indenture. To the extent that the
aggregate amount of Securities (and, if applicable, Existing Senior Subordinated
Securities) tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. Upon completion of such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero. Notwithstanding the foregoing (a) a
transfer of assets by the Company or a Subsidiary, (b) any issuance of Equity
Interests by a Subsidiary to the Company or another Subsidiary of the Company
and (c) any Restricted Payment permitted by the covenant described under
Section 1009, shall not be deemed to be an Asset Sale.
(b) The Company will mail any Asset Sale Offer required pursuant to
Section 1012(a) not more than 30 days after the aggregate amount of Excess
Proceeds exceeds $15 million. Each Holder shall be entitled to tender all or
any portion of the Securities owned by such Holder pursuant to the Asset Sale
Offer, subject to the requirement that any portion of a Security tendered must
be tendered in an integral multiple of $1,000 principal amount. The Company
shall comply with the requirements of Rule 14e-1 (or any successor provision
thereto) 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 pursuant to the Asset Sale Offer.
(c) Not later than the date of an Asset Sale Offer, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the assets involved in
the Asset Sale(s) giving rise to such Asset Sale Offer including the
consideration received therefor, the Net Proceeds therefrom and the amount of
Excess Proceeds; (ii) the allocation of the Net Proceeds from the Asset Sale(s)
pursuant to which such Asset Sale Offer is being made, including, if amounts are
invested pursuant to Clause (b) of paragraph (a) of this Section 1012 or capital
expenditures or acquisitions of tangible assets are made pursuant to Clause (b)
of paragraph (a), the actual Investment(s), capital expenditure(s) or
acquisition(s) made and a statement as to the compliance with the requirements
of Clause (b) of paragraph (a); and (iii) the compliance of such allocation with
the provisions of paragraph (a) of this Section 1012.
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(d) The Company and the Trustee shall perform their respective obligations
specified in the Asset Sale Offer. On or prior to the purchase date, the
Company shall (i) accept for payment (on a pro rata basis, if necessary)
Securities or portions thereof tendered pursuant to the Offer, (ii) deposit with
the paying agent (or, if the Company is acting as its own paying agent,
segregate and hold in trust as provided in Section 1003) money sufficient to pay
the purchase price of all Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee all Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof accepted for payment by the Company. The paying agent (or the Company,
if so acting) shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Security equal
in principal amount to any unpurchased portion of the Security surrendered. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Offer on or as soon as practicable after the Purchase Date.
SECTION 1013. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any 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
in the aggregate are no less favorable to the Company or such Subsidiary than
those that would 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 or series of related
Affiliate Transactions involving aggregate consideration in excess of
$1.0 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 has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5 million, the Board of Directors shall
have obtained an opinion from an investment banking firm of national standing to
the effect that such Affiliate Transaction is fair to the Company or such
Subsidiary from a financial point of view; PROVIDED, HOWEVER, that (i)
employment contracts, "know-how" agreements, compensation arrangements and loans
to employees, in each case in the form existing as of the date of this Indenture
or representing a continuation, extension, renewal, refinancing or replacement
thereof on terms no less favorable to the Company than those contained in such
contracts, agreements, arrangements or loans in the form existing as of the date
of this Indenture, (ii) transactions between or among the Company, its
Subsidiaries and/or Permitted Joint Ventures, (iii) the making of Physician
Support Obligations, (iv) each Merger Related Agreement, in each case in the
form existing as of the date of this Indenture or representing a continuation,
extension, renewal, refinancing or replacement thereof on terms no less
favorable to the Company than those contained in such Merger Related Agreement
in the form existing as of the date of this
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Indenture and (v) transactions permitted by Section 1009, in each case, shall
not be deemed Affiliate Transactions.
SECTION 1014. LIMITATIONS ON OTHER SUBORDINATED INDEBTEDNESS.
The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is both subordinate or junior
in right of payment to any Senior Indebtedness and senior in right of payment to
the Securities.
SECTION 1015. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of a
Security will have the right to require the Company to repurchase such Holder's
Security pursuant to the offer described below (the "Change of Control Offer")
at a purchase price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Payment") (PROVIDED, HOWEVER, that installments of interest
whose Stated Maturity is on or prior to the Purchase Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307). Each Holder shall
be entitled to tender all or any portion of the Securities owned by such Holder
pursuant to the Change of Control Offer, subject to the requirement that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount.
(b) Within 30 days following any Change of Control, the Company will
mail the Change of Control Offer to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Securities pursuant to the procedures required by this covenant and described in
such Change of Control Offer. The Company and the Trustee shall perform their
respective obligations specified in the Change of Control Offer. The Company
will comply with the requirements of Rule 14e-1 Exchange Act (and any succession
provision thereto) and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of the Securities pursuant to the Change of Control Offer. On or
prior to the purchase date for such Change of Control Offer, the Company shall,
to the extent lawful, (i) accept for payment Securities or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent or Trustee (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) money sufficient to pay
the Change of Control Payment for all Securities or portions thereof so accepted
and (iii) deliver or cause to be delivered to the Trustee all Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent or
Trustee shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Change of Control Payment, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Security
or Securities equal in principal amount to any unpurchased portion of the
Security surrendered as requested by the Holder. Any Security not accepted for
payment
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shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the purchase date for such Change of
Control Offer.
(c) Prior to the time required for the mailing of the Change of
Control Offer, but in any event within 30 days following a Change of Control,
the Company will to the extent required either (i) repay all outstanding Senior
Indebtedness or (ii) obtain the requisite consents, if any, under all agreements
governing outstanding Senior Indebtedness to permit the repurchase of Securities
required by this covenant. The failure to obtain any such consents will not
relieve the Company of its obligation to repurchase the Securities pursuant to a
Change of Control Offer.
(d) The Change of Control provisions described in this Section 1015
will be applicable whether or not any other provisions of this Indenture are
applicable.
SECTION 1016. LIMITATION ON CONDUCT OF BUSINESS.
The Company shall not, and shall not permit any Subsidiary of the
Company to, engage in any business other than a Permitted Business.
SECTION 1017. REPORTS.
Whether or not required by the rules and the regulations of the
Commission, so long as any Securities are Outstanding, the Company will furnish
to the Holders (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
(or on any successors forms thereto or pursuant to any successor requirement
thereof) if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its Subsidiaries and, with respect to the annual information
only, a report thereon by the Company's certified, independent accountants and
(ii) all current reports that would be required to be filed with the Commission
on Form 8-K (or any successor form thereto or pursuant to any successor
requirement thereof) if the Company were required to file such reports.
SECTION 1018. STATEMENT BY OFFICERS AS TO DEFAULT; COMPLIANCE CERTIFICATES.
(a) The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year, and within 60 days after the end of each fiscal
quarter (other than the fourth fiscal quarter), of the Company ending after
the date hereof an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company has failed to comply with any
conditions or covenants in Section 801 or Sections 1004 to 1017, inclusive,
of this Indenture or any Event of Default or event which with notice or the
passage of time would become an Event of Default which has occurred and is
continuing and, if such signer does know of such a failure or default, the
certificate shall describe such failure or default with
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particularity. The Officers' Certificate shall also notify the Trustee
should the relevant fiscal year end on any date other than the current fiscal
year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, as soon as possible and in any event within
10 days after the Company becomes aware or should reasonably become aware of the
occurrence of a Default or an Event of Default, an Officers' Certificate setting
forth the details of such Default or Event of Default, and the action which the
Company proposes to take with respect thereto.
SECTION 1019. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801 and Sections 1004 to 1017 if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; PROVIDED, HOWEVER, with respect to an Asset Sale Offer or
Change of Control Offer as to which an Offer has been mailed, no such waiver may
be made or shall be effective against any Holder tendering Securities pursuant
to such Offer, and the Company may not omit to comply with the terms of such
Offer as to such Holder.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
(a) The Securities may be redeemed at the election of the Company, as
a whole or from time to time in part, at any time on or after ____________,
2001, at the Redemption Prices specified in the form of Security hereinbefore
set forth together with accrued and unpaid interest to the Redemption Date.
(b) In the event that, pursuant to any Change of Control Offer, there
are properly tendered and accepted for payment by the Company, and paid by the
Company in accordance with the requirements of this Indenture and such Change of
Control Offer Securities representing 80% or more of the Securities Outstanding
at the commencement of such Change of Control Offer, then the Company shall have
the right, at its option, to redeem within 90 days after the purchase date for
such Change of Control Offer all, but not less than all, of the Securities
remaining Outstanding after such Change of Control Offer at a Redemption Price
equal to 101% of the principal amount thereof, together with accrued interest to
the Redemption Date.
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SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as permitted
by any provision of this Indenture, shall be made in accordance with such
provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In the case of
redemption pursuant to Section 1101(b), the Company shall also deliver to the
Trustee an Officers' Certificate stating that the Company is entitled to effect
such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company to so redeem have occurred and
been satisfied. In case of any redemption at the election of the Company of
less than all the Securities, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders. Any such notice may be
cancelled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
[If the Company elects to reduce the principal amount of Securities to
be redeemed by crediting against any such redemption Securities it has not
previously delivered to the Trustee for cancellation, it shall so notify the
Trustee of the amount of the reduction and deliver such Securities with such
notice.]
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
Securities of a denomination larger than $1,000. Securities in denominations of
$1,000 may be redeemed only in whole.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
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SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, including the amount of accrued and
unpaid interest to be paid upon such redemption,
(3) whether the redemption is being made pursuant to Section 1101(a)
or (b) and, if being made pursuant to either Section 1101(b), a brief
statement setting forth the Company's right to effect such redemption and
the Company's basis therefor,
(4) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price,
(7) the name, address and telephone number of the Paying agent,
(8) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to collect
the Redemption Price,
(9) that, unless the Company defaults in its obligation to
deposit cash or U.S. Government Obligations which 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 an amount to fund the
Redemption Price with the Paying Agent in accordance with Section 1106
hereof or such redemption payment is otherwise prohibited, interest on
Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price, including
accrued and unpaid interest to the Redemption Date, upon surrender to
the Paying Agent of the Securities called for redemption and to be
redeemed,
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(10) if any Security is being redeemed in part, the portion of
the principal amount equal to $1,000 or an integral multiple thereof,
of such Security to be redeemed and that, after the Redemption Date,
and upon surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion thereof
will be issued,
(11) the CUSIP number of the Securities to be redeemed, and
(12) disclaimer language regarding CUSIP numbers in the
Trustee's standard form.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
cash or U.S. Government Obligations sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
and unpaid interest on, all the Securities which are to be redeemed on that date
(other than Securities or portions thereof called for redemption on that date
that have been delivered by the Company to the Trustee for cancellation). The
Paying Agent shall promptly return to the Company any cash or U.S. Government
Obligations so deposited which is not required for that purpose upon the written
request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article Eleven and payment of the Securities called for
redemption is not otherwise prohibited, interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall
continue to accrue and be paid from the Redemption Date until such payment is
made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 1001 hereof and the Security.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (if the Company
complies with Section 1106) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the
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Redemption Price, together with accrued and unpaid interest to the Redemption
Date; PROVIDED, HOWEVER, that installment of interest whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article (subject to the provisions
of Article Four and Article Thirteen), the payment of the principal of (and
premium, if any) and interest on each and all of the Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness.
SECTION 1202. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment or distribution of cash or property (other than Capital
Stock of the Company or other securities of the Company that are subordinated to
Senior Indebtedness to at least the same extent as the Securities) of the
Company will be made on account of principal of or interest on the Securities,
or to defease or acquire any of the Securities, or on account of the redemption
provisions of the Securities (i) upon the maturity of any Senior Indebtedness by
lapse of time, acceleration or otherwise, unless and until all Senior
Indebtedness shall first be paid in full in cash, or such payment duly made in a
manner satisfactory to the holders of such Senior Indebtedness or (ii) in the
event that the Company defaults in the payment of any principal of, premium, if
any, or interest on or any other amounts payable on or due in connection with
any Senior Indebtedness when it becomes due and payable, whether at maturity or
at a date fixed for prepayment or by declaration or
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otherwise, unless and until such default has been cured or waived in writing
or has ceased to exist.
(b) If (i) a default in the payment of the principal of or interest on
Senior Indebtedness occurs and is continuing beyond any applicable period of
grace (whether by acceleration or otherwise) or (ii) any other default shall
have occurred and be continuing that would permit the holders of the Designated
Senior Indebtedness to accelerate the maturity of Designated Senior
Indebtedness, upon written notice (a "Payment Blockage Notice") of the default
given to the Company and the Trustee by the holders of, or an agent, trustee or
other representative for, such Designated Senior Indebtedness, then, unless and
until such default has been cured or waived in writing, no payment or
distribution of cash or property (other than Capital Stock of the Company or
other securities of the Company that are subordinated to Senior Indebtedness to
at least the same extent as the Securities) shall be made by the Company with
respect to the principal of or interest on the Securities or on account of
redemption of the Securities or to acquire or repurchase any of the Securities
for cash or property other than Capital Stock of the Company. With respect to
clause (ii) above, if such Designated Senior Indebtedness is not declared due
and payable within 180 days after written notice of the event of default is
given, promptly after the end of the 180-day period the Company will pay all
sums due in respect of the Securities and not paid during the 180-day period.
Payments on the Securities may and shall be resumed in the case of a payment
default upon the date on which such default is cured or waived. During any 360-
day consecutive period, only one such period during which payment with respect
to the Securities may not be made may commence and the duration of such period
may not exceed 180 days. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been waived for a period of not less than 90 days.
(c) If any payment or distribution of assets of the Company is
received by the Trustee or any Holder in respect of the Securities at a time
when that payment or distribution should not have been made because of
paragraph (a) or (b) of this Section 1202, and provided that prior to the
Trustee's disbursement of such distribution or payment, the Trustee shall have
received a written notice as specified in Section 1209 from the Company or from
an agent or representative for one or more holders of Senior Indebtedness, such
payment or distribution will be received and held and will be paid over to the
holders of Senior Indebtedness (pro rata as to each of such holders on the basis
of the respective amounts of Senior Indebtedness held by them) until all such
Senior Indebtedness has been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the holders of such Senior
Indebtedness.
SECTION 1203. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership or similar proceeding relating to the Company or its
property or upon an
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assignment for the benefit of creditors or any marshalling of the Company's
assets or liabilities or otherwise):
(a) the holders of all Senior Indebtedness will first be entitled to
receive payment in full of the principal of and interest due on Senior
Indebtedness (including interest accruing after the commencement of a bankruptcy
or insolvency at the rate specified in the applicable Senior Indebtedness and
including, without limitation, in respect of premiums, indemnities or otherwise,
and all indebtedness under the New Credit Facility which is disallowed, avoided
or subordinated pursuant to Section 548 of Title 11, United States Code or any
applicable state fraudulent conveyance law) before the Holders are entitled to
receive any payment or distribution on account of the principal of or interest
on the Securities;
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (except that Holders may
receive securities that are subordinated at least to the same extent as the
Securities to Senior Indebtedness and any securities issued in exchange for
Senior Indebtedness), to which Holders or the Trustee would be entitled except
for the provisions of this Section 1203 will be paid by the liquidating trustee
or agent or other persons making such a payment or distribution directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
representatives to the extent necessary to make or provide for payment in full
in cash of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness or
provision for that payment or distribution; and
(c) if, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities (except that Holders may receive securities that are subordinated at
least to the same extent as the Securities to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness) is received by the
Trustee or the Holders on account of the principal of or interest on the
Securities before all Senior Indebtedness is paid in full such payment or
distribution will be received and held in trust for and will be forthwith paid
over to the holders of the Senior Indebtedness remaining unpaid or unprovided
for or their representatives for application (in the case of cash) to, or as
collateral (in the case of non-cash property or securities) for the payment of
such Senior Indebtedness until all such Senior Indebtedness has been paid in
full, after giving effect to any concurrent payment or distribution or provision
therefor to the holders of such Senior Indebtedness.
The Company will give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of it or any assignment
for the benefit of its creditors.
SECTION 1204. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except or under
the conditions described in Section 1202 or during the pendency of any
proceeding referred to in
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Section 1203, from making payments or distributions on the Securities or (b)
the application by the Trustee of any money deposited with it hereunder to
payments or distributions on the Securities or the retention of such payments
or distributions on the Securities by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such payment or
distribution on the Securities would have been prohibited by the provisions
of this Article.
SECTION 1205. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness, the Holders
shall be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all amounts owing on the Securities
shall be paid in full; and, for the purposes of such subrogation:
(a) no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders or the
Trustee on their behalf would be entitled except for the provisions of this
Article Twelve and no payment pursuant to the provisions of this Article Twelve
to the holders of Senior Indebtedness by Holders or the Trustee on their behalf
shall, as between the Company, its creditors (other than holders of Senior
Indebtedness) and the Holders, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness; and
(b) no payment or distributions of cash, property or securities to or
for the benefit of the Holders pursuant to the subrogation provision of this
Article Twelve, which would otherwise have been paid to the holders of Senior
Indebtedness, shall be deemed to be a payment by the Company to or for the
account of the Securities.
SECTION 1206. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional to pay to the Holders of the
Securities the principal of (and premium, if any) and interest on the Securities
as and when the same shall become due and payable in accordance with their
terms; or (b) affect the relative rights against the Company of the Holders of
the Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder upon the exercise of any
such remedy.
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SECTION 1207. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company or the filing of a claim for the unpaid balance of his Securities
in the form required in those proceedings. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding at least
30 days before the expiration of the time to file such claim or claims, then the
holders of Senior Indebtedness and their agents, trustees, or other
representatives (including, without limitation, any agent under the New Credit
Facility) are hereby authorized to have the right to file, and are hereby
authorized to file, an appropriate claim for and on behalf of the Holders.
SECTION 1208. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 1209. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence
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of any facts which would prohibit the making of any payment to or by the
Trustee in respect of the Securities, unless and until the Trustee shall have
received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled in all respects to assume that no such facts exist;
PROVIDED, HOWEVER, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium,
if any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the contrary which
may be received by it within two Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor or representative thereof) to establish that such notice has been given
by a holder of Senior Indebtedness (or a trustee therefor or representative
thereof). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness (or a trustee therefor or representative thereof) to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 1210. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 1211. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mis-
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takenly pay over or distribute to Holders of Securities or to the Company or
to any other Person cash, property or securities to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1212. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION
OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1213. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Section 1212 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1214. DEFEASANCE OF THIS ARTICLE TWELVE.
The subordination of the Securities provided by this Article Twelve
is expressly made subject to the provisions for defeasance or covenant
defeasance in Article Thirteen hereof and, anything herein to the contrary
notwithstanding, upon the effectiveness of any such defeasance or covenant
defeasance, the Securities then outstanding shall thereupon cease to be
subordinated pursuant to this Article Twelve.
SECTION 1215. THIS ARTICLE NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of the principal of or
interest on the Securities by reason of any provision of this Article Twelve
will not be construed as preventing the occurrence of an Event of Default.
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SECTION 1216. REPRESENTATIVE OF SENIOR INDEBTEDNESS.
Subject to Section 1209, any notices to be given or payments to be
made to any holders of Senior Indebtedness pursuant to this Indenture may be
made or given to their authorized representative.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may at its option by Board Resolution, at any time, elect
to have either Section 1302 or Section 1303 applied to the Outstanding
Securities upon compliance with the conditions set forth below in this Article
Thirteen.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities,
and the provisions of Article Twelve hereof shall cease to be effective, on
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 1304 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any)
and interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 304, 305, 306,
1002 and 1003, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article Thirteen. Upon defeasance as provided
herein, the Trustee shall promptly execute and deliver to the Company any
documents reasonably requested by the Company to evidence or effect the
foregoing. Subject to compliance with this Article Thirteen, the Company may
exercise its option under this Section 1302 notwithstanding the prior
exercise of its option under Section 1303.
SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, (i) the Company shall be released from its
obligations under Sections 1005 through 1018, inclusive, and Clauses (2), (3)
and (4) of Section 801, (ii) the occurrence of an event specified in Sections
501(4) (with respect to any of Sections 1005 through 1018, inclusive and
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Clauses (2), (3) and (4) of Section 801), 501(5) and 501(6) shall not be
deemed to be an Event of Default, (iii) the provisions of Article Twelve
hereof shall cease to be effective on and after the date the conditions set
forth below are satisfied and (iv) 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 thereunder (hereinafter, "covenant defeasance"). For
this purpose, such covenant defeasance means that the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section, Clause or Article, whether directly
or indirectly by reason of any reference elsewhere herein to any such
Section, Clause or Article or by reason of any reference in any such Section,
Clause or Article to any other provision herein or in any other document (and
Section 501(4) shall not apply to any such Section, Clause or Article) but
the remainder of this Indenture and such Securities shall be unaffected
thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
1302 or Section 1303 to the then Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this
Article Thirteen 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)
money in an amount, or (B) U.S. Government Obligations which 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, money in an amount, or (C) a combination thereof,
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
Paying Agent or Trustee (or other qualifying trustee) to pay and discharge,
the principal of, premium, if any, and each installment of interest on the
Outstanding Securities on the Stated Maturity of such principal or
installment of interest in accordance with the terms of this Indenture and
of such Outstanding Securities. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations of the United
States of America for the payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by
such custodian for the account of the holder of such depository receipt,
PROVIDED that (except as
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required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(2) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Indenture there has
been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred.
(3) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize gain or loss for
Federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit and covenant defeasance had not occurred.
(4) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 608 and for
purposes of the Trust Indenture Act with respect to any securities of the
Company.
(5) No Event of Default shall have occurred and be continuing on the
date of such deposit or, insofar as subsections 501(7) and (8) are
concerned, at any time during 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, but in the case of
covenant defeasance, the covenants which are described under Section 1303
will cease to be in effect unless an Event of Default under Section 501(7)
or Section 501(8) occurs during such period).
(6) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument to which the Company is a party or by which it is
bound.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1302
or the covenant defeasance under Section 1303 (as the case may be) have
been complied with.
(8) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in
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the Investment Company Act of 1940, as amended, or such trust
shall be qualified under such act or exempt from regulation thereunder.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Paying Agent or Trustee (or other qualifying trustee, collectively, for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Securities shall be held in trust and applied by the Paying Agent
or 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 its own 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 (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law. Money so held in trust shall not be subject to the provisions of Article
Twelve.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 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 Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 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 1304(1)), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1302 or 1303 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 this Article Thirteen until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 1302 or 1303; PROVIDED, HOWEVER, that if the Company makes any
payment of principal of (and 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 Securities to receive such
payment from the money held by the Trustee or the Paying Agent.
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
PARACELSUS HEALTHCARE CORPORATION
By
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Attest:
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AMSOUTH BANK OF ALABAMA
By
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Attest:
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