Exhibit 4.1
SELECT MEDICAL CORPORATION,
THE SUBSIDIARY GUARANTORS PARITIES HERETO
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
____
INDENTURE
Dated as of June 11, 2001
____
9 1/2% Senior Subordinated Notes Due 2009
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions........................................................................ 1
Section 102. Other Definitions.................................................................. 33
Section 103. Rules of Construction.............................................................. 34
Section 104. Incorporation by Reference of TIA.................................................. 35
Section 105. Conflict with TIA.................................................................. 35
Section 106. Compliance Certificates and Opinions............................................... 35
Section 107. Form of Documents Delivered to Trustee............................................. 36
Section 108. Acts of Noteholders; Record Dates.................................................. 37
Section 109. Notices, etc., to Trustee and Company.............................................. 39
Section 110. Notices to Holders; Waiver......................................................... 40
Section 111. Effect of Headings and Table of Contents........................................... 40
Section 112. Successors and Assigns............................................................. 40
Section 113. Separability Clause................................................................ 40
Section 114. Benefits of Indenture.............................................................. 40
Section 115. Governing Law...................................................................... 40
Section 116. Legal Holidays..................................................................... 41
Section 117. No Personal Liability of Directors, Officers, Employees, Incorporators and
Stockholders....................................................................... 41
Section 118. Exhibits and Schedules............................................................. 41
Section 119. Counterparts....................................................................... 41
ARTICLE 2
NOTE FORMS
Section 201. Forms Generally.................................................................... 41
Section 202. Form of Trustee's Certificate of Authentication.................................... 43
Section 203. Restrictive and Global Note Legends................................................ 44
ARTICLE 3
THE NOTES
Section 301. Title and Terms.................................................................... 46
Section 302. Denominations...................................................................... 46
Section 303. Execution, Authentication and Delivery and Dating.................................. 46
Section 304. Temporary Notes.................................................................... 47
Section 305. Registration, Registration of Transfer and Exchange................................ 48
i
Section 306. Mutilated, Destroyed, Lost and Stolen Notes........................................ 49
Section 307. Payment of Interest Rights Preserved............................................... 49
Section 308. Persons Deemed Owners.............................................................. 50
Section 309. Cancellation....................................................................... 51
Section 310. Computation of Interest............................................................ 51
Section 311. CUSIP Numbers...................................................................... 51
Section 312. Book-Entry Provisions for Global Notes............................................. 51
Section 313. Special Transfer Provisions........................................................ 54
Section 314. Payment of Additional Interest..................................................... 58
ARTICLE 4
COVENANTS
Section 401. Payment of Principal, Premium and Interest......................................... 58
Section 402. Maintenance of Office or Agency.................................................... 58
Section 403. Money for Payments To Be Held in Trust............................................. 59
Section 404. SEC Reports........................................................................ 60
Section 405. Statement as to Default............................................................ 60
Section 406. Limitation on Indebtedness......................................................... 61
Section 407. Limitation on Layering............................................................. 65
Section 408. Limitation on Restricted Payments.................................................. 65
Section 409. Limitation on Restrictions on Distributions from
Restricted Subsidiaries............................................................ 70
Section 410. Limitation on Sales of Assets and Subsidiary Stock................................. 72
Section 411. Limitation on Affiliate Transactions............................................... 75
Section 412. Limitation on Liens................................................................ 76
Section 413. Future Subsidiary Guarantors....................................................... 77
Section 414. Purchase of Notes Upon a Change in Control......................................... 77
Section 415. Limitation on Sale of Capital Stock of Restricted Subsidiaries..................... 79
Section 416. Limitation on Lines of Business.................................................... 80
Section 417. Payments for Consent............................................................... 80
Section 418. Corporate Existence................................................................ 80
Section 419. Payment of Taxes and Other Claims.................................................. 81
ARTICLE 5
SUCCESSOR COMPANY
Section 501. When the Company May Merge, etc.................................................... 81
Section 502. Successor Company Substituted...................................................... 82
ii
ARTICLE 6
REMEDIES
Section 601. Events of Default.................................................................. 82
Section 602. Acceleration of Maturity; Rescission and Annulment................................. 85
Section 603. Other Remedies; Collection Suit by Trustee......................................... 85
Section 604. Trustee May File Proofs of Claim................................................... 86
Section 605. Trustee May Enforce Claims Without Possession of Notes............................. 86
Section 606. Application of Money Collected..................................................... 86
Section 607. Limitation on Suits................................................................ 87
Section 608. Unconditional Right of Holders to Receive Principal, Premium and
Interest........................................................................... 87
Section 609. Restoration of Rights and Remedies................................................. 88
Section 610. Rights and Remedies Cumulative..................................................... 88
Section 611. Delay or Omission Not Waiver....................................................... 88
Section 612. Control by Holders................................................................. 88
Section 613. Waiver of Past Defaults............................................................ 89
Section 614. Undertaking for Costs.............................................................. 89
Section 615. Waiver of Stay, Extension or Usury Laws............................................ 89
ARTICLE 7
THE TRUSTEE
Section 701. Certain Duties and Responsibilities................................................ 90
Section 702. Notice of Defaults................................................................. 91
Section 703. Certain Rights of Trustee.......................................................... 91
Section 704. Not Responsible for Recitals or Issuance of Notes.................................. 92
Section 705. May Hold Notes..................................................................... 93
Section 706. Money Held in Trust................................................................ 93
Section 707. Compensation and Reimbursement..................................................... 93
Section 708. Conflicting Interests.............................................................. 94
Section 709. Corporate Trustee Required; Eligibility............................................ 94
Section 710. Resignation and Removal; Appointment of Successor.................................. 94
Section 711. Acceptance of Appointment by Successor............................................. 95
Section 712. Merger, Conversion, Consolidation or Succession to Business........................ 96
Section 713. Preferential Collection of Claims Against the Company.............................. 96
Section 714. Appointment of Authenticating Agent................................................ 96
iii
ARTICLE 8
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND THE COMPANY
Section 801. The Company to Furnish Trustee Names and Addresses of Holders...................... 97
Section 802. Preservation of Information; Communications to Holders............................. 97
Section 803. Reports by Trustee................................................................. 98
ARTICLE 9
AMENDMENT, SUPPLEMENT OR WAIVER
Section 901. Without Consent of Holders......................................................... 98
Section 902. With Consent of Holders............................................................ 98
Section 903. Execution of Amendments, Supplements or Waivers.................................... 100
Section 904. Revocation and Effect of Consents.................................................. 100
Section 905. Conformity with TIA................................................................ 101
Section 906. Notation on or Exchange of Notes................................................... 101
ARTICLE 10
REDEMPTION OF NOTES
Section 1001. Right of Redemption................................................................ 101
Section 1002. Applicability of Article........................................................... 102
Section 1003. Election to Redeem; Notice to Trustee.............................................. 102
Section 1004. Selection by Trustee of Notes to Be Redeemed....................................... 102
Section 1005. Notice of Redemption............................................................... 103
Section 1006. Deposit of Redemption Price........................................................ 103
Section 1007. Notes Payable on Redemption Date................................................... 104
Section 1008. Notes Redeemed in Part............................................................. 104
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 1101. Satisfaction and Discharge of Indenture............................................ 104
Section 1102. Application of Trust Money......................................................... 106
iv
ARTICLE 12
DEFEASANCE OR COVENANT DEFEASANCE
Section 1201. The Company's Option to Elect Defeasance or Covenant Defeasance.................... 106
Section 1202. Defeasance and Discharge........................................................... 106
Section 1203. Covenant Defeasance................................................................ 107
Section 1204. Conditions to Defeasance or Covenant Defeasance.................................... 107
Section 1205. Deposited Money and U.S. Government Obligations To Be Held in Trust; Other
Miscellaneous Provisions........................................................... 109
Section 1206. Reinstatement...................................................................... 109
Section 1207. Repayment to the Company........................................................... 110
ARTICLE 13
SUBSIDIARY GUARANTEES
Section 1301. Guarantees Generally............................................................... 110
Section 1302. Continuing Guarantees.............................................................. 112
Section 1303. Release of Subsidiary Guarantees................................................... 112
Section 1304. Agreement to Subordinate........................................................... 113
Section 1305. Waiver of Subrogation.............................................................. 113
Section 1306. Notation Not Required.............................................................. 113
Section 1307. Successors and Assigns of the Subsidiary Guarantors................................ 113
Section 1308. Execution and Delivery of Subsidiary Guarantees.................................... 113
Section 1309. Notices............................................................................ 114
ARTICLE 14
SUBORDINATION
Section 1401. Agreement To Subordinate........................................................... 114
Section 1402. Liquidation, Dissolution, Bankruptcy............................................... 114
Section 1403. Default on Designated Senior Indebtedness.......................................... 115
Section 1404. Acceleration of Payment of Notes................................................... 115
Section 1405. When a Distribution Must Be Paid Over.............................................. 116
Section 1406. Subrogation........................................................................ 116
Section 1407. Relative Rights.................................................................... 116
Section 1408. Subordination May Not Be Impaired by Issuers....................................... 116
Section 1409. Rights of Trustee and Paying Agent................................................. 116
Section 1410. Distribution or Notice to Representative........................................... 117
v
Section 1411. Article 14 Not To Prevent Events of Default or Limit Right To Accelerate........... 117
Section 1412. Trust Moneys and Permitted Junior Securities Not Subordinated...................... 117
Section 1413. Trustee Entitled To Rely........................................................... 117
Section 1414. Trustee To Effectuate Subordination................................................ 118
Section 1415. Trustee Not Fiduciary for Holders of Senior Indebtedness........................... 118
Section 1416. Reliance by Holders of Senior Indebtedness on Subordination Provisions............. 118
Section 1417. Trustee's Compensation Not Prejudiced.............................................. 118
ARTICLE 15
SUBORDINATION OF SUBSIDIARY GUARANTEES
Section 1501. Agreement To Subordinate........................................................... 119
Section 1502. Liquidation, Dissolution, Bankruptcy............................................... 119
Section 1503. Default on Designated Guarantor Senior Indebtedness................................ 119
Section 1504. Acceleration of Payment of Notes................................................... 120
Section 1505. When a Distribution Must Be Paid Over.............................................. 121
Section 1506. Subrogation........................................................................ 121
Section 1507. Relative Rights.................................................................... 121
Section 1508. Subordination May Not Be Impaired by Subsidiary Guarantors......................... 121
Section 1509. Rights of Trustee and Paying Agent................................................. 122
Section 1510. Distribution or Notice to Representative........................................... 122
Section 1511. Article 15 Not To Prevent Events of Default or Limit Right To Accelerate........... 122
Section 1512. Trust Moneys Not Subordinated...................................................... 123
Section 1513. Trustee Entitled To Rely........................................................... 123
Section 1514. Trustee To Effectuate Subordination................................................ 123
Section 1515. Trustee Not Fiduciary for Holders of Guarantor Senior Indebtedness................. 123
Section 1516. Reliance by Holders of Senior Indebtedness on Subordination Provisions............. 124
Section 1517. Trustee's Compensation Not Prejudiced.............................................. 124
Exhibit A Form of Note
Exhibit B Form of Supplemental Indenture
Exhibit C Form of Institutional Accredited Investor Certificate
Exhibit D Form of Regulation S Certificate
Exhibit E Form of Certificate of Beneficial Ownership
Schedule 1 Existing Joint Ventures
Schedule 2 Seller Notes
vi
Certain Sections of this Indenture relating to Sections 310 through 318
inclusive of theTrust Indenture Act of 1939:
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
ss.310(a)(1)......................................... 709
(a)(2)........................................ 709
(a)(3)........................................ Not Applicable
(a)(4)........................................ Not Applicable
(b)........................................... 708
ss.311(a)............................................ 713
(b)........................................... 713
(b)(2)........................................ 803
803
ss.312(a)............................................ 801
802
(b)........................................... 802
(c)........................................... 802
ss.313(a)............................................ 803
(b)........................................... 803
(c)........................................... 803
803
(d)........................................... 803
ss.314(a)............................................ 404
(a)(4)........................................ 102
405
(b)........................................... Not Applicable
(c)(1)........................................ 102
(c)(2)........................................ 102
(c)(3)........................................ Not Applicable
(d)........................................... Not Applicable
(e)........................................... 102
ss.315(a)............................................ 701
(b)........................................... 702
803
(c)........................................... 701
(d)........................................... 701
vii
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
(d)(1)........................................ 701
(d)(2)........................................ 701
(d)(3)........................................ 701
(e)........................................... 614
ss.316(a)............................................ 101
612
(a)(1)(A)..................................... 602
612
(a)(1)(B)..................................... 613
(a)(2)........................................ Not Applicable
(b)........................................... 608
(c)........................................... 104
ss.317(a)(1)......................................... 603
(a)(2)........................................ 604
(b)........................................... 403
ss.318(a)............................................ 107
- ----------------------
This cross-reference table shall not for any purpose be deemed to be part of
this Indenture.
viii
INDENTURE, dated as of June 11, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Indenture"), among Select Medical Corporation,
---------
a Delaware corporation, the Subsidiary Guarantors (as defined herein) and State
Street Bank and Trust Company, a Massachusetts trust company, as trustee.
RECITALS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Notes. On the date hereof, all
Domestic Subsidiaries of the Company, other than Existing Joint Venture
Subsidiaries, are Subsidiary Guarantors. Each Subsidiary Guarantor has duly
authorized the execution and delivery of this Indenture to provide for its
guarantee of the Notes, as provided in this Indenture. Each Subsidiary Guarantor
has received good and valuable consideration for its execution and delivery of
this Indenture and its guarantee of the Notes.
All things necessary to make the Original Notes, when executed and
delivered by the Company and authenticated and delivered by the Trustee
hereunder and duly issued by the Company, the valid obligation of the Company,
and to make this Indenture a valid agreement of each of the Company and each
Subsidiary Guarantor as of the date hereof, in accordance with the terms of the
Original Notes and this Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually agreed, for the equal and ratable benefit of
all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
---------------------------------
Section 101. Definitions.
-----------
"Additional Assets" means:
-----------------
(1) any property or assets (other than Indebtedness and Capital
Stock) to be used by the Company or a Restricted Subsidiary in a Related
Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or a Restricted Subsidiary of the Company; or
(3) Capital Stock constituting a minority interest in any Person that
at such time is a Restricted Subsidiary of the Company;
provided, however, that, in the case of clauses (2) and (3), such Restricted
- -------- -------
Subsidiary is not engaged in any business other than a Related Business.
"Additional Notes" means any notes issued under this Indenture in addition
----------------
to the Original Notes (other than any Notes issued pursuant to Section 304, 305,
----------- ---
306, 312(c), 312(d) or 1008).
- --- ------ ------ ----
"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 the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
-------
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing;
----------- ----------
provided that beneficial ownership of 10% or more of the Voting Stock of a
- --------
Person shall be deemed to be control.
"Asset Disposition" means any direct or indirect sale, lease, transfer,
-----------------
issuance or other disposition, or a series of related sales, leases, transfers,
issuances or dispositions, of shares of Capital Stock of a Subsidiary (other
than directors' qualifying shares to the extent required by applicable law),
property or other assets (each referred to for the purposes of this definition
as a "disposition") by the Company or any of its Restricted Subsidiaries,
including any disposition by means of a merger, consolidation or similar
transaction.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary;
(2) the sale of cash or Cash Equivalents in the ordinary course of
business;
(3) a disposition of inventory in the ordinary course of business;
(4) a disposition of obsolete or worn out equipment or equipment that is
no longer useful in the conduct of the business of the Company and its
Restricted Subsidiaries and that in each case is disposed of in the
ordinary course of business;
(5) transactions governed by and permitted under Article 5;
---------
(6) an issuance of Capital Stock by a Restricted Subsidiary of the Company
to the Company or to a Wholly-Owned Subsidiary;
2
(7) for purposes of Section 410 only, the making of a disposition governed
-----------
by and subject to Section 408;
-----------
(8) any disposition or series of related dispositions of assets with an
aggregate fair market value, and for net proceeds, of less than $1.0
million; and
(9) the licensing or sublicensing of intellectual property or other
general intangibles and any license, lease or sublease of other
property, in each case that is in the ordinary course of business and
does not materially interfere with the business of the Company and its
Restricted Subsidiaries.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
-------------------------
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Notes, compounded semi-annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Authenticating Agent" means any Person authorized by the Trustee pursuant
--------------------
to Section 714 to act on behalf of the Trustee to authenticate Notes of one or
-----------
more series.
"Average Life" means, as of the date of determination, with respect to any
------------
Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum
-
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (2) the sum of all such payments.
-
"Bank Indebtedness" means any and all amounts, whether outstanding on the
-----------------
Issue Date or Incurred after the Issue Date, payable under or in respect of the
Senior Credit Agreement and any related notes, collateral documents, letters of
credit and guarantees and any Interest Rate Agreement entered into in connection
with the Senior Credit Agreement, including principal, any premium, interest
(including interest accruing after or that would accrue but for the filing of
any petition in bankruptcy or for reorganization relating to the Company or any
Subsidiary thereof at the rate specified therein whether or not a claim for post
filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and all other amounts payable thereunder
or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors of
------------------
such Person.
"Business Day" means a day other than a Saturday, Sunday or other day on
------------
which commercial banking institutions are authorized or required by law to close
in New York City.
3
"Capital Stock" of any Person means any and all shares, interests, rights
-------------
to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities exchangeable for or convertible into
such equity.
"Capitalized Lease Obligation" means an obligation that is required to be
----------------------------
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation will be the capitalized amount of such obligation at the time
any determination thereof is to be made as determined in accordance with GAAP,
and the Stated Maturity thereof will be the date of the last payment of rent or
any other amount due under such lease prior to the first date such lease may be
terminated without penalty.
"Cash Equivalents" means:
----------------
(1) securities issued or directly and fully guaranteed or insured by the
United States Government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is
pledged in support thereof), having maturities of not more than one
year from the date of acquisition;
(2) marketable general obligations issued by any state of the United
States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the
date of acquisition thereof (provided that the full faith and credit
of the United States is pledged in support thereof) and, at the time
of acquisition thereof, having one of the two highest credit ratings
obtainable from both S&P and Moody's;
(3) certificates of deposit, time deposits, eurodollar time deposits,
overnight bank deposits or bankers' acceptances having maturities of
not more than one year from the date of acquisition thereof issued by
any commercial bank organized in the United States of America, the
long-term debt of which is rated at the time of acquisition thereof in
one of the two highest categories obtainable from both S&P and
Moody's, and having combined capital and surplus in excess of $500.0
million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (1), (2) and
(3) entered into with any bank meeting the qualifications specified in
clause (3) above;
(5) commercial paper rated at the time of acquisition thereof in one of
the two highest categories obtainable from both S&P and Moody's, or
carrying an equivalent rating by a nationally recognized rating
agency, if both of the
4
two named rating agencies cease publishing ratings of investments, and
in any case maturing within one year after the date of acquisition
thereof; and
(6) interests in any investment company or money market fund which invests
solely in instruments of the type specified in clauses (1) through (5)
above.
"Change of Control" means:
-----------------
(1) any "person" or "group" of related persons (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that such person or group
shall be deemed to have "beneficial ownership" of all shares that any
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly
or indirectly, of more than 35% of the total voting power of the
Voting Stock of the Company (or its successor by merger, consolidation
or purchase of all or substantially all of its assets) (for the
purposes of this clause, such person or group shall be deemed to
beneficially own any Voting Stock of the Company held by an entity, if
such person or group "beneficially owns" (as defined above), directly
or indirectly, more than 35% of the voting power of the Voting Stock
of such entity; or
(2) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or
(3) the 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 Restricted Subsidiaries taken as a whole to any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act); or
(4) the adoption by the stockholders of the Company of a plan or proposal
for the liquidation or dissolution of the Company.
"Clearstream" means Clearstream Banking, societe anonyme (formerly
-----------
Cedelbank).
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company" means, Select Medical Corporation, a Delaware corporation, and
-------
any successor thereto.
5
"Company Request," "Company Order" and "Company Consent" mean,
--------------- ------------- ---------------
respectively, a written request, order or consent signed in the name of the
Company by two Officers of the Company.
"Consolidated Coverage Ratio" means as of any date of determination, with
---------------------------
respect to any Person, the ratio of (x) the aggregate amount of Consolidated
-
EBITDA of such Person for the period of the most recent four consecutive fiscal
quarters ending prior to the date of such determination for which consolidated
financial statements of the Company have been delivered to the Trustee in
accordance with Section 404 to (y) Consolidated Interest Expense for such four
----------- -
fiscal quarters, provided, however, that:
-------- -------
(1) if the Company or any Restricted Subsidiary:
(a) has Incurred any Indebtedness since the beginning of such period
that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, Consolidated
EBITDA and Consolidated Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the
first day of such period (except that in making such computation,
the amount of Indebtedness under any revolving credit facility
outstanding on the date of such calculation will be computed
based on (i) the average daily balance of such Indebtedness
-
during such four fiscal quarters or such shorter period for which
such facility was outstanding or (ii) if such facility was
--
created after the end of such four fiscal quarters, the average
daily balance of such Indebtedness during the period from the
date of creation of such facility to the date of such
calculation) and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds
of such new Indebtedness as if such discharge had occurred on the
first day of such period; or
(b) has repaid, repurchased, defeased or otherwise discharged any
Indebtedness since the beginning of the period that is no longer
outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage
Ratio involves a discharge of Indebtedness (in each case other
than Indebtedness incurred under any revolving credit facility
unless such Indebtedness has been permanently repaid and the
related commitment terminated), Consolidated EBITDA and
Consolidated Interest Expense for such period will be calculated
after giving effect on a pro forma basis to such discharge of
such Indebtedness, including with the proceeds of such new
6
Indebtedness, as if such discharge had occurred on the first day
of such period;
(2) if since the beginning of such period the Company or any Restricted
Subsidiary will have made any Asset Disposition or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio
is an Asset Disposition:
(a) the Consolidated EBITDA for such period will be reduced by an
amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset
Disposition for such period or increased by an amount equal to
the Consolidated EBITDA (if negative) directly attributable
thereto for such period; and
(b) Consolidated Interest Expense for such period will be reduced by
an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged
with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary so
long as the Company and its continuing Restricted Subsidiaries
have been completely and unconditionally released from all
liability with respect to such Indebtedness after such sale);
(3) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) will have made an Investment in
any Restricted Subsidiary (or any Person that becomes a Restricted
Subsidiary or is merged with or into the Company) or an acquisition of
assets, including any acquisition of assets occurring in connection
with a transaction causing a calculation to be made hereunder, that
constitutes all or substantially all of an operating unit, division or
line of business, Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such
period; and
(4) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company
or any Restricted Subsidiary since the beginning of such period) will
have made any Asset Disposition or any Investment or acquisition of
assets that
7
would have required an adjustment pursuant to clause (2) or (3) above
if made by the Company or a Restricted Subsidiary during such period,
Consolidated EBITDA and Consolidated Interest Expense for such period
will be calculated after giving pro forma effect thereto as if such
Asset Disposition or Investment or acquisition of assets occurred on
the first day of such period.
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness will be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated EBITDA" for any period means, without duplication, the
-------------------
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) Consolidated Income Taxes;
(3) consolidated depreciation expense;
(4) consolidated amortization of intangibles;
(5) minority interest in consolidated subsidiary companies (minus the
amount of any mandatory cash distribution with respect to any minority
interest other than in connection with a proportionate discretionary
cash distribution with respect to the interest held by the Company or
any Restricted Subsidiary); and
(6) other non-cash charges reducing Consolidated Net Income (excluding any
such non-cash charge to the extent it represents an accrual of or
reserve for cash charges in any future period or amortization of a
prepaid cash expense that was paid in a prior period not included in
the calculation).
Notwithstanding the preceding sentence, clauses (2) through (6) relating to
amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net
Income to compute Consolidated EBITDA of such Person only to the extent (and in
the same proportion) that the net income (loss) of such Restricted Subsidiary
was included in calculating the Consolidated Net Income of such Person and, to
the extent the amounts set forth in clauses (2) through (6) are in excess of
those necessary to offset a net loss of such Restricted Subsidiary or if such
Restricted Subsidiary has net income for such period included in Consolidated
Net Income, only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such
8
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Income Taxes" means, with respect to any Person for any
-------------------------
period, taxes imposed upon such Person or other payments required to be made by
such Person by any governmental authority, which taxes or other payments are
calculated by reference to the income or profits of such Person or such Person
and its Restricted Subsidiaries (to the extent such income or profits were
included in computing Consolidated Net Income for such period), regardless of
whether such taxes or payments are required to be remitted to any governmental
authority.
"Consolidated Interest Expense" means, for any period, the total interest
-----------------------------
expense of the Company and its consolidated Restricted Subsidiaries, whether
paid or accrued, plus, to the extent not included in such interest expense:
(1) interest expense attributable to Capitalized Lease Obligations and the
interest portion of rent expense associated with Attributable
Indebtedness in respect of the relevant lease giving rise thereto,
determined as if such lease were a capitalized lease in accordance
with GAAP and the interest component of any deferred payment
obligations;
(2) amortization of debt discount;
(3) non-cash interest expense;
(4) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing;
(5) the interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries;
(6) net costs associated with Hedging Obligations (including amortization
of fees);
(7) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period;
(8) the product of (a) all dividends paid or payable in cash, Cash
-
Equivalents or Indebtedness or accrued during such period on any
series of Disqualified Stock of such Person or on Preferred Stock of
its Restricted Subsidiaries, payable to a Person other than the
Company or a Wholly-Owned Subsidiary (excluding, in the case of the
Company, dividends paid
9
prior to the Issue Date on its Class A or Class B preferred stock
outstanding on April 4, 2001), times (b) a fraction, the numerator of
-
which is one and the denominator of which is one minus the then
current combined federal, state, provincial and local statutory tax
rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP; and
(9) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust; provided,
--------
however, that there will be excluded therefrom any such interest
-------
expense of any Unrestricted Subsidiary to the extent the related
Indebtedness is not Guaranteed or paid by the Company or any
Restricted Subsidiary.
For purposes of the foregoing, total interest expense will be determined
after giving effect to any net payments made or received by the Company and
its Subsidiaries with respect to Interest Rate Agreements.
"Consolidated Net Income" means, for any period, the net income (loss) of
-----------------------
the Company and its consolidated Restricted Subsidiaries determined in
accordance with GAAP; provided, however, that there will not be included in such
-------- -------
Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that:
(a) subject to the limitations contained in clauses (4), (5) and (6)
below, the Company's equity in the net income of any such Person
for such period will be included in such Consolidated Net Income
up to the aggregate amount of cash that could have been
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (3)
below); and
(b) the Company's equity in a net loss of any such Person (other than
an Unrestricted Subsidiary) for such period will be included in
determining such Consolidated Net Income;
(2) any net income (loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
10
(3) any net income (but not loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that:
(a) subject to the limitations contained in clauses (4), (5) and (6)
below, the Company's equity in the net income of any such
Restricted Subsidiary for such period will be included in such
Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a
dividend (subject, in the case of a dividend to another
Restricted Subsidiary, to the limitation contained in this
clause); and
(b) the Company's equity in a net loss of any such Restricted
Subsidiary for such period will be included in determining such
Consolidated Net Income;
(4) any gain (loss) realized upon the sale or other disposition of any
property, plant or equipment of the Company or its consolidated
Restricted Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) that is not sold or otherwise disposed of in the ordinary
course of business and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(5) any extraordinary gain or loss; and
(6) the cumulative effect of a change in accounting principles.
"Continuing Directors" means, as of any date of determination, any member
---------------------
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the Indenture;
or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Corporate Trust Office" means the office of the Trustee or an Affiliate of
----------------------
the Trustee in the Borough of Manhattan, the City of New York, at which at any
particular time its corporate trust business shall be administered, which office
on the Issue Date is located at 61 Broadway, 15th Floor, New York, New York
10006.
11
"Currency Agreement" means, in respect of a Person, any foreign exchange
------------------
contract, currency swap agreement or other similar agreement or arrangements as
to which such Person is a party or a beneficiary.
"Default" means any event that is, or after notice or passage of time or
-------
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
----------
successors.
"Designated Guarantor Senior Indebtedness" means any obligation of a
----------------------------------------
Subsidiary Guarantor with respect to the Bank Indebteness.
"Designated Senior Indebtedness" means the Bank Indebtedness.
------------------------------
"Disqualified Stock" means, with respect to any Person, any Capital Stock
------------------
of such Person that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock
(excluding Capital Stock that is convertible or exchangeable solely at
the option of the Company or a Restricted Subsidiary); or
(3) is redeemable at the option of the holder of the Capital Stock, in
whole or in part,
in each case on or prior to the date that is 91 days after the date (a) on
-
which the Notes mature or (b) on which there are no Notes outstanding.
-
"Domestic Subsidiary" means any Restricted Subsidiary that is organized
-------------------
under the laws of, or conducts a majority of its business or operations in, the
United States of America or any state thereof or the District of Columbia.
"EBITDA" for any period means, without duplication, the net income (loss)
------
of the Company and its Subsidiaries on a combined basis, plus the following to
the extent deducted in calculating such net income (loss), in each case
determined in accordance with GAAP: (1) total interest expense, whether paid or
-
accrued, (2) taxes imposed upon income or profits included in such net income
-
(loss), (3) depreciation expense, (4) amortization of intangibles and (5) other
- - -
non-cash charges reducing such net income (excluding any such non-cash charge to
the extent it represents an accrual of or reserve for cash charges in any future
period or amortization of a prepaid cash expense that was paid in a prior period
not included in the calculation).
12
"Equity Offering" means an underwritten primary public offering for cash by
---------------
the Company of its common stock, or options, warrants or rights with respect to
its common stock, pursuant to an effective registration statement under the
Securities Act (whether alone or in connection with any secondary public
offering).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange and Registration Rights Agreement" means the Exchange and
------------------------------------------
Registration Rights Agreement dated June 11, 2001, among Select Medical
Corporation, each of the Subsidiary Guarantors listed on Schedule I thereto,
J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Credit Suisse First Boston Corporation, CIBC World Markets Corp. and First Union
Securities, Inc.
"Exchange Notes" means the Company's 9 1/2% Senior Subordinated Notes Due
--------------
2009, containing terms identical to the Initial Notes or any Initial Additional
Notes (except that (i) such Exchange Notes shall not contain terms with respect
to transfer restrictions and shall be registered under the Securities Act, and
(ii) certain provisions relating to an increase in the stated rate of interest
thereon shall be eliminated), that are issued and exchanged for (a) the Initial
Notes, as provided for in the Exchange and Registration Rights Agreement, or (b)
such Initial Additional Notes as may be provided in any registration rights
agreement relating to such Additional Notes and this Indenture (including any
amendment or supplement hereto).
"Existing Joint Venture Subsidiary" means any Domestic Subsidiary in
---------------------------------
existence on the Issue Date that is not engaged in any business other than a
Related Business and is not "100% owned" (as defined in Section 3-10(h)(1) of
Regulation S-X (Title 17, Code of Federal Regulations, Part 210)) by the
Company, and is listed on Schedule 1 to this Indenture.
"Foreign Subsidiary" means any Restricted Subsidiary that is not a Domestic
------------------
Subsidiary.
"GAAP" means generally accepted accounting principles in the United States
----
of America as in effect as of the date of the Indenture, including those 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 approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
the Indenture will be computed in conformity with GAAP.
13
"Guarantee" means any obligation, contingent or otherwise, of any Person
---------
directly or indirectly guaranteeing or in effect guaranteeing any Indebtedness
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the obligee
of such Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" will not include endorsements for
- -------- -------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor Senior Indebtedness" means, with respect to a Subsidiary
-----------------------------
Guarantor, the following whether outstanding on the Issue Date or thereafter
issued, created, Incurred or assumed, without duplication:
(1) the Bank Indebtedness Incurred by such Subsidiary Guarantor;
(2) all Guarantees by such Subsidiary Guarantor of Senior Indebtedness of
the Company or Guarantor Senior Indebtedness of any other Subsidiary
Guarantor; and
(3) all obligations consisting of principal of, premium on, if any,
accrued and unpaid interest on, and fees and other amounts relating
to, all other Indebtedness of the Subsidiary Guarantor.
Guarantor Senior Indebtedness includes interest accruing after, or that
would accrue but for, the filing of any petition in bankruptcy or for
reorganization relating to the Subsidiary Guarantor at the rate specified in the
documentation with respect thereto, whether or not post-filing interest is
allowed in such proceeding.
Notwithstanding anything to the contrary in the preceding paragraph,
Guarantor Senior Indebtedness will not include:
(1) any Indebtedness with respect to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it
is provided that the obligations in respect of such Indebtedness are
not superior in right of, or are subordinate to, payment of the Notes
or any Subsidiary Guarantee;
14
(2) any obligations of such Subsidiary Guarantor to another Subsidiary or
to the Company;
(3) any liability for Federal, state, local, foreign or other taxes owed
or owing by such Subsidiary Guarantor;
(4) any accounts payable or other liability to trade creditors arising in
the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities);
(5) any Indebtedness, Guarantee or obligation of such Subsidiary Guarantor
that is subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of such Subsidiary Guarantor,
including, without limitation, any Guarantor Senior Subordinated
Indebtedness and Guarantor Subordinated Obligations of such Guarantor;
(6) any obligations in respect of Capital Stock or Attributable
Indebtedness;
(7) any Indebtedness Incurred in violation of this Indenture; or
(8) any Indebtedness described in the last paragraph of the definition of
the term "Indebtedness."
"Guarantor Senior Subordinated Indebtedness" means, with respect to a
------------------------------------------
Subsidiary Guarantor, the obligations of such Subsidiary Guarantor under the
Subsidiary Guarantee and any other Indebtedness of such Subsidiary Guarantor
(whether outstanding on the Issue Date or thereafter Incurred) that specifically
provides that such Indebtedness is to rank equally in right of payment with the
obligations of such Subsidiary Guarantor under the Subsidiary Guarantee and is
not subordinated in right of payment to any Indebtedness of such Subsidiary
Guarantor that is not Guarantor Senior Indebtedness of such Subsidiary
Guarantor.
"Guarantor Subordinated Obligations" means, with respect to a Subsidiary
----------------------------------
Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on
the Issue Date or thereafter Incurred) that is subordinate or junior in right of
payment to the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee (including without limitation each of the seller notes identified on
Schedule 2).
"Hedging Obligations" of any Person means the obligations of such Person
-------------------
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
------ -- ----------
registered in the Note Register.
15
"Incur" means issue, create, assume, Guarantee, incur or otherwise become
-----
liable for; provided, however, that any Indebtedness or Capital Stock of a
-------- -------
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) will be deemed to be
Incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary; and the terms "Incurred" and "Incurrence" have meanings correlative
to the foregoing.
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication):
(1) the principal of and premium, if any, in respect of indebtedness of
such Person for borrowed money;
(2) the principal of and premium, if any, in respect of obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments;
(3) all obligations of such Person in respect of letters of credit,
bankers' acceptances or other similar instruments (including
reimbursement obligations with respect thereto except to the extent
such reimbursement obligation relates to a trade payable and such
obligation is satisfied within 10 days of Incurrence);
(4) all obligations of such Person to pay the deferred and unpaid purchase
price of property (or services), which purchase price is due more than
six months after the date of placing such property in service or
taking delivery and title thereto or completion of such services;
(5) Capitalized Lease Obligations and all Attributable Indebtedness of
such Person;
(6) all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with
respect to any Subsidiary, any Preferred Stock (but excluding, in each
case, any accrued dividends);
(7) Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness will be the
-------- -------
lesser of (a) the fair market value of such asset at such date of
-
determination and (b) the amount of such Indebtedness of such other
-
Persons;
(8) Indebtedness of other Persons to the extent Guaranteed by such Person;
and
16
(9) to the extent not otherwise included in this definition, net
obligations of such Person under Currency Agreements and Interest Rate
Agreements (the amount of any such obligations to be equal at any time
to the termination value of such agreement or arrangement giving rise
to such obligation that would be payable by such Person at such time).
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
In addition, "Indebtedness" of any Person shall include Indebtedness of a
------------
type described in the preceding paragraph that would not appear as a liability
on the balance sheet of such Person if:
(1) such Indebtedness is the obligation of a partnership or joint venture
that is not a Restricted Subsidiary (a "Joint Venture");
-------------
(2) such Person or a Restricted Subsidiary of such Person is a general
partner of the Joint Venture (a "General Partner"); and
---------------
(3) there is recourse, by contract or operation of law, with respect to
the payment of such Indebtedness to property or assets of such Person
or a Restricted Subsidiary of such Person;
and then such Indebtedness shall be included in an amount not to exceed:
(a) the lesser of (i) the net assets of the General Partner and (ii)
the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or
assets of such Person or a Restricted Subsidiary of such Person;
or
(b) if less than the amount determined pursuant to clause (a)
immediately above, the actual amount of such Indebtedness that is
recourse to such Person or a Restricted Subsidiary of such
Person, if the Indebtedness is evidenced by a writing and is for
a determinable amount and the related interest expense shall be
included in Consolidated Interest Expense.
"Initial Additional Notes" means Additional Notes issued in an offering not
------------------------
registered under the Securities Act.
"Initial Notes" means the Company's 9 1/2% Senior Subordinated Notes Due
-------------
2009, issued on the Issue Date (and any Notes issued in respect thereof pursuant
to Section 304, 305, 306, 312(c), 312(d) or 1008).
----------- --- --- ------ ------ -----
17
"Interest Payment Date" means, when used with respect to any Note and any
---------------------
installment of interest thereon, the date specified in such Note as the fixed
date on which such installment of interest is due and payable, as set forth in
such Note.
"Interest Rate Agreement" means, with respect to any Person, any interest
-----------------------
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"Investment" means, with respect to any Person, all investments by such
----------
Person in other Persons (including Affiliates) including (a) any direct or
indirect advance, loan (other than advances to customers in the ordinary course
of business) or other extension of credit (including by way of Guarantee or
similar arrangement, but excluding any bank deposit (other than a time deposit)
in the ordinary course of business, to the extent the same may be deemed an
extension of credit to the depository bank) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued by, any other
Person, and (b) all other items that are or would be classified as investments
on a balance sheet prepared in accordance with GAAP.
For purposes of Section 408,
-----------
(1) "Investment" will include the portion (proportionate to the Company's
equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets
(computed excluding any liability or obligation owing to the Company
or any Restricted Subsidiary) of such Restricted Subsidiary of the
Company at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation
-------- -------
of such Subsidiary as a Restricted Subsidiary, the Company will be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (a) the Company's
-
"Investment" in such Subsidiary at the time of such redesignation less
(b) the portion (proportionate to the Company's equity interest in
-
such Subsidiary) of the fair market value of the net assets (as
determined by the Board of Directors of the Company in good faith, as
evidenced by a resolution in writing delivered to the Trustee) of such
Subsidiary at the time that such Subsidiary is so re-designated a
Restricted Subsidiary;
(2) any property transferred to or from an Unrestricted Subsidiary will be
valued at its fair market value at the time of such transfer, in each
case as determined in good faith by the Board of Directors of the
Company; and
18
(3) if the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Voting Stock of any Restricted Subsidiary of
the Company such that, after giving effect to any such sale or
disposition, such entity is no longer a Subsidiary of the Company, the
Company shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the fair market value (as determined
by the Board of Directors of the Company in good faith, as evidenced
by a resolution in writing delivered to the Trustee) of the Capital
Stock of such Subsidiary not sold or disposed of (computed excluding
any liability or obligation owing to the Company or any Restricted
Subsidiary).
"Issue Date" means the first date on which the Notes are originally issued.
----------
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
----
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Moody's" means Moody's Investor Service, Inc. and its successors.
-------
"Net Available Cash" from an Asset Disposition means cash payments received
------------------
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received) therefrom, in each case net of:
(1) all legal, accounting, investment banking, title and recording tax
expenses, commissions and other fees and expenses reasonably incurred,
and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP (after taking into
account any available tax credits or deductions and any tax sharing
agreements), as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness that is secured by any assets
subject to such Asset Disposition, in accordance with and as required
by the terms of any Lien upon such assets;
(3) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition; and
(4) the deduction of reasonable and appropriate amounts to be provided by
the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset
Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition (provided that upon any reduction or
reversal of any such
19
reserve, the amount of such resolution or reversal shall constitute
Net Available Cash).
"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
-----------------
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, listing fees,
discounts or commissions and brokerage, consultant and other fees and charges
reasonably incurred in connection with such issuance or sale and net of taxes
paid or payable as a result of such issuance or sale (after taking into account
any available tax credit or deductions and any tax sharing arrangements).
"New Joint Venture Subsidiary" means any Person acquired by the Company or
----------------------------
any Restricted Subsidiary after the Issue Date that (1) is a Domestic
-
Subsidiary, (2) is not engaged in any business other than a Related Business,
-
(3) is not "100% owned" (as defined in Section 3-10(h)(1) of Regulation S-X
-
(Title 17, Code of Federal Regulations, Part 210)) by the Company and (4) has no
-
Capital Stock owned by any Person other than the Company, a Subsidiary
Guarantor, a physician, a physician group, or one or more other medical
professionals.
"Non-Guarantor Subsidiary" means any Restricted Subsidiary that is not a
------------------------
Subsidiary Guarantor.
"Non-Recourse Debt" means Indebtedness:
-----------------
(1) as to which neither the Company nor any Restricted Subsidiary (a)
-
provides any Guarantee or credit support of any kind (including any
undertaking, guarantee, indemnity, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable (as a
-
guarantor or otherwise);
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(3) in the case of Indebtedness having a principal amount in excess of
$100,000 in the aggregate, the express terms of which provide there is
no recourse against any of the Company or its Restricted Subsidiaries
or any of their respective property or assets.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined in
---------------
Regulation S.
20
"Notes" means the Initial Notes, any Additional Notes, and the Exchange
-----
Notes.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
-------
President, the Chief Operating Officer, any Executive Vice President or Senior
Vice President, the Treasurer, Controller and Chief Accounting Officer or the
Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
---------------------
"Opinion of Counsel" means a written opinion from legal counsel who is
------------------
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
--------------
exchange therefor.
"Outstanding" when used with respect to Notes means, as of the date of
-----------
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
in trust for the Holders of such Notes, provided that, if such Notes are to
--------
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has
been made; and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture.
A Note does not cease to be Outstanding because the Company or any
Affiliate of the Company holds the Note, provided that in determining whether
--------
the Holders of the requisite amount of Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company or any Affiliate of the Company shall be disregarded and
deemed not to be Outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Trustee actually knows are so owned shall be so disregarded. Notes so owned that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right to
act with respect to such Notes and that the pledgee is not the Company or an
Affiliate of the Company.
21
"Paying Agent" means any Person authorized by the Company (including
------------
the Company and any of its Domestic Subsidiaries) to pay the principal of (and
premium, if any) or interest on any Notes on behalf of the Company.
"Permitted Holder" means any of Welsh, Carson, Anderson & Stowe VII,
----------------
L.P., Golder, Thoma, Cressey, Rauner, Inc., GTCR Golder Rauner, LLC, and their
respective investment fund Affiliates.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in:
(1) the Company;
(2) a Restricted Subsidiary or a Person that will, upon the making
of such Investment, become a Restricted Subsidiary; provided,
--------
however, that the primary business of such Person is a Related
-------
Business;
(3) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or
a Subsidiary Guarantor; provided, however, that such Person's
-------- -------
primary business is a Related Business;
(4) cash and Cash Equivalents;
(5) receivables owing to the Company or any Restricted Subsidiary
created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade
terms;
(6) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made in the
ordinary course of business;
(7) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such
Restricted Subsidiary;
(8) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to
the Company or any Restricted Subsidiary or in satisfaction of
judgments or pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of a debtor;
22
(9) Investments arising from the receipt of non-cash consideration
from an Asset Disposition that was made pursuant to and in
compliance with Section 410;
-----------
(10) Investments in existence on the Issue Date;
(11) Currency Agreements, Interest Rate Agreements and related
Hedging Obligations, which transactions or obligations are
Incurred in compliance with Section 406;
-----------
(12) Hedging Obligations entered into in the ordinary course of
business and in compliance with this Indenture;
(13) endorsements of negotiable instruments and documents in the
ordinary course of business; and
(14) assets, Capital Stock or other securities by the Company or a
Restricted Subsidiary to the extent the consideration therefor
consists solely of common stock of the Company (other than
Disqualified Stock).
"Permitted Junior Securities" means (1) Capital Stock of the Company or
--------------------------- -
any Subsidiary Guarantor or (2) debt securities of the Company or any Subsidiary
-
Guarantor that are subordinated to all Senior Indebtedness and any debt
securities issued in exchange for Senior Indebtedness to substantially the same
extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees
are subordinated to Senior Indebtedness and Guarantor Senior Indebtedness
pursuant to the Indenture.
"Permitted Liens" means, with respect to any Person:
---------------
(1) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws or similar legislation, or
good faith deposits in connection with bids, tenders,
contracts (other than for Indebtedness) or operating leases to
which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposit of cash or
United States government bonds to secure surety, performance
or appeal bonds to which such Person is a party, or deposits
as security for contested taxes or import or customs duties or
for the payment of rent, in each case in the ordinary course
of business;
(2) Liens imposed by law and arising in the ordinary course of
business, including carriers', warehousemen's and mechanics'
Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings if a reserve or other
appropriate provisions, if any, as shall be required by GAAP
shall have been made in respect thereof;
23
(3) Liens for taxes, assessments or other governmental charges not
yet subject to penalties for non-payment or which are being
contested in good faith by appropriate proceedings provided
appropriate reserves required pursuant to GAAP have been made
in respect thereof;
(4) encumbrances, easements or reservations of, or rights of
others for, licenses, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real properties
or liens incidental to the conduct of the business of such
Person or to the ownership of its properties that do not in
the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of
the business of the Company and its Restricted Subsidiaries;
(5) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under this Indenture,
secured by a Lien on the same property securing such Hedging
Obligation;
(6) leases and subleases of real property that do not materially
interfere with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;
(7) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review
of such judgment have not been finally terminated or the
period within which such proceedings may be initiated has not
expired;
(8) Liens arising solely by virtue of any statutory or common law
provisions relating to banker's Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other
funds maintained with a depositary institution; provided that:
(a) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against
access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board;
and
(b) such deposit account is not intended by the Company or
any Restricted Subsidiary to provide collateral to
the depository institution;
(9) Liens on property or shares of stock of a Person at the time
such Person becomes a Restricted Subsidiary; provided,
--------
however, that such Liens are
-------
24
not created, incurred or assumed in connection with, or in
contemplation of, such other Person becoming a Restricted
Subsidiary; provided further, however, that any such Lien may
-------- ------- -------
not extend to any other property owned by the Company or any
Restricted Subsidiary;
(10) Liens on property at the time the Company or a Restricted
Subsidiary acquired the property, including any acquisition by
means of a merger or consolidation with or into the Company or
any Restricted Subsidiary; provided, however, that such Liens
-------- -------
are not created, incurred or assumed in connection with, or in
contemplation of, such acquisition; provided further, however,
-------- ------- -------
that such Liens may not extend to any other property owned by
the Company or any Restricted Subsidiary;
(11) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or a Subsidiary
Guarantor;
(12) Liens securing the Notes and the Subsidiary Guarantees; and
(13) Liens securing Refinancing Indebtedness incurred to refinance
Indebtedness that was previously so secured, provided that any
such Lien is limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends
or distributions in respect thereof) that secured (or, under
the written arrangements under which the original Lien arose,
could secure) the Indebtedness being refinanced.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, limited liability company, trust,
unincorporated organization, limited liability company, government or any agency
or political subdivision thereof or any other entity.
"Place of Payment" means a city or any political subdivision thereof
----------------
referred to in Article 3 and initially designated under Section 402.
--------- -----------
"Predecessor Notes" of any particular Note means every previous Note
-----------------
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in lieu of a mutilated, destroyed,
-----------
lost or stolen Note shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Note.
"Preferred Stock" as applied to the Capital Stock of any Person means
---------------
Capital Stock of any class or classes (however designated) that is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person.
25
"Purchase Money Indebtedness" means Indebtedness:
---------------------------
(1) consisting of the deferred purchase price of property,
conditional sale obligations, obligations under any title
retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar
Indebtedness, in each case where the maturity of such
Indebtedness does not exceed the anticipated useful life of
the asset being financed; and
(2) incurred to finance the acquisition by the Company or a
Restricted Subsidiary of such asset, including additions and
improvements;
provided, however, that any Lien arising in connection with any such
- -------- -------
Indebtedness shall be limited to the specified asset being financed or, in the
case of real property or fixtures, including additions and improvements, the
real property on which such asset is attached; and provided further, however,
-------- ------- -------
that such Indebtedness is Incurred within 90 days after such acquisition of such
asset by the Company or a Restricted Subsidiary.
"QIB" or "Qualified Institutional Buyer" means a "qualified
--- -----------------------------
institutional buyer," as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date" when used with respect to any Note to be redeemed or
---------------
purchased means the date fixed for such redemption or purchase by or pursuant to
this Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be redeemed or
----------------
purchased means the price at which it is to be redeemed or purchased pursuant to
this Indenture and the Notes.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
------------------------
refund, refinance, renew, repay or extend (including pursuant to any defeasance
or discharge mechanism) (collectively, "refinance", "refinances", and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of this Indenture or Incurred in compliance with this Indenture including
Indebtedness that refinances Refinancing Indebtedness, provided, however, that:
-------- -------
(1) (a) if the Stated Maturity of the Indebtedness being
-
refinanced is earlier than or the same as the Stated Maturity
of the Notes, the Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the
Indebtedness being refinanced or (b) if the Stated Maturity of
-
the Indebtedness being refinanced is later than the Stated
Maturity of the Notes, the Refinancing Indebtedness has a
Stated Maturity at least 91 days later than the Stated
Maturity of the Notes;
26
(2) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being
refinanced;
(3) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount,
an aggregate issue price) that is equal to or less than the
sum of the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced (plus,
without duplication, any additional Indebtedness incurred to
pay reasonable fees in connection therewith); and
(4) if the Indebtedness being refinanced is subordinated in right
of payment to the Notes or the Subsidiary Guarantee, such
Refinancing Indebtedness is subordinated in right of payment
to the Notes or the Subsidiary Guarantee on terms at least as
favorable to the Holders as those contained in the
documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
provided that Refinancing Indebtedness shall not include (x) Indebtedness of a
-
Non-Guarantor Subsidiary that refinances Indebtedness of the Company or a
Subsidiary Guarantor or (y) Indebtedness of the Company or a Restricted
-
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
"Regulation S" means Regulation S under the Securities Act.
------------
"Regulation S Certificate" means a certificate substantially in the
------------------------
form attached hereto as Exhibit D.
---------
"Related Business" means any of the businesses of the Company and its
----------------
Restricted Subsidiaries on the Issue Date, any other business of providing
health care services, and any business that is related, ancillary or
complementary to any thereof.
"Related Business Assets" means assets used or useful in a Related
-----------------------
Business.
"Representative" means any trustee, agent or representative (if any) of
--------------
an issue of Senior Indebtedness; provided that when used in connection with the
Senior Credit Agreement, the term "Representative" shall refer to the
administrative agent under the Senior Credit Agreement (so long as there shall
be an administrative agent).
"Resale Restriction Termination Date" means, with respect to any Note,
-----------------------------------
the date that is two years (or such other period as may hereafter be provided
under Rule 144(k) under the Securities Act or any successor provision thereto as
permitting the resale by non-affiliates of Restricted Securities without
restriction) after the later of the original
27
issue date in respect of such Note and the last date on which the Company or any
Affiliate of the Company was the owner of such Note (or any Predecessor Note
thereto).
"Responsible Officer" when used with respect to the Trustee means any
-------------------
vice president or assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller and any
assistant controller working in its Corporate Trust Office or any other officer
of the Trustee working in its Corporate Trust Office customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Investment" means any Investment other than a Permitted
---------------------
Investment.
"Restricted Security" has the meaning assigned to such term in Rule
-------------------
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
-------- -------
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
--------------------------
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Senior Credit Agreement" means one or more debt facilities (including,
-----------------------
without limitation, the Credit Agreement, dated as of September 22, 2000 among
the Company, Canadian Back Institute Limited, the Lenders party thereto, The
Chase Manhattan Bank, as Administrative Agent for the US Facilities, The Chase
Manhattan Bank of Canada, as Administrative Agent for the Canadian Facilities,
Banc of America Securities LLC, as Syndication Agent and CIBC, Inc., as
Documentation Agent) or commercial paper facilities to which the Company is a
party with banks or other institutional lenders providing for revolving credit
loans, term loans, or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time (and whether or not with the original administrative agent and
lenders or another administrative agent or agents or other lenders and whether
provided under the original credit agreement or any other credit or other
agreement or indenture).
28
"Senior Indebtedness" means, with respect to the Company, the
-------------------
following, whether outstanding on the Issue Date or thereafter issued, created,
Incurred or assumed, without duplication:
(1) the Bank Indebtedness Incurred by the Company, and
(2) all obligations consisting of principal of, premium on, if
any, accrued and unpaid interest on, and fees and other
amounts relating to, all other Indebtedness of the Company.
Senior Indebtedness includes interest accruing after, or that would
accrue but for, the filing of any petition in bankruptcy or for reorganization
relating to the Company at the rate specified in the documentation with respect
thereto, whether or not a claim for post-filing interest is allowed in such
proceeding) and fees relating thereto.
Notwithstanding anything to the contrary in the preceding paragraph,
Senior Indebtedness will not include:
(1) any Indebtedness with respect to which, in the instrument
creating or evidencing the same or pursuant to which the same
is outstanding, it is provided that the obligations in respect
of such Indebtedness are not superior in right of, or are
subordinate to, payment of the Notes or any Subsidiary
Guarantee;
(2) any obligation of the Company to any Subsidiary;
(3) any liability for Federal, state, foreign, local or other
taxes owed or owing by the Company;
(4) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such
liabilities);
(5) any Indebtedness, Guarantee or obligation of the Company that
is subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of the Company,
including, without limitation, any Senior Subordinated
Indebtedness and any Subordinated Obligations;
(6) any obligations in respect of Capital Stock or Attributable
Indebtedness;
(7) any Indebtedness Incurred in violation of this Indenture; or
(8) any Indebtedness described in the last paragraph of the
definition of the term "Indebtedness."
29
"Senior Subordinated Indebtedness" means the Notes and any other
--------------------------------
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank equally with the Notes in right of payment and is not subordinated by
its terms in right of payment to any Indebtedness or other obligation of the
Company that is not Senior Indebtedness.
"Special Record Date" for the payment of any Defaulted Interest means a
-------------------
date fixed by the Trustee pursuant to Section 307.
-----------
"S&P" means Standard and Poor's Ratings Service, a division of The
---
McGraw Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision, but shall not include any contingent obligations to repay,
redeem or repurchase any such principal prior to the date originally scheduled
for the payment thereof.
"Subordinated Obligation" means any Indebtedness of the Company
-----------------------
(whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Notes (including without
limitation each of the seller notes identified on Schedule 2).
"Subsidiary" of any Person means any corporation, association,
----------
partnership, joint venture, limited liability company or other business entity
(1) of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership and
joint venture interests) 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 (a) such Person, (b)
- -
such Person and one or more Subsidiaries of such Person or (c)
-
one or more Subsidiaries of such Person, or
(2) that is a third party professional corporation or similar
entity controlled by the Company with which the Company or any
Subsidiary has an exclusive management arrangement under which
it manages the business of such entity, provided that any such
--------
entity shall be treated as a consolidated Subsidiary of Select
for purposes of calculating Consolidated EBITDA, Consolidated
Interest Expense and Consolidated Net Income.
Unless otherwise specified herein, each reference to a Subsidiary will refer to
a Subsidiary of the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of payment of
--------------------
the Notes by a Subsidiary Guarantor pursuant to the terms of this Indenture and
any
30
supplemental indenture hereto, and, collectively, all such Guarantees. Each
such Subsidiary Guarantee will be in the form prescribed by this Indenture.
"Subsidiary Guarantor" means each Restricted Subsidiary after the Issue
--------------------
Date, that provides a Subsidiary Guarantee in accordance with the terms of this
Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-7bbbb) as
---
in effect on the date of this Indenture; provided, however, that in the event
the Trust Indenture Act of 1939 is amended after such date, then "TIA" means, to
the extent such amendment to the TIA is required by such amendment to be
incorporated into this Indenture, the Trust Indenture Act of 1939 as so amended.
"Trust Officer" means the Chairman of the Board, the President or any
-------------
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trustee" means the Person named as the "Trustee" in the first
-------
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means:
-----------------------
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary
by the Board of Directors of the Company in the manner
provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary or a Person
becoming a Subsidiary through merger or consolidation or Investment therein) to
be an Unrestricted Subsidiary only if:
(1) such Subsidiary or any of its Subsidiaries does not own any
Capital Stock or Indebtedness of or have any Investment in, or
own or hold any Lien on any property of, any other Subsidiary
of the Company that is not a Subsidiary of the Subsidiary to
be so designated or otherwise an Unrestricted Subsidiary;
(2) all the Indebtedness of such Subsidiary and its Subsidiaries
shall, at the date of designation, and will at all times
thereafter, consist of Non-Recourse Debt;
(3) such designation and the Investment of the Company and its
Restricted Subsidiaries in such Subsidiary complies with
Section 408;
-----------
31
(4) such Subsidiary, either alone or in the aggregate with all
other Unrestricted Subsidiaries, does not operate, directly or
indirectly, all or substantially all of the business of the
Company and its Subsidiaries;
(5) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation:
(a) to subscribe for additional Capital Stock of such
Person; or
(b) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any
specified levels of operating results; and
(6) on the date such Subsidiary is designated an Unrestricted
Subsidiary, such Subsidiary is not a party to any agreement,
contract, arrangement or understanding with the Company or any
Restricted Subsidiary with terms substantially less favorable
to the Company than those that might have been obtained from
Persons who are not Affiliates of the Company.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
incur at least $1.00 of additional Indebtedness under Section 406(a) on a pro
--------------
forma basis taking into account such designation.
"U.S. Government Obligation" means (x) any security that is (i) a
-------------------------- -
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (ii) an
--
obligation 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 under the preceding clause (i) or (ii),
is not callable or redeemable at the option of the issuer thereof, and (y) any
-
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
---------------
Securities Act) as custodian with respect to any U.S. Government Obligation that
is
32
specified in clause (x) above and held by such bank for the account of the
holder of such depositary receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation that is so specified
and held, provided that (except as required by law) such custodian is not
--------
authorized to make any deduction from the amount payable to the holder of such
depositary receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.
"Voting Stock" of a Person means all classes of Capital Stock of such
------------
Person then outstanding and normally entitled to vote in the election of
directors or other governing body.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Company, all
-----------------------
of the Capital Stock of which (other than directors' qualifying shares required
by applicable law) is owned by the Company or another Wholly-Owned Subsidiary.
Section 102. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Act"........................................................................... 108
---
"Affiliate Transaction"......................................................... 411
---------------------
"Agent Members"................................................................. 312
-------------
"Asset Sale Offer".............................................................. 410
----------------
"Asset Sale Offer Amount"....................................................... 410
-----------------------
"Asset Sale Offer Period"....................................................... 410
-----------------------
"Asset Sale Purchase Date"...................................................... 410
------------------------
"Authentication Order".......................................................... 303
--------------------
"Bankruptcy Law"................................................................ 601
--------------
"Blockage Notice"............................................................... 1403
---------------
"Change of Control Offer"....................................................... 414
-----------------------
"Change of Control Payment Date"................................................ 414
------------------------------
"Covenant Defeasance"........................................................... 1203
-------------------
"Custodian"..................................................................... 601
---------
"Defaulted Interest"............................................................ 307
------------------
"Defeasance".................................................................... 1202
----------
"Defeased Notes"................................................................ 1201
--------------
"Event of Default".............................................................. 601
----------------
"Excess Proceeds"............................................................... 410
---------------
"Expiration Date"............................................................... 108
---------------
"Global Notes".................................................................. 201
------------
"Guaranteed Obligations"........................................................ 1301
----------------------
"IAI"........................................................................... 201
---
33
"Institutional Accredited Investor Global Note"................................. 201
---------------------------------------------
"Institutional Accredited Investor Physical Note"............................... 201
-----------------------------------------------
"Non-payment Default"........................................................... 1403
-------------------
"Note Register" and "Note Registrar" ........................................... 305
------------- --------------
"Notice of Default"............................................................. 601
-----------------
"Offer"......................................................................... 410
-----
"Pari Passu Notes".............................................................. 410
----------------
"pay the Notes"................................................................. 1503
-------------
"pay its Subsidiary Guarantee".................................................. 1403
----------------------------
"Payment Blockage Period"....................................................... 1403
-----------------------
"Payment Default"............................................................... 1403
---------------
"Permitted Joint Venture"....................................................... 408
-----------------------
"Physical Notes"................................................................ 201
--------------
"Private Placement Legend"...................................................... 203
------------------------
"Regular Record Date"........................................................... 301
-------------------
"Regulation S Global Note"...................................................... 201
------------------------
"Regulation S Note Exchange Date"............................................... 313
-------------------------------
"Regulation S Physical Notes"................................................... 201
---------------------------
"Restricted Payment"............................................................ 408
------------------
"Rule 144A Global Note"......................................................... 201
---------------------
"Rule 144A Physical Note"....................................................... 201
-----------------------
"Subsidiary Guarantor Blockage Notice".......................................... 1503
------------------------------------
"Subsidiary Guarantor Non-payment Default"...................................... 1503
----------------------------------------
"Subsidiary Guarantor Payment Blockage Period".................................. 1503
--------------------------------------------
"Subsidiary Guarantor Payment Default".......................................... 1503
------------------------------------
"Successor Company"............................................................. 501
-----------------
Section 103. Rules of Construction. For all purposes of this Indenture,
---------------------
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Indenture have the meanings
assigned to them in this Indenture;
(2) "or" is not exclusive;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) 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;
(5) all references to "$" or "dollars" shall refer to the
- -------
lawful currency of the United States of America;
34
(6) the words "include," "included" and "including" as used
------- -------- ---------
herein shall be deemed in each case to be followed by the phrase "without
-------
limitation," if not expressly followed by such phrase or the phrase "but
---------- ---
not limited to";
--------------
(7) words in the singular include the plural, and words in the
plural include the singular; and
(8) any reference to a Section or Article refers to such Section
or Article of this Indenture.
Section 104. Incorporation by Reference of TIA. Whenever this Indenture
---------------------------------
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by any TIA reference to another statute or defined
by SEC rule under the TIA, have the meanings so assigned to them therein. The
following TIA terms have the following meanings:
"indenture securities" means the Notes.
--------------------
"indenture security holder" means a Noteholder.
-------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor" on the indenture securities means the Company, any
-------
Subsidiary Guarantor and any other obligor on the Notes.
Section 105. Conflict with TIA. If any provision hereof limits, qualifies
-----------------
or conflicts with a provision of the TIA that is required under the TIA to be a
part of and govern this Indenture, the provision of the TIA shall control. If
any provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the provision of the TIA shall be deemed
(i) to apply to this Indenture as so modified or (ii) to be excluded, as the
case may be.
Section 106. Compliance Certificates and Opinions. Upon any application or
------------------------------------
request by the Company, any Subsidiary Guarantor or by any other obligor upon
the Notes to the Trustee to take any action under any provision of this
Indenture, the Company, such Subsidiary Guarantor or such other obligor upon the
Notes, as the case may be, shall furnish to the Trustee an Officers' Certificate
in form and substance reasonably acceptable to the Trustee stating that all
conditions precedent, if any, provided for in this Indenture (including any
covenant, compliance with which constitutes a condition precedent) relating to
the proposed action have been complied with and an
35
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with; together with, if
applicable, such other certificates and opinions as may be required under the
TIA. Each such certificate or opinion shall be given in the form of one or more
Officers' Certificates, if to be given by one or more Officers, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the TIA and any other requirements set forth in this Indenture. Notwithstanding
the foregoing, in the case of any such request or application as to which the
furnishing of any Officers' Certificate or Opinion of Counsel is specifically
required by any provision of this Indenture relating to such particular request
or application, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 405) shall include:
- -----------
(1) a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or
she made such examination or investigation as is necessary to enable him or
her 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 such individual,
such condition or covenant has been complied with.
Section 107. 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 one or more Officers may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless any 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
36
representations by, an Officer or Officers 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 108. Acts of Noteholders; Record Dates.
---------------------------------
(a) 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 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 701) conclusive in favor of the Trustee, the Company,
-----------
any Subsidiary Guarantor and any other obligor upon the Notes, if made in the
manner provided in this Section 108.
-----------
(b) 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 the certificate of any 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 an officer of a corporation or a member of a partnership or
other entity, on behalf of such corporation or partnership or other entity, such
certificate or affidavit shall also constitute sufficient proof of such Person's
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 that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Note shall bind the Holder of every Note
issued upon the transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done
37
or suffered to be done by the Trustee, the Company, any Subsidiary Guarantor or
any other obligor upon the Notes in reliance thereon, whether or not notation of
such action is made upon such Note.
(e) (i) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes 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 Notes, 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 subclause
(e)(ii) of this Section 108. If any record date is set pursuant to this
-----------
paragraph, the Holders of Outstanding Notes on such record date (or their duly
designated proxies), and no other Holders, shall be entitled to take the
relevant action, whether or not such Persons 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 Notes 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 Notes 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 Notes in the manner set forth in
Section 110.
- -----------
(ii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to join in the giving or
making of (i) any Notice of Default, (ii) any declaration of acceleration
- --
referred to in Section 602, (iii) any request to institute proceedings referred
----------- ----
to in Section 607(2) or (iv) any direction referred to in Section 612, in each
-------------- -- -----------
case with respect to Notes. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Notes 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 Notes 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 Notes on the date such action
is taken. Promptly after any record
38
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 Notes in the manner set forth in Section 110.
-----------
(iii) With respect to any record date set pursuant to this Section 108,
-----------
the party hereto that 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 Company or the
Trustee, whichever such party is not setting a record date pursuant to this
Section 108(e) in writing, and to each Holder of Notes in the manner set forth
- --------------
in Section 110, 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 that set such record date shall be deemed to have
initially designated the 120/th/ 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 120/th/ day after the applicable record date.
(iv) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Note may do so with regard to
all or any part of the principal amount of such Note 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 109. 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, any Subsidiary
Guarantor or any other obligor upon the Notes shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at State Street Bank and Trust Company, 61 Broadway, 15/th/
Floor, New York, NY, 1006, Attention: Jean Clarke (telephone:
(212) 612-3040; facsimile: (212) 612-3202) or at any other address
furnished in writing to the Company by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class postage prepaid, to the Company at 4716 Old Gettysburg Road, P.O. Box
2034, Mechanicsburg, Pennsylvania 17055, attention of Michael E. Tarvin,
Senior Vice President, Secretary and General Counsel (facsimile
(717) 975-9981) or at any other address furnished in writing to the Trustee
by the Company.
39
Section 110. Notices 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 such Holder's address
as it appears in the Note Register, not later than the latest date, and not
earlier than the earliest date, 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.
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. 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 impossible to mail notice of any event as
required by any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
Section 111. 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 112. Successors and Assigns. All covenants and agreements in
----------------------
this Indenture by the Company shall bind its respective successors and assigns,
whether so expressed or not.
Section 113. Separability Clause. In case any provision in this
-------------------
Indenture or in the Notes 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 114. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture,
except as provided in Article 14 and Article 15.
---------- ----------
Section 115. Governing Law. THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
-------------
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. THE TRUSTEE, THE COMPANY, THE SUBSIDIARY GUARANTORS, ANY
OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE
40
NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED STATES
FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR
THE NOTES.
Section 116. Legal Holidays. In any case where any Interest Payment Date,
--------------
Redemption Date or Stated Maturity of any Note shall not be a Business Day at
any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of interest or principal and premium (if any)
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity.
Section 117. No Personal Liability of Directors, Officers, Employees,
--------------------------------------------------------
Incorporators and Stockholders. No director, officer, employee, incorporator or
- ------------------------------
stockholder, as such, of the Company or any Subsidiary Guarantor shall have any
liability for any obligation of the Company, or any Subsidiary Guarantor under
this Indenture, the Notes or any Subsidiary Guarantee, or for any claim based
on, in respect of, or by reason of, any such obligation or its creation. Each
Noteholder, by accepting the Notes, waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
Section 118. Exhibits and Schedules. All exhibits and schedules attached
----------------------
hereto are by this reference made a part hereof with the same effect as if
herein set forth in full.
Section 119. Counterparts. This Indenture may be executed in any number
------------
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
ARTICLE 2
NOTE FORMS
----------
Section 201. Forms Generally. The Notes and the Trustee's certificate of
---------------
authentication relating thereto shall be in substantially the forms set forth,
or referenced, in this Article 2 and Exhibit A annexed hereto, which Exhibit is
--------- ---------
hereby incorporated in and expressly made a part of this Indenture. The Notes
may have such appropriate insertions, omissions, substitutions, notations,
legends, endorsements, identifications and other variations as are required or
permitted by law, stock exchange rule or Depository rule or usage, agreements to
which the Company is subject, if any, or other customary usage, or as may
consistently herewith be determined by the Officers of the Company executing
such Notes, as evidenced by such execution. Each Note shall be dated the date of
its authentication. The terms of the Notes set forth in Exhibit A are part of
---------
the terms of
41
this Indenture. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Note.
Initial Notes and any Additional Notes offered and sold in reliance on
Rule 144A under the Securities Act shall be issued in the form of one or more
permanent global Notes in substantially the form set forth in Exhibit A (each, a
---------
"Rule 144A Global Note"), deposited with the Trustee, as custodian for the
---------------------
Depositary or its nominee, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of a Rule 144A
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary or its nominee,
as hereinafter provided.
Initial Notes and any Additional Notes offered and sold in offshore
transactions in reliance on Regulation S shall be issued in the form of one or
more permanent global Notes in substantially the form set forth in Exhibit A
---------
(each, a "Regulation S Global Note"), deposited with the Trustee, as custodian
------------------------
for the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of a Regulation S Global Note, if any, may from time to time be increased
or decreased by adjustments made in the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Notes and any Additional Notes resold to institutional "accredited
investors" (as defined in Rules 501(a)(1), (2), (3) and (7) under the Securities
Act) who are not QIBs ("IAIs") in the United States of America, upon the
----
effectiveness of such resale, shall be represented by one or more permanent
global Notes substantially in the form set forth in Exhibit A (each, an
---------
"Institutional Accredited Investor Global Note"), deposited with the Trustee, as
---------------------------------------------
custodian for the Depository or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of an Institutional Accredited Investor Global Note, if any, may from
time to time be increased or decreased by adjustments made in the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Subject to the limitations on the issuance of certificated Notes set forth
in Sections 312 and 313, Initial Notes and any Initial Additional Notes issued
------------ ---
pursuant to Section 305 in exchange for or upon transfer of beneficial interests
-----------
(x) in a Rule 144A Global Note shall be in the form of permanent certificated
-
Notes substantially in the form set forth in Exhibit A and shall contain the
---------
Private Placement Legend as set forth in Section 203 (the "Rule 144 Physical
----------- -----------------
Notes"), (y) in an Regulation S Global Note (if any), on or after the Regulation
- ----- -
S Note Exchange Date with respect to such Regulation S Global Note, shall be in
the form of permanent certificated Notes substantially in the form set forth in
Exhibit A (the "Regulation S Physical Notes") or (z) in an Institutional
- --------- --------------------------- -
Accredited Investor Global Note (if any), shall be in the form of permanent
certificated Notes substantially in the form set forth in Exhibit A (the
---------
"Institutional Accredited Investor Physical Notes"), respectively, as
------------------------------------------------
hereinafter provided.
42
The 144A Physical Notes, the Regulation S Physical Notes, the Institutional
Accredited Investor Physical Notes are sometimes collectively herein referred to
as the "Physical Notes." The Rule 144A Global Note, the Regulation S Global Note
--------------
and the Institutional Accredited Investor Global Note are sometimes collectively
referred to as the "Global Notes."
------------
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A and, subject to Section 312(b), shall be in the form of one or more
- --------- --------------
Global Notes.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Clearstream" and "Customer Handbook" of Clearstream (or, in each
case, equivalent documents setting forth the procedures of Euroclear and
Clearstream) shall be applicable to transfers of beneficial interests in the
Regulation S Global Notes that are held by participants through Euroclear or
Clearstream.
Section 202. Form of Trustee's Certificate of Authentication. This is
------------------------------------------------
one of the Notes described in the within-mentioned Indenture.
______________________________
as Trustee
By___________________________
Authorized Officer
Dated:
If an appointment of an Authenticating Agent is made pursuant to
Section 714, the Notes may have endorsed thereon, in lieu of the Trustee's
- -----------
certificate of authentication, an alternative certificate of authentication in
the following form:
This is one of the Notes described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
___________________________________
As Trustee
By_________________________________
43
As Authenticating Agent
By_________________________________
Authorized Officer
Dated:
Section 203. Restrictive and Global Note Legends. Each Global Note and
-----------------------------------
Physical Note shall bear the following legend set forth below (the "Private
-------
Placement Legend") on the face thereof until the Private Placement Legend is
- ----------------
removed in accordance with Section 313(5):
--------------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE
HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND
ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN
44
"INSTITUTIONAL ACCREDITED INVESTOR" ACQUIRING THE NOTE FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Each Global Note, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR
---
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 312 AND 313 OF THE INDENTURE.
------------ ---
45
Article 3
THE NOTES
Section 301. Title and Terms. The aggregate principal amount of Notes that
---------------
may be authenticated and delivered and Outstanding under this Indenture is not
limited, except as provided in Section 406 and except as may be limited by
-----------
applicable law. The Initial Notes will be issued in an aggregate principal
amount of $175,000,000. All the Original Notes shall vote and consent together
on all matters as one class, and none of the Original Notes will have the right
to vote or consent as a class separate from one another on any matter.
Additional Notes (including any Exchange Notes issued in exchange therefor) may
vote as a class with the other Notes and otherwise be treated as Notes for
purposes of this Indenture.
The Notes shall be known and designated as the "9 1/2% Senior Subordinated
Notes Due 2009" of the Company. The final Stated Maturity of the Notes shall be
June 15, 2009. Interest on the Outstanding principal amount of Notes will accrue
at the rate of 9 1/2% per annum and will be payable semi-annually in arrears on
June 15 and December 15 in each year, commencing on December 15, 2001, to
holders of record on the immediately preceding June 1 and December 1,
respectively (each such June 1 and December 1, a "Regular Record Date").
-------------------
Interest on the Original Notes will accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid,
from the Issue Date; and interest on any Additional Notes (and Exchange Notes
issued in exchange therefor) will accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid on
such Additional Notes, from the date of issuance of such Additional Notes;
provided that if any Note is surrendered for exchange on or after a record date
for an Interest Payment Date that will occur on or after the date of such
exchange, interest on the Note received in exchange thereof will accrue from the
date of such Interest Payment Date.
The principal of, and premium, if any, and interest, on the Notes shall
be payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York (the "Place of Payment");
----------------
provided, however, that at the option of the Company payment of interest on a
- -------- -------
Note may be made by check mailed to the address of the Person entitled thereto
as such address shall appear in the Note Register.
Section 302. Denominations. The Notes shall be issuable only in
-------------
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 303. Execution, Authentication and Delivery and Dating. The Notes
-------------------------------------------------
shall be executed on behalf of the Company by its chairman of the Board of
Directors, its chief executive officer, its president, or one of its executive
vice presidents or senior vice
46
presidents, in each case, attested by its Secretary or one of its assistant
secretaries. The signature of such Officer on the Notes may be manual or
facsimile.
Notes 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 Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver (i) Initial
Notes for original issue in the aggregate principal amount not to exceed
$175,000,000 and (ii) Additional Notes from time to time for original issue in
aggregate principal amounts specified by the Company and (iii) Exchange Notes
from time to time for issue in exchange for a like principal amount of Initial
Notes or Initial Additional Notes, in each case specified in clauses (i) through
(iii) above, upon a written order of the Company in the form of an Officers'
Certificate of the Company (an "Authentication Order"). Such Officers'
--------------------
Certificate shall specify the amount of Notes to be authenticated and the date
on which the Notes are to be authenticated, whether the Notes are to be Initial
Notes, Additional Notes or Exchange Notes and whether the Notes are to be issued
as one or more Global Notes or Physical Notes and such other information as the
Company may include or the Trustee may reasonably request.
All Notes shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 304. Temporary Notes. Until definitive Notes are ready for
---------------
delivery, the Company may prepare and execute and upon receipt of an
Authentication Order the Trustee shall authenticate and deliver temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Officers executing such temporary Notes consider
appropriate for temporary Notes, as evidenced by their execution of such
temporary Notes and as may be reasonably acceptable to the Trustee. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company in a Place of Payment, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Company shall execute and upon receipt of an Authentication
Order the
47
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes of the same series and tenor.
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 "Note Register") in which, subject to such reasonable regulations
-------------
as it may prescribe, the Company shall provide for the registration of Notes and
of transfers of Notes. The Trustee is hereby appointed "Note Registrar" for the
-------------
purpose of registering Notes and transfers of Notes as herein provided. The
Company may change the Note Registrar without prior notice to the Holders, and
the Company or any of its Domestic Subsidiaries may act as Note Registrar, in
which event the Note Register may be kept at an office of the Company or any
such Domestic Subsidiary.
Upon surrender for transfer of any Note at the office or agency of the
Company in a Place of Payment, in compliance with all applicable requirements of
this Indenture and applicable law, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes, of any
authorized denominations and of a like tenor and aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive.
All Notes issued upon any transfer or exchange of Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such transfer or
exchange.
Every Note presented or surrendered for transfer or 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 Note
Registrar duly executed, by the Holder thereof or such Holder's attorney duly
authorized in writing.
No service charge shall be made for any transfer or exchange of Notes, 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 transfer or
exchange of Notes under this Section 305, other than exchanges pursuant to
-----------
Section 304 or 906 not involving any transfer.
- ----------- ---
48
The Company shall not be required (i) to issue, transfer or exchange any
Note during a period beginning at the opening of business 15 days before the day
of the mailing of a notice of redemption (or purchase) of Notes selected for
redemption (or purchase) under Section 1004 and ending at the close of business
------------
on the day of such mailing, or (ii) to transfer or exchange any Note so selected
for redemption (or purchase) in whole or in part.
Section 306. Mutilated, Destroyed, Lost and Stolen Notes. If (i) any
-------------------------------------------
mutilated Note is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon receipt of
an Authentication Order the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note
of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 306, 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 Note issued pursuant to this Section 306 in lieu of any
-----------
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Notes duly issued hereunder.
The provisions of this Section 306 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 Notes.
Section 307. Payment of Interest Rights Preserved. Interest on any Note
------------------------------------
that 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 Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest specified in Section 301.
-----------
Any interest on any Note that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
---------
Interest") shall
- --------
49
forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder; and such Defaulted Interest
may be paid by the Company, as provided in clause (1) or clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
reasonably 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 (1). Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15
nor 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 such Holder's address as it appears in the Note 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 Notes (or their respective Predecessor
Notes) are registered on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause (2), such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 307, each Note
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Note.
Section 308. Persons Deemed Owners. The Company, any Subsidiary Guarantor,
---------------------
any other obligor upon the Notes, the Trustee and any agent of any of them
50
may treat the Person in whose name any Note is registered as the owner of such
Note for the purpose of receiving payment of principal of (and premium, if any),
and (subject to Section 307) interest on, such Note and for all other purposes
-----------
whatsoever, whether or not such Note be overdue, and none of the Company, any
Subsidiary Guarantor any other obligor upon the Notes, the Trustee nor any agent
of any of them shall be affected by notice to the contrary.
Section 309. Cancellation. All Notes surrendered for payment, redemption,
------------
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and, if not already cancelled, shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder that the
Company may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly cancelled by the Trustee. No Notes shall be authenticated in
lieu of or in exchange for any Notes cancelled as provided in this Section 309,
-----------
except as expressly permitted by this Indenture. All cancelled Notes held by the
Trustee shall be disposed of as directed by a Company Order.
Section 310. Computation of Interest. Interest on the Notes shall be
-----------------------
computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers. The Company in issuing the Notes may use
-------------
"CUSIP" numbers (if then generally in use), and if so, the Trustee may use the
CUSIP numbers in notices of redemption or exchange as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
- -------- -------
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee of
any change in CUSIP numbers.
Section 312. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) Each Global Note initially shall (i) be registered in the name of the
Depositary for such Global Note or the nominee of such Depositary and (ii) be
delivered to the Trustee as custodian for such Depositary.
Prior to the expiration of the 40-day distribution compliance period set
forth in Regulation S, beneficial interests in any Regulation S Global Note may
be held only through Euroclear or Clearstream unless transferred in accordance
with Section 313(3).
Members of, or participants in, the Depositary ("Agent Members") shall have
-------------
no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, any Subsidiary Guarantor, any other
obligor upon the Notes, the Trustee and any agent of any of them as the absolute
owner of such Global Note for all
51
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, any Subsidiary Guarantor, any other obligor upon the Notes, the
Trustee or any agent of any of them from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Note. The registered holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action that a Holder is
entitled to take under this Indenture or the Notes.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but, subject to the immediately succeeding sentence, not
in part, to the Depositary, its successors or their respective nominees.
Interests of beneficial owners in a Global Note may not be transferred or
exchanged for Physical Notes, unless (i) the Company has consented thereto in
writing, or such transfer or exchange is made pursuant to the next sentence, and
(ii) such transfer or exchange is in accordance with the applicable rules and
procedures of the Depositary and the provisions of Sections 305 and 313. Rule
------------ ---
144A Physical Notes, Regulation S Physical Notes or Institutional Accredited
Investor Physical Notes, shall be transferred to all beneficial owners in
exchange for their beneficial interests in the relevant Rule 144A Global Note,
the relevant Regulation S Global Note or the relevant Institutional Accredited
Investor Global Note, respectively, if (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for the applicable
Global Note and a successor depositary is not appointed by the Company within 90
days, (ii) the Depositary ceases to be a "Clearing Agency" registered under the
Exchange Act and a successor depositary is not appointed by the Company within
90 days, (iii) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of Physical Notes under this Indenture or (iv)
an Event of Default has occurred and is continuing and the Note Registrar has
received a written request from the Depositary to issue Physical Notes (with
appropriate registration and delivery instructions).
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners for Physical Notes
pursuant to paragraph (b) of this Section 312, the Note Registrar shall record
-----------
on its books and records the date and a decrease in the principal amount of such
Global Note in an amount equal to the beneficial interest in the Global Note
being transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Physical Notes of like tenor and principal
amount of authorized denominations.
(d) In connection with a transfer of an entire Global Note to beneficial
owners pursuant to paragraph (b) of this Section 312, the applicable Global Note
-----------
shall be deemed
52
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
the applicable Global Note, an equal aggregate principal amount at maturity of
U.S. Physical Notes (in the case of any Rule 144A Global Note), Regulation S
Physical Notes (in the case of any Regulation S Global Note) or Institutional
Accredited Investor Physical Notes (in the case of any Institutional Accredited
Investor Global Note) as the case may be, of authorized denominations.
(e) The transfer and exchange of a Global Note or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Indenture (including applicable restrictions on transfer set forth in Section
-------
313) and the procedures of the Depositary therefor. Any beneficial interest in
- ---
one of the Global Notes that is transferred to a Person who takes delivery in
the form of an interest in a different Global Note will, upon transfer, cease to
be an interest in the Global Note from which the interest is being transferred
and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest. A transferor of a beneficial interest in a Global Note
to be transferred to a Person taking delivery in the form of an interest in
another Global Note shall deliver to the Registrar a written order given in
accordance with the Depositary's procedures containing information regarding the
participant account of the Depositary to be credited with a beneficial interest
in the relevant Global Note. Subject to Section 313, the Registrar shall, in
-----------
accordance with such instructions, instruct the Depositary to credit to the
account of the Person specified in such instructions a beneficial interest in
such other Global Note and to debit the account of the Person making the
transfer of the beneficial interest in the Global Note being transferred.
(f) Any Physical Note delivered in exchange for an interest in a Global
Note pursuant to paragraph (b) of this Section 312 shall, unless such exchange
-----------
is made on or after the Resale Restriction Termination Date applicable to such
Note and except as otherwise provided in Section 203 and Section 313, bear the
----------- -----------
Private Placement Legend. Any request to remove the Private Placement Legend
shall be subject to the terms of Section 313(5).
-------------
(g) The Company, any Subsidiary Guarantor, any other obligor upon the
Notes or the Trustee, in the discretion of any of them, may treat as the Act of
a Holder any instrument or writing of any Person that is identified by the
Depositary as the owner of a beneficial interest in the Global Note, provided
--------
that the fact and date of the execution of such instrument or writing is proved
in accordance with Section 108(b).
-------------
53
Section 313. Special Transfer Provisions.
---------------------------
(1) Transfers of Rule 144A Global Notes. The following provisions shall
-----------------------------------
apply with respect to any proposed transfer of a Rule 144A Global Note that is a
Restricted Security or a beneficial interest therein prior to the Resale
Restriction Termination Date:
(a) a transfer of a Rule 144A Global Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee, in accordance with the form set forth on the reverse of the
Note, that it is purchasing for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a "qualified institutional buyer" within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A;
(b) a transfer of a Rule 144A Global Note or a beneficial
interest therein to an IAI shall be made upon receipt by the Trustee or its
agent of certificate substantially in the form set forth in Exhibit C from
---------
the proposed transferee and, if requested by the Company or the Trustee,
the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(c) a transfer of a Rule 144A Global Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set forth
in Exhibit D from the proposed transferor and, if requested by the Company
---------
or the Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them.
(2) Transfers of Institutional Accredited Investor Global Notes. The
-----------------------------------------------------------
following provisions shall apply with respect to any proposed transfer of an
Institutional Accredited Investor Global Note that is a Restricted Security or a
beneficial interest therein prior to Resale Restriction Termination Date:
(a) a transfer of an Institutional Accredited Investor
Global Note or a beneficial interest therein to a QIB shall be made upon
the representation of the transferee, in accordance with the form as set
forth on the reverse of the Note, that it is purchasing for its own account
or an account with respect to which it exercises sole investment discretion
and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A, and is aware that
54
the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A;
(b) a transfer of an Institutional Accredited Investor Global Note or
a beneficial interest therein to an IAI shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set forth
in Exhibit C from the proposed transferee and, if requested by the Company
---------
or the Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them; and
(c) a transfer of an Institutional Accredited Investor Global Note or
a beneficial interest therein to a Non-U.S. Person shall be made upon
receipt by the Trustee or its agent of a certificate substantially in the
form set forth in Exhibit D from the proposed transferor and, if requested
---------
by the Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them.
(3) Transfer of Regulation S Global Notes. The following provisions shall
-------------------------------------
apply with respect to any proposed transfer of a Regulation S Global Note Global
Note that is a Restricted Security or a beneficial interest therein prior to the
expiration of the distribution compliance period set forth in Regulation S:
(a) a transfer of a Regulation S Global Note Global Note or a
beneficial interest therein to a QIB shall be made upon the representation
of the transferee, in accordance with the form set forth on the reverse of
the Note, that it is purchasing the Note for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A;
(b) a transfer of a Regulation S Global Note Global Note or a
beneficial interest therein to an IAI shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set forth
in Exhibit C from the proposed transferee and, if requested by the Company
---------
or the Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them; and
55
(c) a transfer of a Regulation S Global Note Global Note or a
beneficial interest therein to a Non- U.S. Person shall be made upon
receipt by the Trustee or its agent of a certificate substantially in the
form set forth in Exhibit D hereof from the proposed transferee and, if
---------
requested by the Company or the Trustee, receipt by the Trustee or its
agent of an opinion of counsel, certification and/or other information
satisfactory to each of them.
After the expiration of the distribution compliance period set forth in
Regulation S, interests in the Regulation S Global Note Global Note may be
transferred without requiring certification set forth in Exhibit C, Exhibit D or
any additional certification. The Trustee and Note Registrar shall be entitled
to request and receive, and may rely upon conclusively, a certificate or other
written confirmation from the Company as to the date of expiration of such
distribution compliance period; and until it receives such certification or
confirmation, the Trustee shall be entitled to presume that such distribution
compliance period has not expired.
(4) Limitation on Issuance of Physical Notes. No Physical Note shall be
----------------------------------------
exchanged for a beneficial interest in any Global Note, except in accordance
with Section 312 and this Section 313.
----------- -----------
A beneficial owner of an interest in a Regulation S Global Note shall not
be permitted to exchange such interest for a Physical Note until a date, which
must be after the expiration of the distribution compliance period set forth in
Regulation S, on which the Company receives a certificate of beneficial
ownership substantially in the form of Exhibit E from such beneficial owner (a
"Certificate of Beneficial Ownership"). Such date, as it relates to a Regulation
-----------------------------------
S Global Note, is herein referred to as the "Regulation S Note Exchange Date."
-------------------------------
The Trustee and Note Registrar shall be entitled to request and receive, and may
rely upon conclusively, a certificate or other written confirmation from the
Company as to the date of the Registration S Note Exchange Date, and until it
receives such certification or confirmation, the Trustee and Note Registrar
shall be entitled to presume that the Regulation S Note Exchange Date has not
occurred.
(5) Private Placement Legend. Upon the transfer, exchange or replacement
------------------------
of Notes not bearing the Private Placement Legend, the Note Registrar shall
deliver Notes that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Notes bearing the Private Placement Legend, the Note
Registrar shall deliver only Notes that bear the Private Placement Legend,
unless (i) the requested transfer is after the relevant Resale Restriction
-
Termination Date with respect to such Notes, or (ii) upon written request of the
--
Company after there is delivered to the Note Registrar an opinion of counsel
(which opinion and counsel are satisfactory to the Company and the Trustee) to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act, or (iii) with respect to a Regulation S Global Note or Regulation S
---
Physical Note only, with the agreement of the Company on or after the Regulation
S Note
56
Exchange Date with respect to such Note, or (iv) such Notes are sold or
--
exchanged pursuant to an effective registration statement under the Securities
Act.
(6) Other Transfers. The Note Registrar shall effect and register, upon
---------------
receipt of a written request from the Company so to do, a transfer not otherwise
permitted by this Section 313, such registration to be done in accordance with
-----------
the otherwise applicable provisions of this Section 313, upon the furnishing by
-----------
the proposed transferor or transferee of a written opinion of counsel (which
opinion and counsel are satisfactory to the Company and the Trustee) to the
effect that, and such other certifications or information as the Company may
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
A Note that is a Restricted Security may not be transferred other than as
provided in this Section 313. A beneficial interest in a Global Note that is a
-----------
Restricted Security may not be exchanged for a beneficial interest in another
Global Note other than through a transfer in compliance with this Section 313.
-----------
(7) General. By its acceptance of any Note bearing the Private Placement
-------
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Note Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 312 or this Section 313
----------- -----------
(including all Notes received for transfer pursuant to this Section 313). The
-----------
Company shall have the right to require the Note Registrar to deliver to the
Company, at the Company's expense, copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Note Registrar.
In connection with any transfer of any Note, the Trustee, the Note
Registrar and the Company shall be entitled to receive, shall be under no duty
to inquire into, may conclusively presume the correctness of, and shall be fully
protected in relying upon the certificates, opinions and other information
referred to herein (or in the forms provided herein, attached hereto or to the
Notes, or otherwise) received from any Holder and any transferee of any Note
regarding the validity, legality and due authorization of any such transfer, the
eligibility of the transferee to receive such Note and any other facts and
circumstances related to such transfer.
Neither the Trustee nor the Note Registrar shall be under any obligation or
duty to determine or inquire as to compliance with the Securities Act (including
any rules or regulations promulgated thereunder) or any state securities laws
that may be applicable in connection with or with respect to any transfer of any
interest in any Note (including any transfers between or among beneficial owners
of interests in any Global Note) or to
57
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture with respect to transfers of interests in any
security (including any transfers between or among beneficial owners of
interests in any Global Note); except that the Trustee shall be under a duty to
require delivery of such certificates and other documentation, if any, as are
expressly required in the applicable circumstance, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance on their face with the express requirements
hereof. The Trustee shall have no responsibility for (i) the actions or
omissions of the Depositary, or for the accuracy of the books or records of the
Depositary and (ii) transfers, of which it has no knowledge, between or among
beneficial owners of interests in the same Global Note.
Section 314. Payment of Additional Interest.
------------------------------
(a) Under certain circumstances the Company will be obligated to pay
certain additional amounts of interest to the Holders of certain Initial Notes,
as more particularly set forth in such Initial Notes.
(b) Under certain circumstances the Company may be obligated to pay
certain additional amounts of interest to the Holders of certain Initial
Additional Notes, as may be more particularly set forth in such Initial
Additional Notes.
ARTICLE 4
COVENANTS
---------
Section 401. Payment of Principal, Premium and Interest. The Company will
------------------------------------------
duly and punctually pay the principal of (and premium, if any) and interest on
the Notes in accordance with the terms of the Notes and this Indenture.
Section 402. Maintenance of Office or Agency. The Company will maintain
-------------------------------
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and of
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain such office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee. The
Company hereby designates the Corporate Trust Office as the initial Place of
Payment and appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands so long as such Corporate Trust Office remains
the Place of Payment.
58
Section 403. Money for 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 Notes,
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.
If the Company is not acting as its own Paying Agent, it will, prior to
each due date of the principal of (and premium, if any) or interest on, any
Notes, 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.
If the Company is not acting as its own Paying Agent, the Company will
cause any 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 403, that such Paying Agent will
-----------
(1) hold all sums held by it for the payment of principal of
(and premium, if any) or interest on Notes 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 Subsidiary Guarantor or other obligor upon the Notes) in the making of
any such payment of principal (and premium, if any) or interest;
(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; and
(4) acknowledge, accept and agree to comply in all respects with
the provisions of this Indenture and TIA relating to the duties, rights and
liabilities of 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.
59
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 Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid in the appropriate proportion to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Note 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.
Section 404. SEC Reports.
-----------
(a) Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, to the extent permitted
by the Exchange Act or the SEC, the Company will file with the SEC, and provide
the Trustee and the Holders of the Notes with, the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that are
specified in Sections 13 and 15(d) of the Exchange Act (or the rules of the SEC
promulgated thereunder) within the time periods specified therein. In the event
that the Company is not permitted to file such reports, documents and
information with the SEC pursuant to the Exchange Act, the Company will
nevertheless provide such Exchange Act information to the Trustee and the
Holders of the Notes as if the Company were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act within the time periods
specified therein.
The Trustee shall not be under a duty to review or evaluate such reports
and information, delivery to the Trustee being for the purpose of making such
reports and information available to it and to Holders of Notes who may request
such information.
(b) If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes to the financial,
statements, and in Management's Discussion and Analysis of Results of Operations
and Financial Condition, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries.
Section 405. Statement as to Default. The Company will deliver to the
-----------------------
Trustee, within 120 days after the end of each fiscal year of the Company ending
after the date hereof, an Officers' Certificate, stating that to the best
knowledge of the signers thereof the Company is or is not in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace
60
or requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
such signer may have knowledge. To the extent required by the TIA, each
Subsidiary Guarantor shall comply with TIA (S) 314(a)(4). At least one of the
individuals signing any certificate given by any Person pursuant to this Section
-------
405 shall be the principal executive, financial or accounting officer of such
- ---
Person, in compliance with TIA (S) 314(a)(4).
Section 406. Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness; provided, however, that the Company and
-------- -------
the Subsidiary Guarantors may Incur Indebtedness if on the date of the
Incurrence:
(1) the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries is at least (a) 2.25 to 1.00; and
(2) no Default or Event of Default has occurred or is continuing or
would occur as a consequence of Incurring the Indebtedness.
(b) Section 406(a) will not prohibit the incurrence of the following
--------------
Indebtedness:
(1) Indebtedness Incurred pursuant to the Senior Credit Agreement in
an aggregate principal amount up to $260.0 million at any one time
outstanding less the aggregate principal amount of all principal repayments
made as a result of the receipt of proceeds of Asset Dispositions, which
repayments (in the case of the revolving credit facility thereunder)
permanently reduce the commitments thereunder;
(2) Indebtedness of the Company owing to and held by any Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by
the Company or any Restricted Subsidiary; provided, however,
-------- -------
(A) if the Company or any Subsidiary Guarantor is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all obligations with respect to the
Notes or the Subsidiary Guarantees, as the case may be; and
(B) (i) any subsequent issuance or transfer of Capital Stock
or any other event that results in any such Indebtedness being
beneficially held by a Person other than the Company or a Restricted
Subsidiary of the Company, and
61
(ii) any sale or other transfer of any such Indebtedness to
a Person other than the Company or a Restricted Subsidiary of the
Company shall be deemed, in each case, to constitute an
Incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be;
(3) Indebtedness represented by (a) the Notes (including any Exchange
-
Notes issued in exchange for Initial Notes but excluding any Additional
Notes), (b) any Indebtedness (other than the Indebtedness described in
-
clauses (1), (2), (5), (6), (7), (8) and (9) of this Section 406(a))
outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred
-
in respect of any Indebtedness described in this clause (3) or clause (4)
or Incurred pursuant to Section 406(a);
--------------
(4) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on the date on which such Restricted Subsidiary is acquired by the Company
after the Issue Date (other than Indebtedness Incurred (a) to provide all
or any portion of the funds utilized to consummate the transaction or
series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was otherwise acquired by the Company or
(b) otherwise in connection with, or in contemplation of, such
acquisition); provided, however, that at the time such Restricted
-------- -------
Subsidiary is acquired by the Company, the Company would have been able to
Incur $1.00 of additional Indebtedness pursuant to Section 406(a) after
--------------
giving effect to the Incurrence of such Indebtedness pursuant to this
clause (4);
(5) Indebtedness of the Company or any Subsidiary Guarantor under (x)
-
Currency Agreements that are related to business transactions of the
Company or its Restricted Subsidiaries entered into in the ordinary course
of business, or (y) Currency Agreements or Interest Rate Agreements that
-
are entered into for bona fide hedging purposes of the Company or its
Restricted Subsidiaries and substantially correspond in terms of notional
amount, duration, currencies and interest rates, as applicable, to
Indebtedness of the Company or its Restricted Subsidiaries Incurred without
violation of the Indenture;
(6) the Subsidiary Guarantees and other Guarantees by the Subsidiary
Guarantors of Indebtedness Incurred in accordance with the provisions of
this Indenture; provided that in the event such Indebtedness that is being
Guaranteed (a) ranks equally in right of payment with the Notes or any
-
Subsidiary Guarantee, then the related Guarantee shall rank equally in
right of payment to the Subsidiary Guarantees or (b) is a Subordinated
-
Obligation or a Guarantor Subordinated Obligation, then the related
Guarantee shall be subordinated in right of payment to the Subsidiary
Guarantees;
62
(7) Indebtedness incurred to insurance carriers in respect of
workers' compensation claims or self-insurance obligations, or to issuers
of performance, bid, surety and similar bonds or letters of credit or
guarantees supporting performance of contracts (other than for borrowed
money), in each case in the ordinary course of business;
(8) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Capital Stock of
a Restricted Subsidiary, or for contingent earn-out payments based on
performance of any business acquired by the Company or any Restricted
Subsidiary, provided that (in the case of any such disposition) the maximum
aggregate liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds actually received by the Company and its
Restricted Subsidiaries in connection with such disposition;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in
the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business, provided, however, that such Indebtedness is
-------- -------
extinguished within five business days of Incurrence;
(10) Purchase Money Indebtedness and Capitalized Lease Obligations
Incurred to finance the acquisition by the Company or a Restricted
Subsidiary of any assets in the ordinary course of business that, together
with all Refinancing Indebtedness Incurred in respect of Indebtedness
previously Incurred pursuant to this clause (10), does not exceed $15.0
million in the aggregate at any time outstanding;
(11) Indebtedness of the Company or any Subsidiary Guarantor, to the
extent the proceeds thereof are immediately used after the Incurrence
thereof to purchase Notes tendered in an offer to purchase made as a result
of a Change of Control;
(12) Indebtedness of any Foreign Subsidiary in Canada under any
working capital facility in an aggregate principal amount not to exceed
Cdn. $5.0 million outstanding at any time; and
(13) in addition to the items referred to in clauses (1) through (12)
above, Indebtedness of the Company and the Restricted Subsidiaries in an
aggregate outstanding principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this clause
(13) and then outstanding, will not exceed $35.0 million.
63
(c) The Company and the Subsidiary Guarantors will not Incur any
Indebtedness if the proceeds thereof are used, directly or indirectly, to
refinance any Subordinated Obligations or any Guarantor Subordinated Obligations
unless such refinancing Indebtedness will be subordinated to the Notes and the
Subsidiary Guarantees to at least the same extent as such Subordinated
Obligations or Guarantor Subordinated Obligations. The Company and the
Subsidiary Guarantors will not Incur any Indebtedness if the proceeds thereof
are used, directly or indirectly, to refinance any Indebtedness that ranks
equally in right of payment with the Notes or any Subsidiary Guarantee unless
such refinancing Indebtedness is Senior Subordinated Indebtedness or
Subordinated Obligations (in the case of the Company) or Guarantor Senior
Subordinated Indebtedness or Guarantor Subordinated Obligations (in the case of
a Subsidiary Guarantor). No Restricted Subsidiary other than a Subsidiary
Guarantor may Incur any Indebtedness if the proceeds are used, directly or
indirectly, to refinance Indebtedness of the Company or a Subsidiary Guarantor.
(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 406:
-----------
(1) in the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in Section 406(a) or (b), the
-------------- -
Company, in its sole discretion, will classify such item of Indebtedness on
the date of Incurrence and only be required to include the amount and type
of such Indebtedness in one of such clauses; provided that (a) any
-------- -
Indebtedness classified as Incurred pursuant to clause (13) of Section
-------
406(b) may subsequently be reclassified as Incurred pursuant to Section
------ -------
406(a) from and after the first date on which the Company could Incur such
------
Indebtedness under such Section 406(a) if deemed Incurred on such date, and
--------------
(b) all Indebtedness incurred or outstanding under the Senior Credit
---
Agreement on the Issue Date shall, be deemed Incurred exclusively pursuant
to clause (1) of Section 406(b); and
--------------
(2) the amount of Indebtedness issued at a price that is less than
the principal amount thereof will be equal to the amount of the liability
in respect thereof determined in accordance with GAAP.
Accrual of interest, accrual of dividends, the accretion of accreted value
or fluctuations in exchange rates or commodity prices will not be deemed to be
an Incurrence of Indebtedness for purposes of this covenant. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value of the
-
Indebtedness in the case of any Indebtedness issued with original issue discount
and (ii) the principal amount or liquidation preference thereof, together with
--
any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
64
(e) The Company will not permit any of its Unrestricted Subsidiaries to
Incur any Indebtedness or issue any shares of Disqualified Stock, other than
Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a
Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be
Incurred by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be Incurred as of such date under Section 406,
-----------
the Company shall be in default of Section 406).
-----------
Section 407. Limitation on Layering. The Company will not Incur any
----------------------
Indebtedness that is subordinate or junior in ranking in any respect to any
Senior Indebtedness unless such Indebtedness is Senior Subordinated Indebtedness
or is contractually subordinated in right of payment to all Senior Subordinated
Indebtedness, including the Notes. No Subsidiary Guarantor will Incur any
Indebtedness that is subordinate or junior in ranking in any respect to any
Guarantor Senior Indebtedness of such Subsidiary Guarantor unless such
Indebtedness is Guarantor Senior Subordinated Indebtedness of such Subsidiary
Guarantor or is contractually subordinated in right of payment to all Guarantor
Senior Subordinated Indebtedness of such Subsidiary Guarantor, including its
Subsidiary Guarantee.
Section 408. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries, directly or indirectly, to:
(1) declare or pay any dividend or make any distribution on or in
respect of any Capital Stock of the Company or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) except:
(A) dividends or distributions payable in Capital Stock of
the Company (other than Disqualified Stock) or in options, warrants or
other rights to purchase such Capital Stock of the Company; and
(B) dividends or distributions payable to the Company or a
Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of
common Capital Stock on a pro rata basis);
(2) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Company, or any Capital Stock of any Restricted
Subsidiary or any direct or indirect parent of the Company held by Persons
other than the Company or a Restricted Subsidiary of the Company, other
than in exchange for Capital Stock of the Company (other than Disqualified
Stock);
65
(3) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Obligations or Guarantor
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations or Guarantor Subordinated
Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due
within one year of the date of purchase, repurchase or acquisition); or
(4) make any Restricted Investment in any Person
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Restricted Investment referred to in the
preceding clauses (1) through (4) of this Section 408(a) shall be referred to
--------------
herein as a "Restricted Payment"), if at the time the Company or such Restricted
------------------
Subsidiary makes such Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing (or would result from the Restricted Payment); or
(B) the Company is not able to incur an additional $1.00 of
Indebtedness pursuant to Section 406(a) after giving effect to such
--------------
Restricted Payment; or
(C) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to the Issue
Date would exceed the sum of:
(i) 50% of Consolidated Net Income for the period
(treated as one accounting period) from the beginning of the
first fiscal quarter commencing after the Issue Date to the
end of the most recent fiscal quarter ending prior to the date
of such Restricted Payment for which consolidated financial
statements of the Company have been delivered to the Trustee
in accordance with Section 404 (or, in case such Consolidated
-----------
Net Income is a deficit, minus 100% of such deficit);
(ii) the aggregate Net Cash Proceeds received by the
Company from the issue or sale of its Capital Stock (other
than Disqualified Stock) or other capital contributions
subsequent to the Issue Date (other than Net Cash Proceeds
received from an issuance or sale of such Capital Stock to a
Subsidiary of the Company or to an employee stock ownership
plan, option plan or similar trust to the extent such sale to
an employee stock ownership plan, option plan or similar trust
is financed by loans
66
from or guaranteed by the Company or any Restricted Subsidiary
unless such loans have been repaid with cash on or prior to
the date of determination);
(iii) the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the
Company convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of
any cash, or other property, distributed by the Company upon
such conversion or exchange); and
(iv) the amount equal to the net reduction in Restricted
Investments made by the Company or any of its Restricted
Subsidiaries in any Person resulting from:
(A) repurchases or redemptions of such Restricted
Investments by such Person, proceeds realized upon the
sale of such Restricted Investment to an unaffiliated
purchaser, or repayments of loans or advances or other
transfers of assets (including by way of dividend or
distribution) by such Person to the Company or any
Restricted Subsidiary of the Company; or
(B) the redesignation of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to
exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by the Company or
any Restricted Subsidiary in such Unrestricted
Subsidiary,
which amount in each case under this clause (iv) was included
in the calculation of the amount of Restricted Payments;
provided, however, that no amount will be included under this
-------- -------
clause (iv) to the extent it is already included in
Consolidated Net Income.
(b) Section 408(a) will not prohibit:
--------------
(1) any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
or
67
an employee stock ownership plan or similar trust to the extent such sale to
an employee stock ownership plan or similar trust is financed by loans from or
guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination); provided,
--------
however, that (a) such purchase or redemption will be excluded in the
-------
calculation of the amount of Restricted Payments and (b) the Net Cash Proceeds
from such sale will be excluded from clause (4)(C)(ii) of Section 408(a);
-------------
(2) any purchase or redemption of Subordinated Obligations of the Company
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, Subordinated Obligations of the Company that qualifies as Refinancing
Indebtedness; provided, however, that such purchase or redemption will be
-------- -------
excluded in the calculation of the amount of Restricted Payments;
(3) so long as no Default or Event of Default has occurred and is
continuing, any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under Section 410; provided, however,
----------- -------- -------
that such purchase or redemption will be excluded in the calculation of the
amount of Restricted Payments;
(4) dividends paid within 60 days after the date of declaration if at such
date of declaration such dividend would have complied with this Section 408;
-----------
provided, however, that such dividends will be included in the calculation of
-------- -------
the amount of Restricted Payments;
(5) so long as no Default or Event of Default has occurred and is
continuing (or would result therefrom) loans or advances to employees or
directors of the Company or any Subsidiary of the Company the proceeds of
which are used to purchase Capital Stock of the Company other than
Disqualified Stock (or repurchases of such Capital Stock in exchange for
cancellation of such loans or advances), in an aggregate amount not in excess
of $2.0 million at any one time outstanding; provided, however, that (a) the
-------- -------
amount of such loans and advances will be included in the calculation of the
amount of Restricted Payments and (b) the Net Cash Proceeds from any such sale
of Capital Stock of the Company will be excluded from clause (4)(C)(ii) of
Section 408(a);
-------------
(6) repurchases of Capital Stock deemed to occur upon the exercise of
stock options if such Capital Stock represents a portion of the exercise price
thereof, provided, however, that such repurchases will be excluded from the
-------- -------
calculation of the amount of Restricted Payments;
(7) any purchase or redemption of (a) Disqualified Stock of the Company
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, Disqualified Stock of the Company that qualifies as
68
Refinancing Indebtedness or (b) Disqualified Stock of a Restricted Subsidiary
-
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, Disqualified Stock of such Restricted Subsidiary or the Company that
qualifies as Refinancing Indebtedness; provided, however, in each case under
-------- -------
this clause (7) that (i) such Refinancing Indebtedness is not issued or sold
-
to a Subsidiary or an employee stock ownership plan or similar trust to the
extent such sale to an employee stock ownership plan or similar trust is
financed by loans from or guaranteed by the Company or any Restricted
Subsidiary unless such loans have been repaid with cash on or prior to the
date of determination, (ii) at the time of such exchange, no Default or Event
--
of Default shall have occurred and be continuing or would result therefrom and
(iii) such purchase or redemption will be excluded in the calculation of the
---
amount of Restricted Payments;
(8) upon the occurrence of a Change of Control and within 60 days after
the completion of the offer to repurchase the Notes pursuant to Section 414
-----------
below (including the purchase of all Notes tendered), any purchase or
redemption of Subordinated Obligations required pursuant to the terms thereof
as a result of such Change of Control at a purchase or redemption price not to
exceed the outstanding principal amount thereof, plus accrued and unpaid
interest thereon, if any; provided, however, that (a) at the time of such
-------- -------
purchase or redemption, no Default shall have occurred and be continuing (or
would result therefrom), (b) the Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 406(a) after giving pro forma effect
-------------
to such Restricted Payment, (c) such purchase or redemption is not made,
directly or indirectly, from the proceeds of (or made in anticipation of) any
Incurrence of Indebtedness by the Company or any Subsidiary and (d) such
purchase or redemption will be included in the calculation of the amount of
Restricted Payments;
(9) purchases of Capital Stock of Restricted Subsidiaries from minority
holders, provided that upon giving effect to any such purchase of Capital
Stock of any Restricted Subsidiary, such Subsidiary shall be a Subsidiary
Guarantor; provided, however, that such purchases will be excluded in the
-------- -------
calculation of the amount of Restricted Payments;
(10) so long as no Default or Event of Default has occurred and is
continuing (or would result therefrom), an Investment in a minority interest
in a Person not engaged in any business other than a Related Business,
together with all other Investments pursuant to this clause (10), in an
aggregate amount at the time of such Investment not to exceed $10.0 million
outstanding at any one time (the amount of such Investment outstanding at any
time to be equal to its original cost minus the net proceeds realized by the
Company upon repurchase, repayment or redemption thereof, or sale thereof to
an unaffiliated purchaser, but not less than zero) (any such Person, a
"Permitted Joint Venture"); provided, however, that such Investments (a) will
----------------------- -------- ------- -
be included in the calculation of the amount of
69
Restricted Payments and (b) will be excluded in calculating any net
reduction-in Restricted Investments for purposes of clause (4)(C)(iv)
of Section 408(a);
-------------
(11) Restricted Payments in an amount not to exceed $20.0
million in the aggregate; and
(12) the repayment of the Company's 10% Senior Subordinated
Notes due December 15, 2008 and November 19, 2009 with the net
proceeds from the initial sale of the Notes.
The amount of all Restricted Payments, other than cash, shall be the
fair market value on the date of such Restricted Payment of the asset(s) or
securities proposed to be paid, transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount
and any non-cash Restricted Payment shall be determined by the Board of
Directors acting in good faith whose resolution with respect thereto shall be
delivered in writing to the Trustee. 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 408 were
-----------
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
Section 409. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
- -----------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any Restricted Subsidiary;
(2) make any loans or advances to the Company or any
Restricted Subsidiary; or
(3) transfer any of its property or assets to the Company or
any Restricted Subsidiary.
(b) This Section 409 will not prohibit:
-----------
(i) any encumbrance or restriction pursuant to an agreement
as in effect at or entered into on the Issue Date, including, without
limitation, the
70
Indenture and the Senior Credit Agreement and any governing agreements
or instruments of Existing Joint Venture Subsidiaries, in each case as
in effect on such date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by a Restricted Subsidiary on or before the date
on which such Restricted Subsidiary was acquired by the Company (other
than Indebtedness Incurred as consideration in, or to provide all or
any portion of the funds utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the
Company, or in contemplation of the transaction) and outstanding on
such date;
(iii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement effecting a refinancing
of Indebtedness Incurred pursuant to an agreement referred to in
Section 409(b)(i) or (ii) or this Section 409(b)(iii) or contained in
---------------- ---- ------------------
any amendment to an agreement referred to in Section 409(b)(i) or (ii)
---------------- ----
or this Section 409(b)(iii); provided, however, that the encumbrances
------------------
and restrictions with respect to such Restricted Subsidiary contained
in any such agreement or amendment are not less favorable to the
Holders of the Notes than the encumbrances and restrictions contained
in such agreements referred to in Section 409(b)(i) or (ii) on the
----------------- ----
Issue Date or the date such Restricted Subsidiary became a Restricted
Subsidiary, as applicable;
(iv) in the case of clause (3) of this Section 409, any
-----------
encumbrance or restriction:
(a) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset that
is subject to a lease, license or similar contract, or the
assignment or transfer of any such lease, license or other
contract;
(b) contained in mortgages, pledges or other security
agreements permitted under the Indenture securing Indebtedness of
the Company or a Restricted Subsidiary to the extent such
encumbrances or restrictions restrict the transfer of the
property subject to such mortgages, pledges or other security
agreements;
(c) pursuant to customary provisions restricting
dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any Restricted
Subsidiary; or
(d) imposed by purchase money obligations for property
acquired in the ordinary course of business, on the property so
acquired;
71
(v) any restriction with respect to a Restricted
Subsidiary (or any of its property or assets) imposed pursuant to
an agreement entered into for the direct or indirect sale or
disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary (or the property or assets
that are subject to such restriction) pending the closing of such
sale or disposition;
(vi) any restriction with respect to a Restricted
Subsidiary contained in any agreement or instrument governing
Capital Stock (other than Disqualified Stock) of any Restricted
Subsidiary that is in effect on the date such Restricted
Subsidiary is acquired by the Company (and is not incurred in
contemplation of such transaction);
(vii) encumbrances or restrictions arising or existing
by reason of applicable law or any applicable rule, regulation or
order; and
(viii) encumbrances or restrictions arising under
provisions in governing joint venture agreements or instruments
of any New Joint Venture Subsidiaries, provided that such
encumbrances and restrictions are not less favorable to the
Holders of the Notes than the encumbrances and restrictions
contained in the governing joint venture agreements or
instruments of Existing Joint Venture Subsidiaries referred to in
Section 409(b)(i) as in effect on the Issue Date.
----------------
Section 410. Limitation on Sales of Assets and Subsidiary
--------------------------------------------
Stock.
-----
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, make any Asset Disposition unless:
(1) The Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least
equal to the fair market value (including as to the value of all
non-cash consideration), as determined in good faith by the Board
of Directors, of the shares and assets subject to such Asset
Disposition;
(2) at least 75% of the consideration from such Asset
Disposition received by the Company or such Restricted
Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents; and
(3) an amount equal to 100% of the Net Available Cash
from such Asset Disposition is applied by the Company or such
Restricted Subsidiary, as the case may be:
(A) first, to the extent the Company or any
-----
Restricted Subsidiary, as the case may be, elects (or is
required by the terms of any Senior Indebtedness or
Guarantor Senior Indebtedness), to prepay, repay
72
or purchase Senior Indebtedness, Guarantor Senior
Indebtedness or, if such Restricted Subsidiary is a
Foreign Subsidiary, Indebtedness (other than any
Preferred Stock or any Indebtedness that is subordinate
or junior in right of payment to any other Indebtedness)
of such Foreign Subsidiary (in each case other than
Indebtedness owed to the Company or an Affiliate of the
Company) within 360 days from the later of the date of
such Asset Disposition or the receipt of such Net
Available Cash; provided, however, that, in connection
-------- -------
with any prepayment, repayment or purchase of
Indebtedness pursuant to this clause (A), the Company or
such Restricted Subsidiary will retire such Indebtedness
and will cause the related commitment (if any) to be
permanently reduced in an amount equal to the principal
amount so prepaid, repaid or purchased; and
(B) second, to the extent of the balance of such
------
Net Available Cash after application in accordance with
clause (A) above, to the extent the Company or such
Restricted Subsidiary elects, to invest in Additional
Assets within 360 days from the later of the date of such
Asset Disposition or the receipt of such Net Available
Cash.
(b) Any Net Available Cash from Asset Sales that are not
applied or invested as provided in Section 410(a) will be deemed to constitute
--------------
"Excess Proceeds." On the 361st day after an Asset Disposition, if the
---------------
aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be
required to make an offer ("Asset Sale Offer") to all Holders of Notes and, to
----------------
the extent required by the terms of other Senior Subordinated Indebtedness, to
all holders of other Senior Subordinated Indebtedness outstanding with similar
provisions requiring the Company to make an offer to purchase such Senior
Subordinated Indebtedness with the proceeds from any Asset Disposition ("Pari
----
Passu Notes"), to purchase the maximum principal amount of Notes and any such
----- -----
Pari Passu Notes to which the Asset Sale Offer applies that may be purchased
out of the Excess Proceeds, in accordance with the procedures set forth in the
Indenture or the agreements governing the Pari Passu Notes, as applicable, in
each case in integral multiples of $1,000 at an offer price in cash in an
amount equal to (x) in the case of the Notes, 100% of the principal amount of
the Notes, plus accrued and unpaid interest to the date of purchase, and (y)
in the case of the Pari Passu Notes, 100% of the lesser of the then accreted
value (if applicable) and the principal amount of the Pari Passu Notes, plus
accrued and unpaid interest to the date of purchase. To the extent that the
aggregate amount of Notes and Pari Passu Notes so validly tendered and not
properly withdrawn pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes, subject to the other covenants contained in the Indenture.
If the aggregate principal amount of Notes surrendered by Holders of the Notes
and other Pari Passu Notes surrendered by holders or lenders, collectively,
exceeds the amount of Excess Proceeds the Company shall select the Notes and
Pari Passu Notes to be purchased on a pro rata basis on the basis of the
aggregate principal amount of
73
tendered Notes and the lesser of the then aggregate accreted value and the
aggregate principal amount of the tendered Pari Passu Notes. Upon completion
of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at
zero.
(c) The Asset Sale Offer will remain open for a period of 20 Business
Days following its commencement, except to the extent that a longer period is
required by applicable law (the "Asset Sale Offer Period"). No later than five
-----------------------
Business Days after the termination of the Asset Sale Offer Period (the "Asset
-----
Sale Purchase Date"), the Company will purchase the principal amount of Notes
------------------
and Pari Passu Notes required to be purchased pursuant to this covenant (the
"Asset Sale Offer Amount") or, if less than the Asset Sale Offer Amount has
-----------------------
been so validly tendered, all Notes and Pari Passu Notes validly tendered in
response to the Asset Sale Offer.
If the Asset Sale Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest will be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest will be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
On or before the Asset Sale Purchase Date, the Company will, to the
extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Asset Sale Offer Amount of Notes and Pari Passu Notes or
portions of Notes and Pari Passu Notes so validly tendered and not properly
withdrawn pursuant to the Asset Sale Offer, or if less than the Asset Sale
Offer Amount has been validly tendered and not properly withdrawn, all Notes
and Pari Passu Notes so validly tendered and not properly withdrawn, in each
case in integral multiples of $1,000. The Company will deliver to the Trustee
an Officers' Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this
covenant and, in addition, the Company will deliver all certificates and notes
required, if any, by the agreements governing the Pari Passu Notes. The
Company will promptly (but in any case not later than five Business Days after
the termination of the Asset Sale Offer Period) mail or deliver to each
tendering Holder of Notes or holder or lender of Pari Passu Notes, as the case
may be, an amount equal to the purchase price of the Notes or Pari Passu Notes
so validly tendered and not properly withdrawn by such Holder or lender, as
the case may be, and accepted by the Company for purchase, and the Company
will promptly issue a new Note, and the Trustee, upon delivery of an Officers'
Certificate from the Company will authenticate and mail or deliver such new
Note to such Holder, in a principal amount equal to any unpurchased portion of
the Note surrendered; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple of $1,000. In addition, the Company
will take any and all other actions required by the agreements governing the
Pari Passu Notes. Any Note not so accepted will be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Asset Sale Offer on the Asset Sale Purchase Date.
74
(d) For the purposes of this Section 410, securities, notes or other
-----------
obligations received by the Company or any Restricted Subsidiary of the Company
from the transferee in such Asset Disposition that are promptly converted by the
Company or such Restricted Subsidiary into cash, will be deemed to be cash.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
-------------
or regulations in connection with the repurchase of Notes pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 410, the Company will
-----------
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue of any
conflict.
Section 411. Limitation on Affiliate Transactions.
------------------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or conduct any transaction
or series of related transactions (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Company or any Restricted Subsidiary (such transaction or transactions, an
"Affiliate Transaction") unless:
---------------------
(1) the terms of such Affiliate Transaction are no less favorable to
the Company or such Restricted Subsidiary, as the case may be, than those
that could be obtained in a comparable transaction at the time of such
transaction in arm's-length dealings with a Person who is not such an
Affiliate;
(2) in the event such Affiliate Transaction involves an aggregate
amount in excess of $5.0 million, the terms of such Affiliate Transaction
have been approved by a majority of the members of the Board of Directors
of the Company and by a majority of members of such Board having no direct
or indirect financial or other interest in such Affiliate Transaction (and
each such majority determines that such Affiliate Transaction satisfies the
criteria in clause (1) above; and
(3) in the event such Affiliate Transaction involves an aggregate
amount in excess of $15.0 million, the Company has received a written
opinion from an independent investment banking firm of nationally
recognized standing that such Affiliate Transaction is not less favorable
than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not
an Affiliate.
(b) Section 411(a) will not apply to:
--------------
75
(1) any Restricted Payment (other than a Restricted Investment)
permitted to be made pursuant to Section 408;
-----------
(2) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans and other fees,
compensation, benefits and indemnities paid or entered into by the Company
or its Restricted Subsidiaries in the ordinary course of business to or
with officers, directors or employees of the Company and its Restricted
Subsidiaries;
(3) loans or advances to employees in the ordinary course of business
of the Company or any of its Restricted Subsidiaries;
(4) the payment of reasonable and customary fees paid to, and
indemnity provided on behalf of, officers, directors or employees of the
Company or any Restricted Subsidiary of the Company;
(5) any transaction between the Company and a Subsidiary Guarantor or
between Subsidiary Guarantors;
(6) any transaction with a Non-Guarantor Subsidiary or Permitted
Joint Venture in the ordinary course of business that complies with the
requirements of clause (1) of Section 411(a);
--------------
(7) the performance of obligations of the Company or any of its
Restricted Subsidiaries under the terms of any agreement to which the
Company or any of its Restricted Subsidiaries is a party on the Issue Date
and identified on a schedule to the Indenture on the Issue Date, as these
agreements may be amended, modified or supplemented from time to time in
compliance with Section 411(a); and
--------------
(8) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company.
Section 412. Limitation on Liens. The Company will not, and will not permit
-------------------
any of its Restricted Subsidiaries to, directly or indirectly, create, incur or
suffer to exist any Lien (other than Permitted Liens) upon any property or
assets of the Company or any of its Restricted Subsidiaries (including Capital
Stock), whether owned on the date of the Indenture or acquired after that date,
securing any Indebtedness that ranks equally with, or is subordinate or junior
to, the Notes or any Subsidiary Guarantee in right of payment, unless
contemporaneously with the incurrence of such Lien effective provision is made
to secure the Indebtedness due under this Indenture and the Notes or, in the
case of a Lien on any Restricted Subsidiary's property or assets, any Subsidiary
Guarantee of such Restricted Subsidiary, equally and ratably with (or prior to,
in the case of Liens with
76
respect to Indebtedness that is subordinate or junior in right of payment to the
Notes or any Subsidiary Guarantee, as the case may be) the Indebtedness secured
by such Lien for so long as such Indebtedness is so secured.
Section 413. Future Subsidiary Guarantors. After the Issue Date, the
----------------------------
Company will cause each Restricted Subsidiary that is not then a Subsidiary
Guarantor, other than any Foreign Subsidiary, any New Joint Venture Subsidiary
or any Existing Joint Venture Subsidiary, to execute and deliver to the Trustee
a supplemental indenture substantially in the form set forth on Exhibit B
---------
providing a Subsidiary Guarantee pursuant to which such Subsidiary Guarantor
will unconditionally Guarantee, on a joint and several basis, the full and
prompt payment of the principal of, premium, if any, and interest on the Notes
on a senior subordinated basis.
The Company will cause any Domestic Subsidiary that becomes "100% owned"
(as defined in Section 3-10(h)(1) of Regulation S-X (Title 17, Code of Federal
------------------
Regulations, Part 210)) by the Company after the Issue Date to become a
Subsidiary Guarantor pursuant to this Section 413.
-----------
Notwithstanding the exception to the first paragraph of this Section 413,
neither the Company nor any Restricted Subsidiary shall create or acquire any
Non-Guarantor Subsidiary or designate any Restricted Subsidiary to be an
Unrestricted Subsidiary unless after giving effect to such creation, acquisition
or designation, all Non-Guarantor Subsidiaries and Unrestricted Subsidiaries
taken as a whole on a combined basis (including such Non-Guarantor Subsidiary or
Unrestricted Subsidiary) shall not account for more than 25% of EBITDA, and
shall not have total assets in an amount exceeding 17% of the total assets of
the Company and its Subsidiaries on a combined basis (including any
unconsolidated Subsidiaries, and adjusted to eliminate any intercompany
balances) as at the end of and for, the most recently ended four consecutive
fiscal quarters of the Company for which consolidated financial statements of
the Company have been delivered to the Trustee, in accordance with Section 404,
-----------
giving effect to such creation, acquisition or designation on a pro forma basis
as if such transaction had occurred at the beginning of such four-quarter
period.
The Company will cause each Subsidiary Guarantor to comply with all of the
provisions of, and to fully perform all of its obligations under, this Indenture
applicable to such Subsidiary Guarantor.
Section 414. Purchase of Notes Upon a Change in Control. Upon the
------------------------------------------
occurrence of a Change of Control, each Holder will have the right to require
the Company to repurchase all or any part (in integral multiples of $1,000) of
such Holder's Notes at a purchase price in cash equal to 101% of the principal
amount of the Notes plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date).
77
Within 30 days following any Change of Control, the Company will mail a
notice (the "Change of Control Offer") to each Holder, with a copy to the
Trustee, stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase its Notes at a purchase price
in cash equal to 101% of the principal amount of the Notes plus accrued
and unpaid interest, if any, to the date of purchase (subject to the right
of Holders of record on a record date to receive interest on the relevant
interest payment date) (the "Change of Control Payment");
-------------------------
(2) the repurchase date, which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed (the "Change of
---------
Control Payment Date"); and
--------------------
(3) the procedures determined by the Company, consistent with this
Indenture, that a Holder must follow in order to have its Notes
repurchased.
On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Notes or portions of Notes in integral
multiples of $1,000 properly tendered under the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes so tendered;
and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted, together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company.
The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail, or cause to be transferred by book entry, to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple of $1,000.
If the Change of Control Payment Date is on or after a Regular Record Date
or any other interest record date and on or before the related Interest Payment
Date, any accrued and unpaid interest, if any, will be paid to the Person in
whose name a Note is registered at the close of business on such record date,
and no additional interest will be payable to Holders who tender pursuant to the
Change of Control Offer.
Prior to mailing a Change of Control Offer, and as a condition to such
mailing, (i) all Senior Indebtedness must be repaid in full, or the Company must
-
offer to repay all Senior Indebtedness and repay all Senior Indebtedness held by
holders who accept such
78
offer or (ii) the requisite holders of each issue of Senior Indebtedness shall
--
have consented to such Change of Control Offer being made to the extent such
consent is required under the terms of such Senior Indebtedness and shall have
waived any event of default under such Senior Indebtedness, caused by the Change
of Control. The Company will effect such repayment or obtain such consent and
waiver within 30 days following any Change of Control.
If required by applicable law, the Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
The Change of Control provisions described above are applicable in the
event of a Change of Control, whether or not any other provisions of this
Indenture are applicable to such Change of Control.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
- -------------
in connection with the repurchase of Notes pursuant to this Section 414. To the
-----------
extent that the provisions of any securities laws or regulations conflict with
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations described in this Indenture by virtue of the conflict.
Section 415. Limitation on Sale of Capital Stock of Restricted
-------------------------------------------------
Subsidiaries. The Company will not, and will not permit any Restricted
- ------------
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of, (including, but not limited to, by means of a merger, consolidation, or
similar transaction) any Voting Stock of any Restricted Subsidiary or to issue
any of the Voting Stock of a Restricted Subsidiary (other than, if required by
applicable law, shares of its Voting Stock constituting directors' qualifying
shares) to, or merge or consolidate or engage in any similar transaction with,
any Person except:
(1) to or into the Company or a Wholly-Owned Subsidiary; or
(2) for the sale of all of the Voting Stock of a Restricted
Subsidiary to a Person other than the Company or a Subsidiary of the
Company in compliance with Section 410.
-----------
79
Section 416. Limitation on Lines of Business. The Company will not, and
-------------------------------
will not permit any Restricted Subsidiary to, engage in any business other than
a Related Business.
Section 417. Payments for Consent. Neither the Company nor any of its
--------------------
Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fees or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or amendment.
Section 418. Corporate Existence. Subject to the other provisions of this
-------------------
Article 4, Article 5 and Article 13, the Company will do or cause to be done all
- --------- --------- ----------
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Restricted Subsidiary and the corporate rights
(charter and statutory), licenses and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
-------- -------
to preserve any such existence (except that of the Company), right, license or
franchise if the Board of Directors of the Company shall reasonably determine in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of the Company and each of its Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not, and will not be, disadvantageous in
any material respect to the Holders, and provided, further, the Company may
merge in accordance with Section 501. Notwithstanding the foregoing, (i)
-----------
provided that the surviving entity in any such transaction is or shall be a
Restricted Subsidiary, subject to Section 413, any Non-Guarantor Subsidiary may
-----------
merge or consolidate (including any charter amendments required solely to effect
such merger or consolidation) with any other Non-Guarantor Subsidiary; (ii)
provided that the surviving entity in any such transaction is or shall be a
Subsidiary Guarantor, and provided further that such surviving Subsidiary
Guarantor expressly assumes all of the obligations under (a) the Indenture and
included Subsidiary Guarantee and (b) the Exchange and Registration Rights
Agreement, of any Subsidiary Guarantor that does not survive the transaction, by
executing and delivering to the Trustee a supplemental indenture satisfactory to
the Trustee, a Subsidiary Guarantor may merge or consolidate (including any
charter amendments required solely to effect such merger or consolidation) with
any other Subsidiary Guarantor; (iii) provided that the surviving entity in any
such transaction is or shall be a Subsidiary Guarantor, any Non-Guarantor
Subsidiary may merge or consolidate (including any charter amendments required
solely to effect such merger or consolidation) with any Subsidiary Guarantor;
and (iv) Non-Guarantor Subsidiaries may amend their organizational documents in
any way not inconsistent with this Indenture or disadvantageous in any material
respect to the Holders.
80
Section 419. 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, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a material
liability or lien upon the property of the Company or any Restricted Subsidiary;
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 whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Company), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
disadvantageous to the Holders.
Article 5
SUCCESSOR COMPANY
-----------------
Section 501. When the Company May Merge, etc. The Company will not
-------------------------------
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
---------
Company") will be a corporation organized and existing under the laws of
-------
the United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) will expressly assume all
the obligations of the Company under the Notes, this Indenture and the
Exchange and Registration Rights Agreement by executing and delivering to
the Trustee a supplemental indenture in form satisfactory to the Trustee;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
will have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company could Incur at least $1.00 of additional Indebtedness
pursuant to paragraph (a) of Section 406;
-----------
(iv) each Subsidiary Guarantor (other than any party to any such
consolidation or merger, in which case clause (i) shall apply) shall have
delivered a supplemental indenture in form satisfactory to the Trustee,
confirming that its Subsidiary Guarantee shall apply to the Successor
Company's obligations in
81
respect of the Indenture and the Notes and its obligations under the
Exchange and Registration Rights Agreement shall continue to be in effect;
and
(v) the Company will have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and each such supplemental indenture
complies with this Indenture.
For purposes of this Section 501, the sale, lease, conveyance, assignment,
-----------
transfer, or other disposition of all or substantially all of the properties and
assets of one or more Subsidiaries of the Company, which properties and assets,
if held by the Company instead of such Subsidiaries, would constitute all or
substantially all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
Clause (iii) of the first paragraph of this Section 501 will not apply to
-----------
any transaction in which (1) any Restricted Subsidiary consolidates with, merges
-
into or transfers all or part of its properties and assets to the Company or (2)
-
the Company consolidates or merges with or into or transfers all or
substantially all its assets to an Affiliate incorporated or organized for the
purpose of reincorporating or reorganizing the Company in another jurisdiction
to realize tax or other benefits.
Section 502. Successor Company Substituted. Upon any transaction involving
-----------------------------
the Company in accordance with Section 501, in which the Company is not the
Successor Company, the Successor Company will succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but, in the case of a lease of all or substantially all its assets,
the Company will not be released from the obligation to pay the principal of and
interest on the Notes.
Article 6
REMEDIES
--------
Section 601. Events of Default. Each of the following is an Event of
-----------------
Default:
(1) the Company defaults in any payment of interest or additional
interest (as required by the Exchange and Registration Rights Agreement) on
any Note when due or payable, and such default continues for 30 days,
whether or not such payment is prohibited by Article 14;
----------
(2) the Company defaults in the payment of principal of or premium,
if any, on any Note when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration of
82
acceleration or otherwise, whether or not such payment is prohibited by
Article 14;
----------
(3) the Company or any Subsidiary Guarantor fails to comply with
Article 5 or Section 414 of this Indenture;
--------- -----------
(4) the Company fails to comply with any of its obligations under
Article 4 (in each case, other than a failure or breach that constitutes a
Default or Event of Default governed by clause (1), (2) or (3) above) and
such failure or breach continues for 30 days after the Notice of Default
specified below;
(5) the Company fails to comply with any of its other covenants or
agreements in this Indenture or under the Notes (in each case, other than a
failure or breach that constitutes a Default or an Event of Default
governed by clause (1), (2), (3) or (4) above) and such failure or breach
continues for 60 days after the Notice of Default specified below;
(6) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness of the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), other than Indebtedness owed to the
Company or a Restricted Subsidiary, whether such Indebtedness or guarantee
now exists, or is created after the date of this Indenture, which default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness before the expiration of the
grace period provided in such Indebtedness; or
(b) results in the acceleration of such Indebtedness prior to
its maturity;
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been such a default or the maturity of which has been so accelerated,
aggregates $5.0 million or more;
(7) the Company or any Restricted Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
83
(C) consents to the appointment of a Custodian (as defined
below) of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any substantial part of their property; or
(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(9) failure by the Company or any Restricted Subsidiary to pay final
judgments aggregating in excess of $5.0 million (net of any amounts that a
reputable and creditworthy insurance company has acknowledged liability for
in writing), which judgments are not paid, discharged or stayed for a
period of 60 days; or
(10) any Subsidiary Guarantee of any Subsidiary Guarantor ceases to be
in full force and effect (except as contemplated by the terms of the
Indenture) or is declared null and void in a judicial proceeding or any
Subsidiary Guarantor denies or disaffirms its obligations under the
Indenture or its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is 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.
The term "Bankruptcy Law" means Title 11, United States Code, or any
-------------- ------------------
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
---------
similar official under any Bankruptcy Law.
84
Notwithstanding the foregoing, a Default under clause (4) or (5) of this
Section 601 will not constitute an Event of Default until the Trustee or the
- -----------
Holders of at least 25% in principal amount of the Outstanding Notes notify the
Company (and the Trustee in the case of a notice by Holders) of the Default and
the Company does not cure such Default within the time specified in such clause
(4) or (5) after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default under clause (3), (4), (5), (6), (7), (8), (9)
or (10) of this Section 601, which notice shall contain the status thereof and a
-----------
description of the action the Company is taking or proposes to take with respect
thereof.
Section 602. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default (other than an Event of Default specified in clause (7) or (8)
of Section 601) occurs and is continuing, the Trustee by notice to the Company,
-----------
or the Holders of at least 25% in principal amount of the Outstanding Notes by
notice to the Company and the Trustee, in either case specifying in such notice
the respective Event of Default and that such notice is a "notice of
acceleration," may, and the Trustee at the request of the Holders of at least
25% in principal amount of the Outstanding Notes shall, declare the principal
of, premium, if any and accrued but unpaid interest, if any, on all the Notes to
be due and payable. Upon such a declaration, such principal and interest will be
due and payable immediately. If an Event of Default specified in clause (7) or
(8) of Section 601 occurs and is continuing, the principal of, premium, if any,
-----------
and any accrued interest on all Notes will become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the Outstanding Notes
by notice to the Company and the Trustee may waive all past or existing Defaults
(except with respect to nonpayment of principal, premium or interest) and
rescind any such acceleration with respect to the Notes and its consequences if
(1) rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (2) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
waived. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
Section 603. Other Remedies; Collection Suit by Trustee. If an Event of
------------------------------------------
Default occurs and is continuing, the Trustee may, but is not obligated under
this Section 603 to, pursue any available remedy to collect the payment of
-----------
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture. If an Event of Default specified in
Section 601(1) or 601(2) occurs and is continuing, the Trustee may recover
- -------------- ------
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together
85
with interest on any unpaid interest to the extent lawful) and the amounts
provided for in Section 707.
-----------
Section 604. Trustee May File Proofs of Claim. The Trustee may file such
--------------------------------
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company or any other obligor upon the Notes, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make 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 its counsel, and any other amounts due the Trustee under Section
-------
707. The Trustee may take any other action with respect to such claims,
- ---
including participating as a member of any official committee of creditors
appointed in the matters as it deems necessary or advisable.
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 Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 605. Trustee May Enforce Claims Without Possession of Notes. All
------------------------------------------------------
rights of action and claims under this Indenture or the Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, 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 Notes in respect of which such judgment has been recovered.
Section 606. Application of Money Collected. Any money collected by the
------------------------------
Trustee pursuant to this Article 6 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 Notes 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
----- -------
707;
---
86
Second: to holders of Senior Indebtedness to the extent required by
------
Article 14;
----------
Third: to the payment of the amounts then due and unpaid upon the
-----
Notes for principal (and premium, if any) and interest, in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes for principal (and premium, if any) and interest,
respectively; and
Fourth: to the Company.
------
Section 607. Limitation on Suits. Except to enforce the right to receive
-------------------
payment of principal, premium, if any, or interest when due, no Holder may
pursue any remedy with respect to this Indenture or the Notes unless:
(1) such Holder has previously given the Trustee written notice
that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the
Outstanding Notes have requested the Trustee in writing to pursue the
remedy;
(3) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60
days after receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the
Outstanding Notes have not given the Trustee a direction that, in the
opinion of the Trustee, is inconsistent with the request during such 60-day
period.
A Holder may not use this Indenture to affect, disturb or prejudice the
rights of another Holder, to obtain a preference or priority over another Holder
or to enforce any right under this Indenture except in the manner herein
provided and for the equal and ratable benefit of all Holders.
Section 608. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
and Interest. Notwithstanding any other provision in this Indenture, the Holder
- ------------
of any Note shall have the absolute and unconditional right to receive payment
of the principal of and all (subject to Section 307) interest on such Note on
-----------
the respective Stated Maturity or Interest Payment Dates expressed in such Note
and to institute suit for the enforcement of any such payment on or after such
respective Stated Maturity or Interest Payment Dates, and such right shall not
be impaired without the consent of such Holder.
87
Section 609. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Note 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 the Company, any Subsidiary Guarantor, any other
obligor upon the Notes, the Trustee and the Holders shall, subject to any
determination in such proceeding, 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 610. Rights and Remedies Cumulative. No right or remedy herein
------------------------------
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 611. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Note 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 6 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 612. Control by Holders. The Holders of not less than a majority
------------------
in aggregate principal amount of the Outstanding Notes shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of 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, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture or, subject to Section 701, that the Trustee determines is
-----------
unduly prejudicial to the rights of other Holders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
-------- -------
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action under this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action. This Section
-------
612 shall
- ---
88
be in lieu of (S) 316(a)(1)(A) of the TIA, and such (S) 316(a)(1)(A) of the TIA
is hereby expressly excluded from this Indenture and the Notes, as permitted by
the TIA.
Section 613. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in aggregate principal amount of the Outstanding Notes may on behalf of
the Holders of all the Notes waive any past or existing Default hereunder and
its consequences, except a Default
(1) in the payment of the principal of (or premium, if any) or
interest on any Note (which may only be waived with the consent of each
Holder of Notes affected), or
(2) in respect of a covenant or provision hereof that pursuant
to the second paragraph of Section 902 cannot be modified or amended
-----------
without the consent of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon. In case of
any such waiver, the Company, any Subsidiary Guarantor, any other obligor upon
the Notes, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Notes, respectively. This paragraph
of this Section 613 shall be in lieu of (S) 316(a)(1)(B) of the TIA and such (S)
-----------
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Section 614. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture or the Notes, or in
any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant. This Section 614 shall not apply
-----------
to any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after the respective Stated Maturity or Interest Payment Dates
expressed in such Note.
Section 615. Waiver of Stay, Extension or Usury 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
89
or extension law or any usury or other similar law wherever enacted, now or at
any time hereafter in force, that would prohibit or forgive the Company from
paying all or any portion of the principal of (or premium, if any) or interest
on the Notes contemplated herein or in the Notes or that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it 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 7
THE TRUSTEE
-----------
Section 701. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture, but need not verify the
contents thereof.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that (i) this paragraph does not
-
limit the effect of paragraph (a) of this Section 701; (ii) the Trustee shall
----------- --
not be liable for any error of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in ascertaining the pertinent
facts; and (iii) the Trustee shall not be liable with respect to any
---
90
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 612.
-----------
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(e) 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 Sections 701 and
------------
703 hereof.
- ---
Section 702. Notice of Defaults. Within 90 days after the occurrence of
------------------
any Default, the Trustee shall transmit by mail to all Holders, as their names
and addresses appear in the Note Register, notice of such Default hereunder
known to the Trustee unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the
- -------- -------
principal of, premium, if any, or interest on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
Section 703. Certain Rights of Trustee. Subject to the provisions of
-------------------------
Section 701:
- -----------
(1) 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, 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;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
thereof, and any resolution of any Person's board of directors shall be
sufficiently evidenced if certified by an Officer of such Person as having
been duly adopted and being in full force and effect on the date of such
certificate;
(3) 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;
91
(4) 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;
(5) 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;
(6) 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, 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;
(7) 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;
(8) the Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in
fact such a Default is received by the Trustee at the Corporate Trust
Office, and such notice references the Notes or this Indenture; and
(9) any permissive right or authority granted to the Trustee
shall not be construed as a mandatory duty.
Section 704. Not Responsible for Recitals or Issuance of Notes. The
-------------------------------------------------
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, any Subsidiary
Guarantor and any other obligor upon the Notes, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Notes and
perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company,
any Subsidiary
92
Guarantor and any other obligor upon the Notes in connection with the
registration of any Notes and any Note Guarantees issued hereunder are and will
be true and accurate subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Notes or the proceeds thereof.
Section 705. May Hold Notes. The Trustee, any Authenticating Agent, any
--------------
Paying Agent, any Note Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Section 708 and Section 713, may otherwise deal with the Company or
----------- -----------
its Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note Registrar or such other agent.
Section 706. 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 707. Compensation and Reimbursement. The Company agrees,
------------------------------
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee 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 incurred 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 the Trustee's part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including
the 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. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses
of not more than one firm acting as such counsel. The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.
93
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, the expenses and the
----------------------
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The indemnification and agreement to hold harmless granted to the Trustee
by the Company in this Section 707 shall survive termination of this Indenture.
-----------
Section 708. Conflicting Interests. If the Trustee has or shall acquire a
---------------------
conflicting interest within the meaning of the TIA, 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 TIA and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Original Notes and Additional Notes, or a trustee under any other indenture
between the Company and the Trustee.
Section 709. Corporate Trustee Required; Eligibility. There shall at all
---------------------------------------
times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 709
-----------
and to the extent permitted by the TIA, 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
-------
709, it shall resign immediately in the manner and with the effect hereinafter
- ---
specified in this Article.
Section 710. Resignation and Removal; Appointment of Successor. 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 in accordance with the applicable
requirements of Section 711.
-----------
The Trustee may resign at any time by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 711 shall not have been delivered to the Trustee within 30 days after
- -----------
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
The Trustee may be removed at any time by Act of the Holders of a majority
in principal amount of the Outstanding Notes, delivered to the Trustee and to
the Company.
If at any time:
94
(1) the Trustee shall fail to comply with Section 708 after written
-----------
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 709 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
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed 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,
then, in any such case, (A) the Company by a board resolution may remove the
Trustee, or (B) subject to Section 614, any Holder who has been a bona fide
- -----------
Holder of a Note 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.
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 and shall comply
with the applicable requirements of Section 711. 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 Notes delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 711, become the successor Trustee and to that extent 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 required by Section 711, then, subject to Section 614, any Holder who has
----------- -----------
been a bona fide Holder of a Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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 110. Each notice shall include the name of the successor
-----------
Trustee and the address of its Corporate Trust Office.
Section 711. Acceptance of Appointment by Successor. In case of the
--------------------------------------
appointment hereunder of a successor Trustee, every such successor Trustee so
appointed 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
95
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 the 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. Notwithstanding the replacement of the
Trustee pursuant to this Section 711, the Company's obligations under Section
----------- -------
707 shall continue for the benefit of the retiring Trustee with regard to
- ---
expenses and liabilities incurred by it and compensation earned by it prior to
such replacement or otherwise under the Indenture.
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 referred to above.
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 7.
---------
Section 712. 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 7,
---------
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 713. Preferential Collection of Claims Against the Company. If and
-----------------------------------------------------
when the Trustee shall be or become a creditor of the Company (or any Subsidiary
Guarantor or other obligor upon the Notes), the Trustee shall be subject to the
provisions of the TIA regarding the collection of claims against the Company (or
any Subsidiary Guarantor or any such other obligor).
Section 714. Appointment of Authenticating Agent. The Trustee may appoint
-----------------------------------
an Authenticating Agent acceptable to the Company to authenticate the Notes. Any
such appointment shall be evidenced by an instrument in writing signed by a
Trust Officer, a copy of which instrument shall be promptly furnished to the
Company. Unless limited by the terms of such appointment, an Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication (or
96
execution of a certificate of authentication) by the Trustee includes
authentication (or execution of a certificate of authentication) by such
Authenticating Agent. An Authenticating Agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
Article 8
HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND THE COMPANY
--------------------------
Section 801. The Company to Furnish Trustee Names and Addresses of Holders.
-------------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(2) at such other times as the Trustee 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;
provided, however, that if and so long as the Trustee shall be the Note
- -------- -------
Registrar, no such list need be furnished pursuant to this Section 801.
-----------
Section 802. Preservation of Information; Communications to Holders. 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, if any,
furnished to the Trustee as provided in Section 801 and the names and addresses
-----------
of Holders received by the Trustee in its capacity as Note Registrar; provided,
--------
however, that if and so long as the Trustee shall be the Note Registrar, the
- -------
Note Register shall satisfy the requirements relating to such list. None of the
Company, any Subsidiary Guarantor, any other obligor upon the Notes or the
Trustee or any other Person shall be under any responsibility with regard to the
accuracy of such list. The Trustee may destroy any list furnished to it as
provided in Section 801 upon receipt of a new list so furnished.
-----------
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the TIA.
Every Holder of Notes, 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 names and addresses of Holders made pursuant to the TIA.
97
Section 803. Reports by Trustee. If such report is required by TIA Section
------------------
313, within 60 days after each June 1 beginning with June 1, 2002 the Trustee
shall mail to each Holder a brief report dated as of such June 1 that complies
with Section 313(a). The Trustee shall transmit to Holders such other reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the TIA at the times and in the manner provided pursuant thereto. 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 any Notes are listed,
with the SEC and with the Company. The Company will notify the Trustee when any
Notes are listed on any stock exchange.
Article 9
AMENDMENT, SUPPLEMENT OR WAIVER
--------- --------------------
Section 901. Without Consent of Holders. Without the consent of the Holders
--------------------------
of any Notes, the Company, the Trustee and (as applicable) any Subsidiary
Guarantor may enter into one or more indentures supplemental hereto in form and
substance satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, omission, defect or inconsistency,
(2) to provide for the assumption by a successor of the
obligations of the Company under this Indenture,
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes, provided, however, that the uncertificated Notes are
-------- -------
issued in registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code,
(4) to add Guarantees with respect to the Notes or to secure the
Notes,
(5) to add to the covenants of the Company for the benefit of the
Noteholders or to surrender any right or power conferred upon the Company,
(6) to make any change that does not adversely affect the rights
of any Holder under the Notes or this Indenture, or
(7) to comply with any requirement of the SEC in connection with
the qualification of this Indenture under the TIA or otherwise.
Section 902. With Consent of Holders. Subject to Section 608, the Company,
----------------------- -----------
the Trustee and (if applicable) any Subsidiary Guarantor may amend or supplement
this Indenture or the Notes with the written consent of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of or tender offer or exchange offer for
98
Notes), and the Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes by written notice to the Trustee (including,
without limitation, consents obtained in connection with a purchase of or tender
offer or exchange offer for Notes) may, subject to Section 613, waive any past
or existing Default or Event of Default or compliance by the Company or any
Subsidiary Guarantor with any provision of this Indenture, the Notes or any
Subsidiary Guarantee.
Notwithstanding the provisions of this Section 902, without the consent of
-----------
each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 613, may not:
- -----------
(i) reduce the principal amount of the Notes whose Holders must
consent to an amendment or waiver;
(ii) reduce the stated rate of or extend the stated time for
payment of interest on any Note;
(iii) reduce the principal of or extend the Stated Maturity of any
Note;
(iv) reduce the premium payable upon the redemption or repurchase
of any Note or change the time at which any Note may be required to be
redeemed or repurchased as described in Section 1001 or any similar
------------
provision, whether through an amendment or waiver of provisions in such
Section 1001 or similar provision or any related definition or otherwise;
(v) make any Note payable in money other than that stated in the
Note;
(vi) impair the right of any Holder to receive payment of, premium,
if any, principal of and interest on such Holder's Notes on or after the
due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Notes; or
(vii) make any change in the amendment provisions described in this
Section 902 or the waiver provisions described in Section 613.
Notwithstanding Section 901 and the foregoing provisions of this Section
----------- -------
902, no amendment to Article 14 or Article 15, respectively, or the definitions
- --- ---------- ----------
relating thereto that adversely affects the rights of any Holder of Senior
Indebtedness or Guarantor Senior Indebtedness, respectively, at the time
outstanding may be made unless the holders of such Senior Indebtedness or
Guarantor Senior Indebtedness (or any group or representative thereof authorized
to give a consent) consent in writing to such amendment.
99
It shall not be necessary for the consent of the Holders under this Section
-------
902 to approve the particular form of any proposed amendment, supplement or
- ---
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under Section 901 or this Section
----------- -------
902 becomes effective, the Company shall mail to the Holders of each Note
- ---
affected thereby, with a copy to the Trustee, 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 supplemental indenture or effectiveness of any such amendment,
supplement or waiver.
Section 903. Execution of Amendments, Supplements or Waivers. The Trustee
----------------------- ----------------------
shall sign any amendment, supplement or waiver authorized pursuant to this
Article 9 if the amendment, supplement or waiver does not adversely affect the
- ---------
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver is authorized or permitted by this Indenture and has been
duly authorized, executed and delivered by the Company and that, subject to
applicable bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
reorganization, moratorium and other laws now or hereinafter in effect affecting
creditors' rights or remedies generally and the general principles of equity
(including, without limitation, standards of materiality, good faith, fair
dealing and reasonableness), whether considered in a proceeding at law or at
equity, such amendment, supplement or waiver is a valid and binding agreement of
the Company, enforceable against it in accordance with its terms.
Section 904. Revocation and Effect of Consents. Until an amendment,
---------------------------------
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 904, any such Holder or subsequent Holder
-----------
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Company received by the Trustee or the Company, as the case may be, before the
date on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver as set forth in Section 108.
-----------
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder of Notes, unless it makes a change described in any of clauses (i)
through (viii) of the second paragraph of Section 902. In that case, the
-----------
amendment, supplement or waiver
100
shall bind each Holder of a Note who has consented to it and every subsequent
Holder of such Note or any Note that evidences all or any part of the same debt
as the consenting Holder's Note.
Section 905. Conformity with TIA. Every amendment or supplemental
-------------------
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 906. Notation on or Exchange of Notes. If an amendment,
--------------------------------
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder of the Note to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Note shall issue and the Trustee shall authenticate a new
Note that reflects the changed terms. Failure to make the appropriate notation
or issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.
Article 10
REDEMPTION OF NOTES
-------------------
Section 1001. Right of Redemption.
-------------------
(a) Except as set forth in this Section 1001, the Notes will not be
------------
redeemable at the option of the Company prior to June 15, 2005. The Notes will
be redeemable, at the Company's option, in whole or in part, and from time to
time on and after June 15, 2005 and prior to maturity. Such redemption may be
made upon notice mailed by first-class mail to each Holder's registered address
in accordance with Section 1005. The Notes will be so redeemable at the
------------
following Redemption Prices (expressed as a percentage of principal amount),
plus accrued and unpaid interest, if any, to the relevant Redemption Date
(subject to Section 307 and to the right of Holders of record on the relevant
-----------
record date to receive interest due on the relevant Interest Payment Date), if
redeemed during the 12-month p eriod commencing on June 15 of the years set
forth below:
Period Redemption
------
Price
------------
2005............................... 104.750%
2006............................... 103.167%
2007............................... 101.583%
2008 and thereafter................ 100.000%
101
(b) In addition, at any time and from time to time prior to June 15, 2004,
the Company at its option may redeem the Notes in an aggregate principal amount
equal to up to 35% of the original aggregate principal amount of the Notes
(including the principal amount of any Additional Notes), with the Net Cash
Proceeds of one or more Equity Offerings, at a Redemption Price of 109.5% of the
principal amount of the Notes, plus accrued and unpaid interest, if any, to the
Redemption Date (subject to Section 307 and to the right of Holders of record on
-----------
the relevant record date to receive interest due on the relevant Interest
Payment Date); provided, however, that an aggregate principal amount of the
-------- -------
Notes equal to at least 65% of the original aggregate principal amount of the
Notes (including the principal amount of any Additional Notes) must remain
outstanding after each such redemption and such redemption must occur within 90
days after the closing of the Equity Offering. The Company may make such
redemption upon notice mailed by first-class mail to each Holder's registered
address in accordance with Section 1005.
------------
Section 1002. Applicability of Article. Redemption of Notes as permitted by
------------------------
Section 1001 shall be made in accordance with this Article 10.
- ------------ ----------
Section 1003. Election to Redeem; Notice to Trustee. In case of any
-------------------------------------
redemption at the election of the Company of less than all of the Notes, the
Company shall, at least 45 days prior to the Redemption Date initially 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 Notes
to be redeemed.
Section 1004. Selection by Trustee of Notes to Be Redeemed. In the case of
--------------------------------------------
any partial redemption, selection of the Notes for redemption will be made not
more than 60 days prior to the Redemption Date by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed, or if the notes are not listed, then on a pro rata basis,
--- ----
by lot or by such other method as the Trustee in its sole discretion shall deem
to be fair and appropriate, although no Note of $1,000 in original principal
amount or less will be redeemed in part.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. On and after the
Redemption Date, interest will cease to accrue on Notes or portions thereof
called for redemption.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Notes shall relate, in the case of
any Note redeemed or to be redeemed only in part, to the portion of the
principal of such Note that has been or is to be redeemed.
The Company shall certify to the Trustee, from time to time, if the Notes
are listed on a national securities exchange and absent receipt of any such
certification from
102
the Company, the Trustee shall be entitled to assume in good faith that the
Notes are not listed on a national securities exchange.
Section 1005. Notice of Redemption. Notice of redemption or purchase as
--------------------
provided in Section 1001 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 Notes to be redeemed, at such Holder's address appearing in the
Note Register.
Any such notice shall state:
(1) the expected Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Note, and that, unless the Company defaults
in making such redemption payment or the Paying Agent is prohibited from
making such payment pursuant to the terms of this Indenture, interest
thereon shall cease to accrue from and after said date,
(5) the place where such Notes are to be surrendered for payment
of the Redemption Price, and
(6) the CUSIP and other security identification numbers, if any,
subject to Section 311 hereof.
-----------
Notice of such redemption or purchase of Notes to be so redeemed or
purchased 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.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. In
any case, failure to give such notice by mail or any defect in the notice to the
Holder of any Note designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Note.
Section 1006. Deposit of Redemption Price. On or 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, the Company shall segregate and
hold in trust as provided in Section 403) an amount of money sufficient to pay
-----------
the Redemption
103
Price of, and any accrued and unpaid interest on, all the Notes or portions
thereof which are to be redeemed on that date.
Section 1007. Notes Payable on Redemption Date. Notice of redemption having
--------------------------------
been given as provided in this Article 10, the Notes so to be redeemed shall, on
----------
the Redemption Date, become due and payable at the Redemption Price herein
specified and from and after such date (unless Company shall default in the
payment of the Redemption Price or the Paying Agent is prohibited from paying
the Redemption Price pursuant to the terms of this Indenture) such Notes shall
cease to bear interest. Upon surrender of such Notes for redemption in
accordance with such notice, such Notes shall be paid by the Company at the
Redemption Price. Installments of interest whose Interest Payment Date is on or
prior to the Redemption Date shall be payable to the Holders of such Notes
registered as such on the relevant Regular Record Dates according to their terms
and the provisions of Section 307.
-----------
On and after any Redemption Date, if money sufficient to pay the Redemption
Price of and any accrued and unpaid interest on Notes called for redemption
shall have been made available in accordance with Section 1006, the Notes (or
------------
the portions thereof) called for redemption will cease to accrue interest and
the only right of the Holders of such Notes (or portions thereof) will be to
receive payment of the Redemption Price of and subject to the last sentence of
the preceding paragraph of this Section 1007, any accrued and unpaid interest on
------------
such Notes (or portions thereof) to the Redemption Date. If any Note (or portion
thereof) called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest
from the Redemption Date at the rate borne by the Note (or portion thereof).
Section 1008. Notes Redeemed in Part. Any Note that is to be redeemed only
----------------------
in part shall be surrendered at the Place of Payment (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
Note without service charge, a new Note or Notes, 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 Note so surrendered.
Article 11
SATISFACTION AND DISCHARGE
--------------------------
Section 1101. Satisfaction and Discharge of Indenture. This Indenture shall
---------------------------------------
cease to be of further effect (except as to any surviving rights of transfer or
exchange of Notes herein expressly provided for), and the Trustee, on demand of
and at the expense
104
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 306, and (ii) Notes 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 403) have been delivered
-----------
to the Trustee cancelled or for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee
cancelled or 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 reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company,
(2) the Company has deposited or caused to be deposited with the Trustee
an amount in United States dollars, U.S. Government Obligations, or a
combination thereof, sufficient to pay and discharge the entire Indebtedness
on such Notes not theretofore delivered to the Trustee cancelled or for
cancellation, for principal (and premium, if any) and interest to the date of
such deposit (in the case of Notes that have become due and payable), or to
the Stated Maturity or Redemption Date, as the case may be;
(3) the Company has paid or caused to be paid all other sums then payable
hereunder by the Company; and
(4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each to the effect that all conditions precedent
provided for in this Section 1101 relating to the satisfaction and discharge
------------
of this Indenture have been complied with, provided that any such counsel may
--------
rely on any Officers' Certificate as to matters of fact (including as to
compliance with the foregoing clauses (1), (2) and (3)).
105
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 707 and, if money shall
-----------
have been deposited with the Trustee pursuant to clause (2) of this Section
-------
1101, the obligations of the Trustee under Section 1102, shall survive.
- ---- ------------
Section 1102. Application of Trust Money. Subject to the provisions of
--------------------------
the last paragraph of Section 403, all money deposited with the Trustee pursuant
-----------
to Section 1101 shall be held in trust and applied by it, in accordance with the
------------
provisions of the Notes 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 on the Notes; but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE 12
DEFEASANCE OR COVENANT DEFEASANCE
---------------------------------
Section 1201. The Company's Option to Elect Defeasance or Covenant
----------------------------------------------------
Defeasance. The Company may, at its option, at any time, elect to have
- ----------
discharged the obligations of the Company with respect to the Outstanding Notes
and to have terminated the obligations of any or all Subsidiary Guarantors with
respect to the Subsidiary Guarantees, as the case may be, in each case and to
the extent as set forth in this Article 12, and elect to have either Section
----------- -------
1202 or Section 1203 be applied to all of the Outstanding Notes (the "Defeased
- ---- ------------ --------
Notes"), upon compliance with the conditions set forth in Section 1204. Either
- ----- ------------
Section 1202 or Section 1203 may be applied to the Defeased Notes to any
- ------------ ------------
Redemption Date or the Stated Maturity of the Notes.
Section 1202. Defeasance and Discharge. Upon the Company's exercise
------------------------
under Section 1201 of the option applicable to this Section 1202, the Company
------------ ------------
shall be deemed to have been released and discharged from its obligations with
respect to the Defeased Notes on the date the relevant conditions set forth in
Section 1204 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 Defeased Notes, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
-------
1205 and the other Sections of this Indenture referred to in clauses (a) and (b)
- ----
below, and the Company and each of the Subsidiary Guarantors shall be deemed to
have satisfied all other obligations under such Notes and this Indenture insofar
as such Notes 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 Defeased Notes to receive, solely from
-
the trust fund described in Section 1204 and as more fully set forth in such
------------
Section, payments in respect of the principal of and premium, if any, and
interest on such Notes when such payments are due, (b) the Company's obligations
-
with respect to such Defeased Notes under Sections 304, 305,
------------ ---
106
306, 402 and 403, (c) the rights, powers, trusts, duties and immunities of the
- --- --- --- -
Trustee hereunder, including the Trustee's rights under Section 707, and (d)
----------- -
this Article 12. Subject to compliance with this Article 12, the Company may, at
---------- ----------
its option and at any time, exercise its option under this Section 1202
------------
notwithstanding the prior exercise of its option under Section 1203 with respect
------------
to the Notes.
Section 1203. Covenant Defeasance. Upon the Company's exercise under
-------------------
Section 1201 of the option applicable to this Section 1203, (a) the Company and
- ------------ ------------ -
any Subsidiary Guarantors shall be released from their respective obligations
under any covenant or provision contained in Section 404 and Sections 406
----------- ------------
through 417 and the provisions of clause (iii) of Section 501 shall not apply,
--- -----------
and (b) the occurrence of any event specified in clause (3) (with respect to
-
clause (iii) of Section 501), (4) and (5) (with respect to Section 404, Sections
----------- ----------- --------
406 through 417, inclusive, and any such covenants provided pursuant to Section
- --- --- -------
901(5)), inclusive, (6), (7) or (8) (with respect only to Restricted
- -----
Subsidiaries), (9) or (10) of Section 601 shall be deemed not to be or result in
-----------
an Event of Default, in each case with respect to the Defeased Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not to be
-------------------
"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 or provisions, but shall continue to be deemed "Outstanding" for all
other purposes hereunder. For this purpose, such Covenant Defeasance means that,
with respect to the Outstanding Notes, the Company and any Subsidiary Guarantors
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant or provision, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or provision or by reason of any reference in any such covenant or
provision to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 601, but, except as specified above, the remainder of this Indenture and
- -----------
such Outstanding Notes shall be unaffected thereby.
Section 1204. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of either Section 1202 or
------------
Section 1203 to the Outstanding Notes:
- ------------
(1) The Company shall have irrevocably deposited with the Trustee in
trust (i) cash, in United States dollars in an amount, or (ii) 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 the one Business Day before the due date of any
payment, cash in amount or (iii) a combination of (i) and (ii), as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge the principal of,
and premium, if any, and interest on the Defeased Notes on (in the case
of
107
principal and premium) and to (in the case of interest) the Stated
Maturity or relevant Redemption Date in accordance with the terms of
this Indenture and the Notes;
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Section 601(8) or
-------------
601(9) is concerned, at any time during the period ending on the
-----
ninety-first day after the date of such deposit;
(3) Such deposit shall not result in a breach or violation of, or
constitute a Default or Event of Default under, this Indenture or any
other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(4) In the case of an election under Section 1202, the Company shall
------------
have delivered to the Trustee an Opinion of Counsel from a firm of
outside counsel reasonably satisfactory to the Trustee to the effect
that (x) the Company has received from, or there has been published by,
-
the Internal Revenue Service a ruling or (y) since the Issue Date, 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 to
the effect that, the Holders of the Outstanding Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such
Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Defeasance had not occurred;
(5) In the case of an election under Section 1203, the Company shall
------------
have delivered to the Trustee an Opinion of Counsel from a firm of
outside counsel to the effect that the Holders of the Outstanding Notes
will not recognize income, gain or loss for Federal income tax purposes
as a result of such Covenant Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not
occurred; and
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel from a firm of outside counsel,
each to the effect that all conditions precedent provided for in this
Section 1204 relating to either the Defeasance under Section 1202 or the
------------ ------------
Covenant Defeasance under Section 1203, as the case may be, have been
------------
complied with.
From and after the time of any deposit pursuant to clause (1) of the
first paragraph of this Section 1204, the money or U.S. Government Obligations
------------
so deposited shall not be subject to the rights of the holders of Senior
Indebtedness or Guarantor Senior Indebtedness pursuant to the subordination
provisions of Article 14 or Article 15.
---------- ----------
108
Section 1205. 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 403, all money and U.S. Government Obligations (including
-----------
the proceeds thereof) deposited with the Trustee (or such other Person that
would qualify to act as successor trustee under Article 7, collectively and
---------
solely for purposes of this Section 1205, Section 1412 and Section 1512, the
------------ ------------ ------------
"Trustee") pursuant to Section 1204 in respect of the Defeased Notes shall be
------------
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes 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 Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee and its agents and hold
them harmless against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to Section 1204 or
------------
the principal, premium, if any, and interest received in respect thereof, other
than any such tax, fee or other charge that by law is for the account of the
Holders of the Defeased Notes.
Anything in this Article 12 to the contrary notwithstanding, the
----------
Trustee shall deliver to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1204
------------
hereof that, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof to the Trustee,
are in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Defeasance or Covenant Defeasance. Subject to Article 7,
---------
the Trustee shall not incur any liability to any Person by relying on such
opinion.
Section 1206. Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any money or U.S. Government Obligations in accordance with Section 1202
------------
or 1203, as the case may be, by reason of any order or judgment of any court or
----
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company, the Subsidiary Guarantors and
any other obligor upon the Notes under this Indenture, the Notes and any
Subsidiary Guarantees shall be revived and reinstated as though no deposit had
occurred pursuant to Section 1202 or 1203, as the case may be, until such time
------------ ----
as the Trustee or Paying Agent is permitted to apply all such money and U.S.
Government Obligations in accordance with Section 1202 or 1203, as the case may
------------ ----
be; provided, however, that if the Company, any Subsidiary Guarantor or any
-------- -------
other obligor upon the Notes makes any payment of principal, premium, if any, or
interest on any Note following the reinstatement of its obligations, then the
Company, any Subsidiary Guarantor and any other obligor upon the Notes shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money and U.S. Government Obligations held by the Trustee or Paying
Agent.
109
Section 1207. Repayment to the Company. The Trustee shall pay to the
------------------------
Company upon Company Request any money held by it for the payment of principal
or interest that remains unclaimed for two years. After payment to the Company,
Holders entitled to money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person
and all liability of the Trustee or Paying Agent with respect to such money
shall thereupon cease.
ARTICLE 13
SUBSIDIARY GUARANTEES
---------------------
Section 1301. Guarantees Generally.
--------------------
(a) Subsidiary Guarantees. Any Subsidiary Guarantor from time to time
---------------------
party hereto, as primary obligor and not merely as surety, hereby jointly and
severally, irrevocably and fully and unconditionally Guarantees, on a senior
subordinated basis, the punctual payment when due, whether at Stated Maturity,
by acceleration or otherwise, of all monetary obligations of the Company under
this Indenture and the Notes, whether for principal of or interest on the Notes,
expenses, indemnification or otherwise (all such obligations guaranteed by such
Subsidiary Guarantors being herein called the "Guaranteed Obligations").
----------------------
Any term or provision of this Indenture notwithstanding, each Subsidiary
Guarantee shall not exceed the maximum amount that can be guaranteed by the
applicable Subsidiary Guarantor without rendering the Subsidiary Guarantee, as
it relates to such Subsidiary Guarantor, voidable under applicable law relating
to fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
(b) Further Agreements of Subsidiary Guarantors.
(i) Each Subsidiary Guarantor hereby waives (to the fullest extent
permitted by law) the benefit of diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and
covenants that (except as otherwise provided in Section 1303) its
------------
Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture,
and its Subsidiary Guarantee. Such Subsidiary Guarantee is a guarantee
of payment and not of collection. Each Subsidiary Guarantor further
agrees (to the fullest extent permitted by law) that, as between it, on
the one hand, and the Holders of Notes and the Trustee, on the other
hand, subject to this Article 13 and
----------
110
Article 15, (1) the maturity of the obligations guaranteed by its
---------- -
Subsidiary Guarantee may be accelerated as and to the extent provided in
Article 6 for the purposes of such Subsidiary Guarantee notwithstanding
---------
any stay, injunction or other prohibition preventing such acceleration
in respect of the obligations guaranteed by such Subsidiary Guarantee,
and (2) in the event of any acceleration of such obligations as provided
-
in Article 6, such obligations (whether or not due and payable) shall
---------
forthwith become due and payable by such Subsidiary Guarantor in
accordance with the terms of this Section 1301 for the purpose of such
------------
Subsidiary Guarantee. Neither the Trustee nor any other Person shall
have any obligation to enforce or exhaust any rights or remedies or to
take any other steps under any security for the Guaranteed Obligations
or against the Company or any other Person or any property of the
Company or any other Person before the Trustee is entitled to demand
payment and performance by any or all Subsidiary Guarantors of their
obligations under their respective Subsidiary Guarantees or under this
Indenture.
(ii) Until terminated in accordance with Section 1303, each
------------
Subsidiary Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent
or make an assignment for the benefit of creditors or should a receiver
or trustee be appointed for all or any significant part of the Company's
assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time
payment and performance of the Notes are, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on such Notes, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or returned, the
Notes shall, to the fullest extent permitted by law, be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
(c) Each Subsidiary Guarantor that makes a payment or distribution under
any Subsidiary Guarantee shall have the right to seek contribution from the
Company or any non-paying Subsidiary Guarantor that has also Guaranteed the
Guaranteed Obligations in respect of which such payment or distribution is made,
so long as the exercise of such right does not impair the rights of the Holders
under this Subsidiary Guarantee.
(d) Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by this
Indenture and that its Subsidiary Guarantee and the waiver set forth in Section
-------
1305 is knowingly made in contemplation of such benefits.
- ----
111
(e) Each Subsidiary Guarantor also hereby agrees to pay any and all
out-of-pocket expenses (including counsel fees and expenses) incurred by the
Trustee or the Holders in enforcing any rights under its Subsidiary Guarantee.
Section 1302. Continuing Guarantees. Each Subsidiary Guarantee shall be
---------------------
a continuing Guarantee and shall (i) remain in full force and effect until
-
payment in full of the principal amount of all outstanding Notes (whether by
payment at maturity, purchase, redemption, defeasance, retirement or other
acquisition) and all other Guaranteed Obligations then due and owing, unless
earlier terminated as provided in Section 1303, (ii) be binding upon such
------------ --
Subsidiary Guarantor and (iii) inure to the benefit of and be enforceable by the
---
Trustee, the Holders and their permitted successors, transferees and assigns.
Section 1303. Release of Subsidiary Guarantees. Notwithstanding the
--------------------------------
provisions of Section 1302 any Subsidiary Guarantee will be subject to
------------
termination and discharge under the circumstances described in this Section
-------
1303:
- ----
(a) Any Subsidiary Guarantor will automatically and unconditionally be
released from all obligations under its Subsidiary Guarantee, and such
Subsidiary Guarantee shall thereupon terminate and be discharged and of no
further force or effect, (i) concurrently with any sale or disposition (whether
-
by merger, consolidation, the sale of its Capital Stock or the sale of all or
substantially all of its assets, other than by lease) and whether or not the
Subsidiary Guarantor is the surviving corporation in such transaction, to a
Person which is not the Company or a Restricted Subsidiary of the Company if (x)
-
the sale or other disposition is in accordance with the terms of this Indenture
(including Sections 410 and 415) and (y) all of the obligations of such
------------ --- -
Subsidiary Guarantor under the Senior Credit Agreement and related
documentation, and under any other agreements relating to any other Indebtedness
of the Company or any of its other Restricted Subsidiaries, terminate upon
consummation of such transaction, (ii) upon legal defeasance of the Company's
--
obligations, or satisfaction and discharge of this Indenture; as and to the
extent provided in Article 11 or Article 12, (iii) subject to clause (b)(ii) of
---------- ---------- ---
Section 1301, upon payment in full of the aggregate principal amount of all
- ------------
Notes then outstanding and all other Guaranteed Obligations then due and owing,
or (iv) upon its merger with or consolidation into another Subsidiary Guarantor
--
in compliance with the last sentence of Section 418.
-----------
A Subsidiary Guarantor will be deemed released and relieved of its
obligations under this Indenture, its Subsidiary Guarantee and the Exchange
Registration Rights Agreement without any further action required on the part of
the Company or such Subsidiary Guarantor upon the designation by the Company of
such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the
terms of this Indenture.
112
Upon any such occurrence specified in this Section 1303, the Trustee
------------
shall execute any documents reasonably required in order to evidence such
release, discharge and termination in respect of such Subsidiary Guarantor's
Subsidiary Guarantee, as the case may be.
Section 1304. Agreement to Subordinate. Each Subsidiary Guarantee is, to
------------------------
the extent and in the manner set forth in Article 15, subordinated and subject
----------
in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness and each Subsidiary Guarantee is made subject to such provisions of
this Indenture.
Section 1305. Waiver of Subrogation. Each Subsidiary Guarantor hereby
---------------------
irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of the Company's obligations under the Notes and this Indenture
or such Subsidiary Guarantor's obligations under its Subsidiary Guarantee and
this Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Notes against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, until this Indenture is discharged and all of the Notes are discharged and
paid in full. If any amount shall be paid to a Subsidiary Guarantor in violation
of the preceding sentence and the Notes shall not have been paid in full, such
amount shall have been deemed to have been paid to such Subsidiary Guarantor for
the benefit of, and held in trust for the benefit of, the Holders of the Notes,
and shall forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Notes, whether matured or unmatured, in accordance
with the terms of this Indenture.
Section 1306. Notation Not Required. Neither the Company nor any
---------------------
Subsidiary Guarantor shall be required to make a notation on the Notes to
reflect any Subsidiary Guarantee or any such release, termination or discharge
thereof.
Section 1307. Successors and Assigns of the Subsidiary Guarantors. All
---------------------------------------------------
covenants and agreements in this Indenture by each Subsidiary Guarantor shall
bind its respective successors and assigns, whether so expressed or not.
Section 1308. Execution and Delivery of Subsidiary Guarantees. The
-----------------------------------------------
Company shall cause each Subsidiary that is required to become a Subsidiary
Guarantor pursuant to Section 413, to promptly execute and deliver to the
-----------
Trustee a supplemental indenture substantially in the form set forth in Exhibit
-------
B to this Indenture, or otherwise in form and substance reasonably satisfactory
- -
to the Trustee, evidencing its Subsidiary Guarantee on substantially the terms
set forth in this Article 13. Concurrently therewith, the Company shall deliver
----------
to the Trustee an Opinion of Counsel from a firm of outside Counsel in form and
substance satisfactory to the Trustee to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such Restricted
Subsidiary and that,
113
subject to the applicable bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and other laws now or
hereafter in effect affecting creditors' rights or remedies generally and the
general principles of equity, whether considered in a proceeding at law or at
equity such supplemental indenture is a valid and binding agreement of such
Restricted Subsidiary, enforceable against such Restricted Subsidiary in
accordance with its terms.
Section 1309. Notices. Notice to any Subsidiary Guarantor shall be
-------
sufficient if addressed to such Subsidiary Guarantor in care of the Company at
the address, and place and in the manner provided in Section 109.
-----------
ARTICLE 14
SUBORDINATION
-------------
Section 1401. Agreement To Subordinate. The Company agrees, and each
------------------------
Noteholder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 14, to the prior payment in full (when due) of all
----------
existing and future Senior Indebtedness and that the subordination is for the
benefit of and enforceable by the holders of Senior Indebtedness of the Company.
The Notes shall in all respects rank pari passu with all other Senior
----------
Subordinated Indebtedness of the Company and only Indebtedness of the Company
that is Senior Indebtedness shall rank senior to the Notes in accordance with
the provisions set forth herein. All provisions of this Article 14 shall be
----------
subject to Section 1411.
------------
Section 1402. Liquidation, Dissolution, Bankruptcy. Upon any payment or
------------------------------------
distribution of the assets of the Company to creditors upon a total or partial
liquidation or a total or partial dissolution of the Company or in a
reorganization, bankruptcy, insolvency, receivership or similar proceeding
relating to the Company or its properties or an assignment for the benefit of
creditors or marshalling of the Company's assets or liabilities:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents of all Senior Indebtedness
(including interest accruing after, or which would accrue but for, the
commencement of any proceeding at the rate specified in the applicable
Senior Indebtedness, whether or not a claim for such interest would be
allowed) before Noteholders shall be entitled to receive any payment or
distribution, if any, of the assets or securities of the Company; and
(2) until the Senior Indebtedness is paid in full in cash or Cash
Equivalents, any payment or distribution to which Noteholders would be
entitled
114
but for this Article 14 shall be made to holders of Senior Indebtedness,
----------
as their respective interests may appear.
Section 1403. Default on Designated Senior Indebtedness. The Company may
-----------------------------------------
not pay principal of, or premium (if any) or interest on, the Notes or make any
deposit pursuant to the provisions of Article 12 and may not otherwise purchase,
----------
redeem or otherwise retire any Notes (collectively, "pay the Notes") if (i) any
------------- -
Designated Senior Indebtedness is not paid when due in cash or Cash Equivalents
or (ii) any other default on Designated Senior Indebtedness occurs and the
--
maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms (either such event, a "Payment Default") unless, in either case,
---------------
(x) the Payment Default has been cured or waived and any such acceleration has
-
been rescinded in writing or (y) such Designated Senior Indebtedness has been
-
paid in full in cash or Cash Equivalents; provided that the Company may pay the
--------
Notes without regard to the foregoing if the Company and the Trustee receive
written notice approving such payment from the Representative for the Designated
Senior Indebtedness with respect to which the Payment Default has occurred and
is continuing.
In addition, during the continuance of any default (other than a
Payment Default) with respect to any Designated Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace period (a "Non-payment Default"), the Company
-------------------
may not pay the Notes for the period specified as follows (a "Payment Blockage
----------------
Period"). The Payment Blockage Period shall commence upon the receipt by the
- ------
Trustee (with a copy to the Company) of written notice (a "Blockage Notice") of
---------------
such Non-payment Default from the Representative for such Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period and
shall end on the earliest to occur of the following events: (i) 179 days shall
-
have elapsed since such receipt of such Blockage Notice, (ii) the Non-payment
--
Default giving rise to such Blockage Notice is no longer continuing (and no
other Payment Default or Non-payment Default is then continuing), (iii) such
---
Designated Senior Indebtedness shall have been discharged or repaid in full in
cash or Cash Equivalents or (iv) such Payment Blockage Period shall have been
--
terminated by written notice to the Trustee and the Company from the Person or
Persons who gave such Blockage Notice. The Company shall promptly resume
payments on the Notes, including any missed payments, after such Payment
Blockage Period ends, unless the holders of such Designated Senior Indebtedness
or the Representative of such holders have accelerated the maturity of such
Designated Senior Indebtedness, or any Payment Default otherwise exists. Not
more than one Blockage Notice may be given in any 360 consecutive day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period.
Section 1404. Acceleration of Payment of Notes. If payment of the Notes
--------------------------------
is accelerated because of an Event of Default, the Company shall promptly notify
the
115
holders of the Designated Senior Indebtedness or the Representative of such
holders of the acceleration.
Section 1405. When a Distribution Must Be Paid Over. If a distribution
-------------------------------------
is made to Noteholders that because of provisions of this Article 14 should not
----------
have been made to them, the Noteholders who received the distribution are
required to hold it in trust for the holders of Senior Indebtedness and pay it
over to them as their interests may appear.
Section 1406. Subrogation. After all Senior Indebtedness of the Company
-----------
is paid in full and until the Notes are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to such Senior Indebtedness. For purposes of such
subrogation, a distribution made under this Article 14 to holders of Senior
----------
Indebtedness that otherwise would have been made to Holders is not, as between
the Company, its creditors other than the holders of such Senior Indebtedness
and Holders, a payment by the Company on such Senior Indebtedness, it being
understood that the provisions of this Article 14 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 of the Company, on the other hand.
Section 1407. Relative Rights. This Article 14 defines the relative
--------------- ----------
rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(i) impair, as between the Company and Holders, the obligation of
the Company which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms; or
(ii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of Senior
Indebtedness to receive distributions otherwise payable to Holders.
Section 1408. Subordination May Not Be Impaired by Issuers. No right of
--------------------------------------------
any holder of Senior Indebtedness of the Company to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
Section 1409. Rights of Trustee and Paying Agent. The Company shall give
----------------------------------
prompt written notice to the Trustee of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee in respect of the Notes.
Failure to give such notice shall not affect the subordination of the Notes to
Senior Indebtedness of the Company. Notwithstanding Section 1403, the Trustee or
------------
Paying Agent may continue to make payments on the Notes and shall not be charged
with knowledge of the existence of facts that would prohibit the making of any
such payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article 14.
----------
116
The Company, the Registrar or co-registrar, the Paying Agent, or a
Representative or holder of Senior Indebtedness may give the notice; provided,
--------
however, that, if an issue of Senior Indebtedness has a Representative, only the
- -------
Representative may give the notice. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Indebtedness (or a Representative of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 14 with respect to any Senior Indebtedness that may at any time be held
- ----------
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
---------
holder. Nothing in this Article 14 shall apply to claims of, or payments to, the
----------
Trustee under or pursuant to Section 707.
-----------
Section 1410. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
Section 1411. Article 14 Not To Prevent Events of Default or Limit Right
----------------------------------------------------------
To Accelerate. The failure to make a payment pursuant to the Notes by reason of
- -------------
any provision in this Article 14 shall not be construed as preventing the
----------
occurrence of a Default. Subject to Section 1404, nothing in this Article 14
------------ ----------
shall have any effect on the right of the Holders or the Trustee to accelerate
the maturity of the Notes.
Section 1412. Trust Moneys and Permitted Junior Securities Not
------------------------------------------------
Subordinated. Notwithstanding anything contained herein to the contrary,
- ------------
payments (i) from money or the proceeds of U.S. Government Obligations held in
-
trust under Article 12 by the Trustee or (ii) in the form of Permitted Junior
---------- --
Securities, for the payment of principal of and premium, if any, and interest on
the Notes shall not be subordinated to the prior payment of any Senior
Indebtedness of the Company or subject to the restrictions set forth in this
Article 14, and none of the Holders shall be obligated to pay over any such
- ----------
amount or such Permitted Junior Securities, as the case may be, to the Company
or any holder of Senior Indebtedness of the Company or any other creditor of the
Company.
Section 1413. Trustee Entitled To Rely. Upon any payment or distribution
------------------------
pursuant to this Article 14, the Trustee and the Holders shall be entitled to
----------
rely (i) upon any order or decree of a court of competent jurisdiction in which
-
any proceedings of the nature referred to in Section 1402 are pending, (ii) upon
------------ --
a certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Holders or (iii) upon the
---
Representatives for the holders of Senior Indebtedness for the purpose of
ascertaining the Persons entitled to participate in such payment or
117
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
-------
14. In the event that the Trustee determines, in good faith, that evidence is
- --
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 14, 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 other facts pertinent to the rights of such
Person under this Article 14, 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. The provisions of Sections
--------
701 and 703 shall be applicable to all actions or omissions of actions by the
- --- ---
Trustee pursuant to this Article 14.
----------
Section 1414. Trustee To Effectuate Subordination. Each Holder by
-----------------------------------
accepting a Note authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination between the Holders and the holders of Senior Indebtedness of
the Company as provided in this Article 14 and appoints the Trustee as
----------
attorney-in-fact for any and all such purposes.
Section 1415. 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 of the Company and shall not be liable to any such holders
if it shall mistakenly pay over or distribute to Holders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article 14 or otherwise. With respect to the
----------
holders of Senior Indebtedness of the Company, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article 14 or Article 15 and no implied covenants or obligations
---------- ----------
with respect to holders of Senior Indebtedness of the Company shall be read into
this Indenture against the Trustee.
Section 1416. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Holder by accepting a Note acknowledges and
- ------------------------
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
the Company, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall
be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
Section 1417. Trustee's Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article 14 shall apply to amounts due to the Trustee pursuant to other Sections
- ----------
of this Indenture.
118
ARTICLE 15
SUBORDINATION OF SUBSIDIARY GUARANTEES
--------------------------------------
Section 1501. Agreement To Subordinate. Each Subsidiary Guarantor
------------------------
agrees, and each Noteholder by accepting a Note agrees, that all payments
pursuant to such Subsidiary Guarantor's Subsidiary Guarantee made by or on
behalf of such Subsidiary Guarantor are subordinated in right of payment, to the
extent and in the manner provided in this Article 15, to the prior payment in
----------
full (when due) of all existing and future Guarantor Senior Indebtedness of such
Subsidiary Guarantor and that the subordination is for the benefit of and
enforceable by the holders of Guarantor Senior Indebtedness of such Subsidiary
Guarantor. Such Subsidiary Guarantee shall in all respects rank pari passu with
----------
all other Guarantor Senior Subordinated Indebtedness of such Subsidiary
Guarantor and only Indebtedness of such Subsidiary Guarantor that is Guarantor
Senior Indebtedness shall rank senior to such Subsidiary Guarantee in accordance
with the provisions set forth herein. All provisions of this Article 15 shall be
----------
subject to Section 1513.
------------
Section 1502. Liquidation, Dissolution, Bankruptcy. Upon any payment or
----------- ----------- ----------
distribution of the assets of any Subsidiary Guarantor upon a total or partial
liquidation or dissolution of such Subsidiary Guarantor or in a reorganization,
bankruptcy, insolvency, receivership or similar proceeding relating to such
Subsidiary Guarantor or its properties or an assignment for the benefit of
creditors or marshalling of such Subsidiary Guarantor's assets of liabilities,
(i) holders of Guarantor Senior Indebtedness of such Subsidiary
Guarantor will be entitled to receive payment in full in cash or Cash
Equivalents of such Guarantor Senior Indebtedness (including interest
accruing after, or which would accrue but for, the commencement of any
proceeding at the rate specified in the applicable Senior Indebtedness,
whether or not a claim for such interest would be allowed) before the
Noteholders are entitled to receive any payment or distributions if any,
of the assets or securities of such Subsidiary Guarantor; and
(ii) until the Guarantor Senior Indebtedness of such Subsidiary
Guarantor is paid in full in cash or Cash Equivalents, any payment or
distribution from such Subsidiary Guarantor to which Noteholders would
be entitled but for this Article 15 will be made to holders of such
----------
Guarantor Senior Indebtedness as their interests may appear.
Section 1503. Default on Designated Guarantor Senior Indebtedness. No
---------------------------------------------------
Subsidiary Guarantor may make any payment pursuant to its Subsidiary Guarantee
and may not otherwise purchase, redeem or otherwise retire or defease any Notes
(collectively, "pay its Subsidiary Guarantee") if (i) any Designated Guarantor
----------------------------
Senior Indebtedness of such Subsidiary Guarantor is not paid when due in cash or
Cash
119
Equivalents or (ii) any other default on Designated Guarantor Senior
--
Indebtedness of such Subsidiary Guarantor occurs and the maturity of such
Designated Guarantor Senior Indebtedness is accelerated in accordance with its
terms (either such event, a "Subsidiary Guarantor Payment Default") unless, in
------------------------------------
either case, (x) the Subsidiary Guarantor Payment Default has been cured or
-
waived and any such acceleration has been rescinded in writing or (y) such
-
Designated Guarantor Senior Indebtedness has been paid in full in cash or Cash
Equivalents; provided, that, a Subsidiary Guarantor may pay its Subsidiary
-------- ----
Guarantee without regard to the foregoing if such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representative
for the Designated Guarantor Senior Indebtedness with respect to which the
Subsidiary Guarantor Payment Default has occurred and is continuing.
In addition, during the continuance of any default (other than a
Subsidiary Guarantor Payment Default) with respect to any Designated Guarantor
Senior Indebtedness of a Subsidiary Guarantor pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace period (a "Subsidiary Guarantor Non-payment Default"), a
----------------------------------------
Subsidiary Guarantor may not pay its Subsidiary Guarantee for the period
specified as follows (a "Subsidiary Guarantor Payment Blockage Period"). The
--------------------------------------------
Subsidiary Guarantor Payment Blockage Period shall commence upon the receipt by
the Trustee (with a copy to such Subsidiary Guarantor) of written notice (a
"Subsidiary Guarantor Blockage Notice") of such Designated Guarantor Non-payment
------------------------------------
Default from the Representative for Designated Guarantor Senior Indebtedness
specifying an election to effect a Subsidiary Guarantor Payment Blockage Period
and shall end on the earliest to occur of the following events: (i) 179 days
-
shall have elapsed since such receipt of such Subsidiary Guarantor Blockage
Notice, (ii) the Subsidiary Guarantor Non-payment Default giving rise to such
--
Blockage Notice is no longer continuing (and no other Subsidiary Guarantor
Payment Default or Subsidiary Guarantor Non-payment Default is then continuing),
(iii) such Designated Guarantor Senior Indebtedness shall have been discharged
---
or repaid in full in cash or Cash Equivalents or (iv) such Subsidiary Guarantor
--
Payment Blockage Period shall have been terminated by written notice to the
Trustee and such Subsidiary Guarantor from the Person or Persons who gave such
Subsidiary Guarantor Blockage Notice. A Subsidiary Guarantor shall promptly pay
its Subsidiary Guarantee, after such Subsidiary Guarantor Payment Blockage
Period ends, unless the holders of such Designated Guarantor Senior Indebtedness
or the Representative of such holders have accelerated the maturity of such
Designated Guarantor Senior Indebtedness, or any Subsidiary Guarantor Payment
Default otherwise exists. Not more than one Subsidiary Guarantor Blockage Notice
to a Subsidiary Guarantor in the aggregate may be given in any 360 consecutive
day period, irrespective of the number of defaults with respect to Designated
Guarantor Senior Indebtedness of such Subsidiary Guarantor during such period.
Section 1504. Acceleration of Payment of Notes. If payment of the Notes
--------------------------------
is accelerated because of an Event of Default, each Subsidiary Guarantor shall
promptly
120
notify the holders of the Designated Guarantor Senior Indebtedness of such
Subsidiary Guarantor (or the Representative of such holders) of the
acceleration. If a demand for payment is made on such Subsidiary Guarantor
pursuant to Article 13, each Subsidiary Guarantor shall promptly notify the
----------
holders of the Designated Guarantor Senior Indebtedness of such Subsidiary
Guarantor (or their Representatives) of such demand.
Section 1505. When a Distribution Must Be Paid Over. If a distribution
-------------------------------------
from a Subsidiary Guarantor is made to Holders that because of the provisions of
this Article 15 should not have been made to them, the Holders who receive the
----------
distribution shall hold it in trust for holders of Guarantor Senior Indebtedness
of such Subsidiary Guarantor and pay it over to them as their interests may
appear.
Section 1506. Subrogation. After all Guarantor Senior Indebtedness of a
-----------
Subsidiary Guarantor is paid in full and until the Notes are paid in full,
Holders shall be subrogated to the rights of holders of Guarantor Senior
Indebtedness of such Subsidiary Guarantor to receive distributions applicable to
such Guarantor Senior Indebtedness. For purposes of such subrogation, a
distribution made under this Article 15 to holders of Guarantor Senior
----------
Indebtedness of a Subsidiary Guarantor that otherwise would have been made to
Holders is not, as between such Subsidiary Guarantor, its creditors other than
the holders of such Guarantor Senior Indebtedness, and Holders, a payment by
such Subsidiary Guarantor on such Guarantor Senior Indebtedness, it being
understood that the provisions of this Article 15 are and are intended solely
----------
for the purpose of defining the relative rights of the Holders, on the one hand,
and the holders of Guarantor Senior Indebtedness of such Subsidiary Guarantors,
on the other hand.
Section 1507. Relative Rights. This Article 15 defines the relative
--------------- ----------
rights of Holders and holders of Guarantor Senior Indebtedness of each
Subsidiary Guarantor. Nothing in this Indenture shall:
(i) impair, as between a Subsidiary Guarantor and Holders, the
obligation of such Subsidiary Guarantor to pay the Guaranteed
Obligations in accordance with the terms of its respective Subsidiary
Guarantee; or
(ii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of Guarantor
Senior Indebtedness of a Subsidiary Guarantor to receive distributions
otherwise payable to Holders.
Section 1508. Subordination May Not Be Impaired by Subsidiary
-----------------------------------------------
Guarantors. No right of any holder of Guarantor Senior Indebtedness of a
- ----------
Subsidiary Guarantor to enforce the subordination of the payments pursuant to
such Subsidiary Guarantor's Subsidiary Guarantee shall be impaired by any act or
failure to act by such Subsidiary Guarantor or by its failure to comply with
this Indenture.
121
Section 1509. Rights of Trustee and Paying Agent. A Subsidiary Guarantor
----------------------------------
shall give prompt written notice to the Trustee of any fact known to it that
would prohibit the making of any payment to or by the Trustee in respect of its
Subsidiary Guarantee. Failure to give such notice shall not affect the
subordination of the payments pursuant to its Subsidiary Guarantee to Guarantor
Senior Indebtedness of such Subsidiary Guarantor. Notwithstanding Section 1503,
------------
the Trustee or Paying Agent may continue to make payments pursuant to such
Subsidiary Guarantee and shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, a Responsible Officer of
the Trustee receives notice satisfactory to it that payments may not be made
under this Article 15. The Company or any Subsidiary Guarantor, the Registrar or
----------
co-registrar, the Paying Agent, or a Representative or holder of Guarantor
Senior Indebtedness or any Subsidiary Guarantor may give the notice; provided
--------
that, if an issue of Guarantor Senior Indebtedness of a Subsidiary Guarantor has
a Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Guarantor Senior
Indebtedness of a Subsidiary Guarantor (or a Representative of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Indebtedness of a Subsidiary Guarantor with the same rights it would have
if it were not Trustee. The Registrar and co-registrar and the Paying Agent may
do the same with like rights. The Trustee shall be entitled to all the rights
set forth in this Article 15 with respect to any Guarantor Senior Indebtedness
----------
of a Subsidiary Guarantor which may at any time be held by it, to the same
extent as any other holder of Guarantor Senior Indebtedness of such Subsidiary
Guarantor; and nothing in Article 7 shall deprive the Trustee of any of its
---------
rights as such holder. Nothing in this Article 15 shall apply to claims of, or
----------
payments to, the Trustee under or pursuant to Section 707.
-----------
Section 1510. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Guarantor Senior
Indebtedness of a Note Subsidiary Guarantor, the distribution may be made and
the notice given to their Representative (if any).
Section 1511. Article 15 Not To Prevent Events of Default or Limit Right
----------------------------------------------------------
To Accelerate. The failure to make a payment pursuant to the Parent Guarantee or
- -------------
a Subsidiary Guarantee by reason of any provision in this Article 15 shall not
----------
be construed as preventing the occurrence of a Default. Nothing in this Article
-------
15 shall have any effect on the right of the Holders or the Trustee to
- --
accelerate the maturity of the Notes or make a demand for payment on a
Subsidiary Guarantor pursuant to Article 13 or the relevant Subsidiary
----------
Guarantee.
122
Section 1512. Trust Moneys Not Subordinated. Notwithstanding anything
-----------------------------
contained herein to the contrary, payments (i) from money or the proceeds of
-
U.S. Government Obligations held in trust under Article 12 by the Trustee or
----------
(ii) in the form of Permitted Junior Securities, for the payment of principal,
--
premium, if any, or interest on the Notes shall not be subordinated to the prior
payment of any Guarantor Senior Indebtedness of any Subsidiary Guarantor or
subject to the restrictions set forth in this Article 15, and none of the
----------
Holders shall be obligated to pay over any such amount to any Subsidiary
Guarantor or any holder of Guarantor Senior Indebtedness of any Subsidiary
Guarantor or any other creditor of any Subsidiary Guarantor.
Section 1513. Trustee Entitled To Rely. Upon any payment or distribution
------------------------
pursuant to this Article 15, the Trustee and the Holders shall be entitled to
----------
rely (i) upon any order or decree of a court of competent jurisdiction in which
-
any proceedings of the nature referred to in Section 1502 are pending, (ii) upon
------------ --
a certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Holders or (iii) upon the
---
Representatives for the holders of Guarantor Senior Indebtedness or any
Subsidiary Guarantor for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Guarantor Senior
Indebtedness and other Indebtedness of such Subsidiary Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 15. In the event that
----------
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of such Guarantor Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 15, the
----------
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 15, 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. The
provisions of Sections 701 and 703 shall be applicable to all actions or
------------ ---
omissions of actions by the Trustee pursuant to this Article 15.
----------
Section 1514. Trustee To Effectuate Subordination. Each Holder by
-----------------------------------
accepting a Note authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination between the Holders and the holders of Guarantor Senior
Indebtedness of any Subsidiary Guarantor as provided in this Article 15 and
----------
appoints the Trustee as attorney-in-fact for any and all such purposes.
Section 1515. Trustee Not Fiduciary for Holders of Guarantor Senior
-----------------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
- ------------
holders of Guarantor Senior Indebtedness of any Subsidiary Guarantor and shall
not be liable to any such holders if it shall mistakenly pay over or distribute
to Holders or the Company or any other Person, money or assets to which any
holders of Guarantor Senior
123
Indebtedness shall be entitled by virtue of this Article 15 or otherwise. With
----------
respect to the holders of Guarantor Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article 15 and no implied covenants or
----------
obligations with respect to holders of Guarantor Senior Indebtedness of any
Subsidiary Guarantor shall be read into this Indenture against the Trustee.
Section 1516. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Holder by accepting a Note acknowledges and
- ------------------------
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Guarantor Senior
Indebtedness of any Subsidiary Guarantor, whether such Guarantor Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Guarantor Senior
Indebtedness and such holder of such Guarantor Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Guarantor Senior
Indebtedness.
Section 1517. Trustee's Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article 15 shall apply to amounts due to the Trustee pursuant to other Sections
of this Indenture.
124
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
SELECT MEDICAL CORPORATION
By Michael E. Tarvin
------------------------------
Name: Michael E. Tarvin
Title: Senior Vice President
SELECTMARK, INC.,
By Andrew Panaccione
------------------------------
Name: Andrew Panaccione
Title: Vice President
SELECT HOSPITAL INVESTORS, INC.,
By Andrew Panaccione
------------------------------
Name: Andrew Panaccione
Title: Vice President
SLMC FINANCE CORPORATION,
By Andrew Panaccione
------------------------------
Name: Andrew Panaccione
Title: CFO
EACH OF THE GUARANTORS LISTED ON
SCHEDULE I HERETO OTHER THAN SELECTMARK,
INC., SELECT HOSPTAL INVESTORS, INC. AND
SLMC FINANCE CORPORATION
By Michael E. Tarvin
------------------------------
Name: Michael E. Tarvin
Title: Vice President
125
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: Ward A. Spooner
-------------------------------
Name: Ward A. Spooner
Title: Vice President
126
SCHEDULE I
Abel Center for Rehabilitation Therapies, Inc.
Abel Healthcare Network, Inc.
Affiliated Physical Therapists, Ltd.
Allegany Hearing and Speech, Inc.
American Transitional Hospitals, Inc.
Athens Sports Medicine Clinic, Inc.
Ather Sports Injury Clinic, Inc.
Atlantic Health Group, Inc.
Atlantic Rehabilitation Services, Inc.
Avalon Rehabilitation & Healthcare, L.L.C.
Boca Rehab Agency, Inc.
Buendel Physical Therapy, Inc.
C.E.R. - West, Inc.
C.O.A.S.T. Institute Physical Therapy, Inc.
CCISUB, Inc.
CMC Center Corporation
Cenla Physical Therapy & Rehabilitation Agency, Inc.
Center for Evaluation & Rehabilitation, Inc.
Center for Physical Therapy & Sports Rehabilitation, Inc.
CenterTherapy, Inc.
Champion Physical Therapy, Inc.
Connecticut NovaCare Ventures, Inc.
Coplin Physical Therapy Associates, Inc.
Crowley Physical Therapy Clinic, Inc.
Douglas Avery & Associates, Ltd.
Douglas C. Claussen, R.P.T., Physical Therapy, Inc.
Elk County Physical Therapy, Inc.
127
Fine, Bryant & Wah, Inc.
Francis Naselli, Jr. & Stewart Rich Physical Therapists, Inc.
Gallery Physical Therapy Center, Inc.
Georgia NovaCare Ventures, Inc.
Georgia Physical Therapy of West Georgia, Inc.
Georgia Physical Therapy, Inc.
GP Therapy, L.L.C.
Greater Sacramento Physical Therapy Associates, Inc.
Grove City Physical Therapy and Sports Medicine, Inc.
Gulf Breeze Physical Therapy, Inc.
Gulf Coast Hand Specialists, Inc.
Hand Therapy Associates, Inc.
Hand Therapy and Rehabilitation Associates, Inc.
Hangtown Physical Therapy, Inc.
Hawley Physical Therapy, Inc.
Human Performance and Fitness, Inc.
Indianapolis Physical Therapy and Sports Medicine, Inc.
Intensiva Healthcare Corporation
Intensiva Hospital of Greater St. Louis, Inc.
Joyner Sports Science Institute, Inc.
Joyner Sportmedicine Institute, Inc.
Kentucky Rehabilitation Services, Inc.
Kesinger Physical Therapy, Inc.
Lynn M. Carlson, Inc.
Mark Butler Physical Therapy Center, Inc.
Metro Rehabilitation Services, Inc.
Michigan Therapy Centre, Inc.
MidAtlantic Health Group, Inc.
Monmouth Rehabilitation, Inc.
128
New England Health Group, Inc.
New Mexico Physical Therapists, Inc.
Northside Physical Therapy, Inc.
NovaCare Health Group, L.L.C.
NovaCare Occupational Health Services, Inc.
NovaCare Outpatient Rehabilitation, Inc.
NovaCare Outpatient Rehabilitation East, Inc.
NovaCare Outpatient Rehabilitation West, Inc.
NovaCare Rehabilitation, Inc.
NW Rehabilitation Associates, L.P.
Ortho Rehab Associates, Inc.
Orthopedic and Sports Physical Therapy of Cupertino, Inc.
P.T. Services Company
P.T. Services, Inc.
P.T. Services Rehabilitation, Inc.
Peter Trailov R.P.T. Physical Therapy Clinic, Orthopaedic Rehabilitation &
Sports Medicine, Ltd.
Peters, Starkey & Todrank Physical Therapy Corporation
Physical Focus, Inc.
Physical Rehabilitation Partners, Inc.
Physical Therapy Enterprises, Inc.
Physical Therapy Institute, Inc.
Physical Therapy Services of the Jersey Cape, Inc.
Physio - Associates, Inc.
Pro Active Therapy, Inc.
Pro Active Therapy of Ahoskie, Inc.
Pro Active Therapy of Gaffney, Inc.
Pro Active Therapy of Greenville, Inc.
Pro Active Therapy of North Carolina, Inc.
129
Pro Active Therapy of South Carolina, Inc.
Pro Active Therapy of Virginia, Inc.
Pro Active Therapy of Rocky Mount, Inc.
Professional Therapeutic Services, Inc.
Quad City Management, Inc.
RCI (Colorado), Inc.
RCI (Exertec), Inc.
RCI (Michigan), Inc.
RCI (S.P.O.R.T.), Inc.
RCI (WRS), Inc.
RCI Nevada, Inc.
Rebound Oklahoma, Inc.
Redwood Pacific Therapies, Inc.
Rehab Advantage, Inc.
Rehab Managed Care of Arizona, Inc.
Rehab Provider Network - California, Inc.
Rehab Provider Network - Delaware, Inc.
Rehab Provider Network - Georgia, Inc.
Rehab Provider Network - Indiana, Inc.
Rehab Provider Network - Maryland, Inc.
Rehab Provider Network - Michigan, Inc.
Rehab Provider Network - New Jersey, Inc.
Rehab Provider Network - Ohio, Inc.
Rehab Provider Network - Oklahoma, Inc.
Rehab Provider Network - Pennsylvania, Inc.
Rehab Provider Network - Virginia, Inc.
Rehab Provider Network - Washington, D.C., Inc.
Rehab Provider Network of Colorado, Inc.
Rehab Provider Network of Florida, Inc.
130
Rehab Provider Network of Nevada, Inc.
Rehab Provider Network of New Mexico, Inc.
Rehab Provider Network of North Carolina, Inc.
Rehab Provider Network of Texas, Inc.
Rehab Provider Network of Wisconsin, Inc.
Rehab World, Inc.
Rehab/Work Hardening Management Associates, Ltd.
RehabClinics, Inc.
RehabClinics (COAST), Inc.
RehabClinics (GALAXY), Inc.
RehabClinics (New Jersey), Inc.
RehabClinics (PTA), Inc.
RehabClinics (SPT), Inc.
RehabClinics Abilene, Inc.
RehabClinics Dallas, Inc.
RehabClinics Pennsylvania, Inc.
Rehabilitation Network, Inc.
Robert M. Bacci, R.P.T. Physical Therapy, Inc.
S.T.A.R.T., Inc.
Select Air Corporation
Select Employment Services, Inc.
Select Hospital Investors, Inc.
SelectMark, Inc.
Select Medical of Kentucky, Inc.
Select Medical of Maryland, Inc.
Select Medical of New Jersey, Inc.
Select Medical of New York, Inc.
Select Medical of Ohio, Inc.
Select Medical of Pennsylvania, Inc.
131
Select Software Ventures, L.L.C.
Select Specialty Hospital - Akron, Inc.
Select Specialty Hospital - Akron II, Inc.
Select Specialty Hospital - Ann Arbor, Inc.
Select Specialty Hospital - Battle Creek, Inc.
Select Specialty Hospital - Beech Grove, Inc.
Select Specialty Hospital - Camp Hill, Inc.
Select Specialty Hospital - Camp Hill, L.P.
Select Specialty Hospital - Central Detroit, Inc.
Select Specialty Hospital - Charleston, Inc.
Select Specialty Hospital - Cincinnati, Inc.
Select Specialty Hospital - Columbus, Inc.
Select Specialty Hospital - Columbus/University, Inc.
Select Specialty Hospital - Dallas, Inc.
Select Specialty Hospital - Denver, Inc.
Select Specialty Hospital - Durham, Inc.
Select Specialty Hospital - Erie, Inc.
Select Specialty Hospital - Evansville, Inc.
Select Specialty Hospital - Flint, Inc.
Select Specialty Hospital - Fort Smith, Inc.
Select Specialty Hospital - Fort Wayne, Inc.
Select Specialty Hospital - Greensburg, Inc.
Select Specialty Hospital - Houston, Inc.
Select Specialty Hospital - Indianapolis, Inc.
Select Specialty Hospital - Jackson, Inc.
Select Specialty Hospital - Johnstown, Inc.
Select Specialty Hospital - Kansas City, Inc.
Select Specialty Hospital - Knoxville, Inc.
Select Specialty Hospital - Little Rock, Inc.
132
Select Specialty Hospital - Louisville, Inc.
Select Specialty Hospital - Macomb County, Inc.
Select Specialty Hospital - Memphis, Inc.
Select Specialty Hospital - Mesa, Inc.
Select Specialty Hospital - Miami, Inc.
Select Specialty Hospital - Milwaukee, Inc.
Select Specialty Hospital - Morgantown, Inc.
Select Specialty Hospital - Nashville, Inc.
Select Specialty Hospital - New Orleans, Inc.
Select Specialty Hospital - North Knoxville, Inc.
Select Specialty Hospital - Northwest Detroit, Inc.
Select Specialty Hospital - Northwest Indiana, Inc.
Select Specialty Hospital - Oklahoma City, Inc.
Select Specialty Hospital - Oklahoma City/East Campus, Inc.
Select Specialty Hospital - Omaha, Inc.
Select Specialty Hospital - Philadelphia/AEMC, Inc.
Select Specialty Hospital - Phoenix, Inc.
Select Specialty Hospital - Pittsburgh, Inc.
Select Specialty Hospital - Pontiac, Inc.
Select Specialty Hospital - Reno, Inc.
Select Specialty Hospital - San Antonio, Inc.
Select Specialty Hospital - Sioux Falls, Inc.
Select Specialty Hospital - Topeka, Inc.
Select Specialty Hospital - TriCities, Inc.
Select Specialty Hospital - Tulsa, Inc.
Select Specialty Hospital - West Columbus, Inc.
Select Specialty Hospital - Western Michigan, Inc.
Select Specialty Hospital - Wichita, Inc.
Select Specialty Hospital - Wilmington, Inc.
133
Select Specialty Hospital - Wyandotte, Inc.
Select Specialty Hospital - Youngstown, Inc.
Select Specialty Hospitals, Inc.
Select Synergos, Inc.
Select Unit Management, Inc.
SLMC Finance Corporation
SMC of Florida, Inc.
South Jersey Physical Therapy Associates, Inc.
South Jersey Rehabilitation and Sports Medicine Center, Inc.
Southpointe Fitness Center, Inc.
Southwest Emergency Associates, Inc.
Southwest Medical Supply Company, Inc.
Southwest Physical Therapy, Inc.
Southwest Therapists, Inc.
Sporthopedics Sports and Physical Therapy Centers, Inc.
Sports & Orthopedic Rehabilitation Services, Inc.
Sports Therapy and Arthritis Rehabilitation, Inc.
Star Physical Therapy, Inc.
Stephenson-Holtz, Inc.
The Center for Physical Therapy and Rehabilitation, Inc.
The Orthopedic Sports and Industrial Rehabilitation Network, Inc.
TJ Partnership I
Treister, Inc.
Union Square Center for Rehabilitation & Sports Medicine, Inc.
Valley Group Physical Therapists, Inc.
Vanguard Rehabilitation, Inc.
Wayzata Physical Therapy Center, Inc.
West Penn Rehabilitation Services, Inc.
West Side Physical Therapy, Inc.
134
West Suburban Health Partners, Inc.
Yuma Rehabilitation Center, Inc.
135
Exhibit A
FORM OF NOTE/1/
SELECT MEDICAL CORPORATION,
9 1/2% Senior Subordinated Notes Due 2009
No. CUSIP No./2,3/
$_____________
[Select Medical Corporation, a Delaware corporation (and its successors and
assigns), and (the "Company," which term shall have the meaning ascribed thereto
in the Indenture hereinafter referred to) promises] to pay to , or
registered assigns, the principal sum of $([___________] United States Dollars)
on June 15, 2009 [(or such lesser or greater amounts as shall be outstanding
hereunder from time to time in accordance with Sections 312 and 313 of the
Indenture referred to on the reverse here)]/4/.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
SELECT MEDICAL CORPORATION
By:________________________________
Name:
Title:
_________________________
/1/ Insert any applicable legends from Article 2.
/2/ Include appropriate CUSIP Number for Initial Note that is not registered
under the Securities Act.
/3/ Include appropriate CUSIP Number for Exchange Note or Initial Note that is
registered under the Securities Act.
/4/ Include only if the Note is issued in global form.
136
[SEAL]
Attest:
____________________
137
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:__________________________
Name:
Title:
Dated: ________________________
138
[FORM OF REVERSE SIDE OF NOTE]
9 1/2% Senior Subordinated Note Due 2009
1. Interest
- -------------
The Company promises to pay interest semi-annually on June 15 and December
15 in each year, commencing December 15, 2001 at the rate of 9 1/2% per annum
[(subject to adjustment as provided below)]/5/ [, except that interest accrued
on this Note for periods prior to the date on which the Initial Note was
surrendered in exchange for this Note will accrue at the rate or rates borne by
such Initial Note from time to time during such periods]/6/, until the Principal
Amount is paid or made available for payment. [Interest on this Note will accrue
from the most recent date to which interest on this Note or any of its
Predecessor Notes has been paid or duly provided for or, if no interest has been
paid, from the Issue Date.]/7/ [Interest on this Note will accrue from the most
recent date to which interest on this Note or any of its Predecessor Notes has
been paid or duly provided for or, if no such interest has been paid, from [June
11, 2001]/8/.]/9/ Interest on the Notes shall be computed on the basis of a 360-
day year of twelve 30-day months. 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 Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest, which shall be the June 1 or December 1 (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 Note (or one or more Predecessor Notes) 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 Notes not more than 15 days nor 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 Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
_________________________
/5/ Include only for Initial Note when additional interest provisions, set
forth in the next paragraph, are included.
/6/ Include only for Exchange Note.
/7/ Include only for Original Notes.
/8/ Insert first date of issuance of Additional Note and its Predecessor Notes.
/9/ Include only for Additional Notes (and Exchange Notes issued in the
exchange therefor).
139
[The Holder of this Note is entitled to the benefits of the Exchange and
Registration Rights Agreement (the "Exchange and Registration Rights
Agreement"), dated June 11, 2001, among Select Medical Corporation, each of the
Guarantors listed on Schedule I thereto, J.P. Morgan Securities Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston
Corporation, CIBC World Markets Corp. and First Union Securities, Inc. Pursuant
and subject to the Exchange and Registration Rights Agreement, until [(i) the
-
date on which this Note has been exchanged for a freely transferable Exchange
Security (as defined in the Exchange and Registration Rights Agreement) in the
Registered Exchange Offer (as defined in the Exchange and Registration Rights
Agreement), (ii) the date on which this Note has been effectively registered
--
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement (as defined in the Exchange and Registration Rights
Agreement), or (iii) the date on which such Note is distributed to the public
---
pursuant to Rule 144 of the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act: From and including the date on which a
Registration Default (as defined below) shall occur to but excluding the date on
which such Registration Default has been cured, additional interest will accrue
on the Note in an amount equal to $0.192 per week per $1,000 principal amount of
the Note held by such Holder. Any such additional interest shall be paid in the
same manner and on the same dates as interest payments in respect of this Note.
Following the cure of all Registration Defaults, the accrual of such additional
interest will cease. For purposes of the foregoing, each of the following
events, as more particularly defined in the Exchange Registration Rights
Agreement, is a "Registration Default": (i) the Exchange Offer Registration
-
Statement is not filed with the SEC on or prior to 75 days after the Issue Date,
(ii) the Exchange Offer Registration Statement or the Shelf Registration
--
Statement (as defined in the Exchange and Registration Rights Agreement), as the
case may be, is not declared effective within 150 days after the Issue Date (or
in the case of a Shelf Registration Statement required to be filed in response
to a change in law or the applicable interpretation of the SEC's staff, if
later, within 60 days after publication of the change in law or interpretation),
(iii) the Registered Exchange Offer is not consummated on or prior to 180 days
---
after the Issue Date, or (iv) the Shelf Registration Statement is filed and
--
declared effective within 150 days after the Issue Date (or in the case of a
Shelf Registration Statement required to be filed in response to a change in law
or the applicable interpretation of the SEC's staff, if later, within 60 days
after publication of the change in law or interpretation) but shall thereafter
cease to be effective (at any time that the Company and the Subsidiary
Guarantors are obligated to maintain the effectiveness thereof) without being
succeeded within 30 days by an additional Registration Statement (as defined in
the Exchange and Registration Rights Agreement) filed and declared
effective./[10] 11/
____________________
/10/ Include only for Initial Note when required by the Exchange and
Registration Rights Agreement.
140
2. Method of Payment
- ----------------------
Principal of, premium, if any, and interest on this Note will be payable,
and this Note may be exchanged or transferred, at the office or agency of the
Company in the Borough of Manhattan, The City of New York (which initially will
be an office of an Affiliate of the Trustee in New York, New York); at the
option of the Company, however, payment of interest may be made by check mailed
to the address of the Holder as such address appears in the Note Register; and
in addition, if a Holder of at least one million United States Dollars
($1,000,000) in aggregate principal amount of Notes has given wire transfer
instructions to us prior to the record date for a payment, the Company will make
such payment of principal of, premium, if any, and interest on, such Holder's
Note in accordance with those instructions. [Payment of principal of, premium,
if any, and interest on, this Note will be made by wire transfer of immediately
available Funds to the Depository or its nominee, as the case may be, as the
registered Holder of such global Note]/12/.
3. Paying Agent and Registrar
- -------------------------------
State Street Bank and Trust Company, a Massachusetts trust company, the
Trustee, will initially act as Paying Agent and Note Registrar. The Company may
change the Paying Agent or Note Registrar without prior notice and the Company
and any of its Domestic Subsidiaries may act as Paying Agent or Note Registrar.
4. Indenture
- --------------
This Note is one of the duly authorized issue of 9 1/2% Senior Subordinated
Notes Due 2009 of the Company (herein called the "Notes"), issued under an
Indenture, dated as of June 11, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Indenture," which term shall have the meanings
assigned to it in such instrument), among Select Medical Corporation, the
Subsidiary Guarantors and State Street Bank and Trust Company as Trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture) and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, any other guarantor upon this Note, the Trustee and the Holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The terms of the Notes include those stated in the
Indenture and those made a part of the Indenture by reference to the TIA. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of such terms.
________________________________________________________________________________
/11/ For an Initial Additional Note, add any similar provision, if any, as may
be agreed by the Company with respect to additional interest on such
Initial Additional Note.
/12/ Include only if Note is issued in global form.
141
Additional Notes may be issued under the Indenture which may vote as a class
with the Notes and otherwise be treated as Notes for purposes of the Indenture.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
This Note is entitled to the benefits of a certain senior subordinated
Subsidiary Guarantee by the Subsidiary Guarantors (and future Subsidiary
Guarantors) made for the benefit of the Holders. Reference is made to Article
Thirteen of the Indenture and to the Subsidiary Guarantees for terms relating to
such Subsidiary Guarantees, including the release, termination and discharge
thereof. Neither the Company nor any Subsidiary Guarantor shall be required to
make any notation on this Note to reflect any Subsidiary Guarantee or any such
release, termination or discharge.
5. Optional Redemption
- ------------------------
(a) The Notes will be redeemable, at the Company's option, in whole or in
part, and from time to time on and after June 15, 2005 and prior to maturity.
Such redemption may be made upon notice mailed by first-class mail to each
Holder's registered address in accordance with the Indenture. The Notes will be
so redeemable at the following Redemption Prices (expressed as a percentage of
principal amount), plus accrued interest, if any, to the relevant Redemption
Date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) if redeemed during
the 12-month period commencing on June 15 of the years set forth below:
Period Redemption
------
Price
----------
2005............................................. 104.750%
2006............................................. 103.167%
2007............................................. 101.583%
2008 and thereafter.............................. 100.000%
(b) In addition, before June 15, 2004, the Company at its option may on
any one or more occasions redeem the Notes in an aggregate principal amount
equal to up to 35% of the original aggregate principal amount of the Notes
(including the principal amount of any Additional Notes), with the Net Cash
Proceeds of one or more Equity Offerings, at a Redemption Price (expressed as a
percentage of principal amount thereof) of 109.50% plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that an aggregate principal amount of
-------- -------
the Notes equal to at least 65% of the original aggregate principal amount of
the Notes
142
(including the principal amount of any Additional Notes) must remain outstanding
after each such redemption and each such redemption must occur within 90 days
after the closing of such Equity Offering.
6. No Sinking Fund
- --------------------
The Notes will not be entitled to the benefit of a sinking fund.
7. Subordination
- ------------------
The Notes are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Notes may be paid. In addition, the Subsidiary Guarantees are or
shall be, as the case may be, subordinated to Subsidiary Guarantor Senior
Indebtedness. To the extent provided in the Indenture, Subsidiary Guarantor
Senior Indebtedness must be paid before any Subsidiary Guarantee may be paid.
The Company and any Subsidiary Guarantor agree, and each Holder by accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give such provisions effect and appoints the Trustee
as attorney-in-fact for such purposes.
8. Put Provisions
- -------------------
The Indenture provides that, upon the occurrence of a Change of Control,
each Holder will have the right to require the Company to repurchase all or any
part (in integral multiples of $1,000) of such Holder's Notes at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of such purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date). The Company will not be required to make a
Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in the Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes validly tendered and
not withdrawn under such Change of Control Offer.
9. Denominations; Transfer; Exchange
- --------------------------------------
The Notes are in registered form without coupons in denominations of $1,000
and whole multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture and subject to certain limitations set forth
therein. No service charge shall be made for any transfer or exchange of Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. The
Company shall not be required (i) to issue, transfer or exchange any Note during
-
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption (or purchase) of Notes selected for
143
redemption (or purchase) under Section 1004 of the Indenture and ending at the
close of business on the day of such mailing, or (ii) to transfer or exchange
--
any Note so selected for redemption (or purchase) in whole or in part.
10. Persons Deemed Owners
- --------------------------
The registered Holder of this Note may be treated as the owner of it for
all purposes.
11. Unclaimed Money
- --------------------
The Trustee shall pay to the Company upon a Company Request any money held
by it for the payment of principal (and premium, if any) or interest that
remains unclaimed for two years. After payment to the Company, Holders entitled
to money must look to the Company for payment as general creditors and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
12. Discharge and Defeasance
- -----------------------------
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Notes and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of, premium (if any) and interest on the Notes to redemption or
maturity, as the case may be.
13. Amendment, Waiver
- ----------------------
Subject to certain exceptions, (i) the Indenture may be amended with the
-
consent of the Holders of a majority in principal amount of the Notes then
outstanding and (ii) any past or existing default or compliance with any
--
provisions may be waived with the consent of the Holders of a majority in
principal amount of the Notes then outstanding (including in each case, consents
obtained in connection with a tender offer or exchange offer for Notes). In
certain instances provided in the Indenture, the Indenture may be amended
without the consent of any Holder.
14. Defaults and Remedies
- --------------------------
If an Event of Default with respect to the Notes occurs and is continuing,
the Notes may be declared due and payable immediately in the manner and with the
effect provided in the Indenture.
15. No Recourse Against Others
- -------------------------------
No director, officer, employee, incorporator or stockholder, as such,
of the Company, any Subsidiary Guarantor or any subsidiary thereof shall have
any liability for
144
any obligation of the Company, or any Subsidiary Guarantor on the Notes under
this Indenture, the Notes or any Subsidiary Guarantee, or for any claim based
on, in respect of, or by reason of, any such obligation or its creation. Each
Noteholder, by accepting the Notes, waives and releases all such liability. This
waiver and release are part of the consideration for issuance of the Notes.
16. Governing Law
- ------------------
THE INDENTURE, THIS NOTE AND THE SUBSIDIARY GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THE
TRUSTEE, THE COMPANY, EACH SUBSIDIARY GUARANTOR, ANY OTHER OBLIGOR IN RESPECT OF
THE NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO
THE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE
BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
17. Authentication
- -------------------
This Note shall not be valid until an authorized signatory of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on
the other side of this Note.
18. Abbreviations
- ------------------
Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT
TEN (=joint tenants with rights of survivorship and not as tenants in common),
CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
19. CUSIP Numbers
- ------------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed hereon.
145
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
-----
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
[TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:______________________ ______________________________
NOTICE: To be executed by an executive
officer]/14/
_____________________
/14/ Include only for an Initial Note or an Initial Additional Note that bears
the Private Placement Legend, in accordance with the Indenture.
146
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 410 or 414 of the Indenture, check the box: [ ].
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 410 or 414 of the Indenture, state the amount (in
principal amount):
$
Date: __________________ Signed: ___________________________
(Sign exactly as your name appears on the other
side of the Note)
Signature Guarantee:_______________________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
-----
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
147
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Date of Amount of decreases Amount of Principal amount Signature
Exchange in Principal increases in of this Global Note of authorized
Amount of this Principal following such officer or
Global Note Amount of this decreases or Trustees of
Global Note increases Securities
Custodian
148
Exhibit B
Form of Supplemental Indenture in Respect of Subsidiary Guarantee
-----------------------------------------------------------------
SUPPLEMENTAL INDENTURE, dated as of [_________] (this "Supplemental
------------
Indenture"), among [name of [New Note Subsidiary Guarantor[s]1] (the "New
- --------- -------------------------------- ---
Subsidiary Guarantor[s]"), the Company Medical Corporation, a Delaware
- -----------------------
corporation (together with its successors and assigns, the "Company"), the then
existing Note Subsidiary Guarantors under the Indenture referred to below (the
"Existing Subsidiary Guarantors"), and State Street Bank and Trust Company, as
------------------------------
Trustee (the "Trustee") under the Indenture referred to below.
-------
W I T N E S S E T H:
WHEREAS, the Company, the Existing Subsidiary Guarantors and the Trustee
have heretofore become parties to an Indenture, dated as of June 11, 2001, as
amended (as amended, supplemented, waived or otherwise modified, the
"Indenture"), providing for the issuance of 9 1/2% Senior Subordinated Notes Due
---------
2009 of the Company (the "Notes");
-----
WHEREAS, Section 413 of the Indenture provides that the Company is required
-----------
to or may cause the New Subsidiary Guarantors to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Note Subsidiary
Guarantors shall guarantee the Notes pursuant to a Subsidiary Guarantee on the
terms and conditions set forth herein and in Article Thirteen of the Indenture;
WHEREAS, [the][each] New Subsidiary Guarantor desires to enter into this
Supplemental Indenture for good and valuable consideration, including
substantial economic benefit in that the financial performance and condition of
such New Subsidiary Guarantor is dependent on the financial performance and
condition of the Company and on [the] [such] New Subsidiary Guarantor's access
to working capital through the Company's access to revolving credit borrowings
under the Senior Credit Agreement; and
WHEREAS, pursuant to Section 901 of the Indenture, the parties hereto are
authorized to execute and deliver this Supplemental Indenture to amend the
Indenture, without the consent of any Holder;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor[s], the Company, the Existing Subsidiary Guarantors and the
Trustee mutually covenant and agree for the benefit of the Holders of the Notes
as follows:
______________________________
/1/ Insert as appropriate
149
1. Defined Terms. As used in this Supplemental Indenture, terms defined in
-------------
the Indenture or in the preamble or recital hereto are used herein as therein
defined. The words "herein," "hereof" and "hereby" and other words of similar
import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
2. Agreement to Subsidiary Guarantee. [The] [Each] New Subsidiary Guarantor
---------------------------------
hereby agrees, jointly and severally with [all] [any] other New Subsidiary
Guarantor[s] and all Existing Subsidiary Guarantors, fully and unconditionally,
to guarantee the Subsidiary Guaranteed Note obligations under the Indenture and
the Notes on the terms and subject to the conditions set forth in Article
Thirteen of the Indenture and to be bound by (and shall be entitled to the
benefits of) all other applicable provisions of the Indenture as a Subsidiary
Guarantor. The Subsidiary Guarantee of each New Subsidiary Guarantor is subject
to the subordination provisions of the Indenture.
3. Termination, Release and Discharge. [The] [Each] New Subsidiary
----------- ---------------------
Guarantor's Subsidiary Guarantee shall terminate and be of no further force or
effect, and [the] [each] New Subsidiary Guarantor shall be released and
discharged from all obligations in respect of such Subsidiary Guarantee, as and
when provided in Section 1303 of the Indenture.
4. Parties. Nothing in this Supplemental Indenture is intended or shall be
-------
construed to give any Person, other than the Holders and the Trustee, any legal
or equitable right, remedy or claim under or in respect of [the] [each] New
Subsidiary Guarantor's Subsidiary Guarantee or any provision contained herein or
in Article Thirteen of the Indenture.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THE TRUSTEE,
THE COMPANY, EACH SUBSIDIARY GUARANTOR, ANY OTHER OBLIGOR IN RESPECT OF THE
NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE OR THE NOTES.
6. Ratification of Indenture; Supplemental Indentures Part of Indenture.
------------------------- -----------------------------------------
Except as expressly amended hereby, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall remain
in full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder of Notes heretofore or hereafter
authenticated and delivered shall be bound
150
hereby. The Trustee makes no representation or warranty as to the validity or
sufficiency of this Supplemental Indenture.
7. Counterparts. The parties hereto may sign one or more copies of this
------------
Supplemental Indenture in counterparts, all of which together shall constitute
one and the same agreement.
8. Headings. The section headings herein are for convenience of reference
--------
only and shall not be deemed to alter or affect the meaning or interpretation of
any provisions hereof.
151
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NAME OF NEW SUBSIDIARY
GUARANTOR],/2/ as New Subsidiary Guarantor
By:________________________________
Name:
Title:
SELECT MEDICAL CORPORATION
By:________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:________________________________
Name:
Title:
________________________________
/2/ Add a signature block for each New Subsidiary Guarantor.
152
Exhibit C
Form of Certificate to be Delivered in Connection with
------------------------------------------------------
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
Select Medical Corporation
c/o State Street Bank and Trust Company
2 Avenue De Lafayette
5th Floor
Boston, Massachusetts 02111
Attention: Corporate Trust Operations
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $_________ principal
amount of the 9 /1/2/% Senior Subordinated Notes due 2009 of the Company Medical
Corporation ("the Company").
Upon transfer, the notes would be registered in the name of the new
beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor", within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
purchasing for our own account or for the account of such an institutional
accredited investor at least $250,000 principal amount of the notes, and we are
acquiring the notes not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act. We have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the notes, and we invest in or purchase
securities similar to the notes in the normal course of our business. We, and
any accounts for which we are acting, are each able to bear the economic risk of
our or its investment.
2. We understand that the notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing notes to offer, sell or otherwise transfer
such notes prior to the date
153
that is two years after the later of the date of original issue and the last
date on which the Company or any affiliate of the Company was the owner of such
notes or any predecessor thereto, which we refer to as the resale restriction
termination date, only (a) to the Company or its subsidiaries, (b) pursuant to a
registration statement that has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
investor, or QIB, under Rule 144A that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own account
or for the account of such an institutional accredited investor, in each case in
a minimum principal amount of Securities of $250,000 or (f) pursuant to any
other available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the resale restriction termination date. If any resale or
other transfer of the notes is proposed to be made pursuant to clause (e) above
prior to the resale restriction termination date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Company and the trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the trustee
reserve the right prior to any offer, sale or other transfer prior to the resale
restriction termination date of the notes pursuant to clauses (d), (e) or (f)
above to require the delivery of an opinion of counsel, certifications and/or
other information satisfactory to the Company and the trustee.
TRANSFEREE:________________________
BY:________________________________
154
Exhibit D
Form of Regulation S Certificate
--------------------------------
Regulation S Certificate
------------------------
Select Medical Corporation
c/o State Street Bank and Trust Company
2 Avenue de Lafayette
6th Floor
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Department
Re: SELECT MEDICAL CORPORATION (the "Company")
9 1/2% Senior Subordinated Notes Due 2009 (the "Notes")
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $_____ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S ("Regulation S") under the Securities Act of 1933,
------------
as amended (the "Securities Act"), and accordingly, we hereby certify as
--------------
follows:
1. The offer of the Notes was not made to a person in the
United States (unless such person or the account held by it for which
it is acting is excluded from the definition of "U.S. person" pursuant
to Rule 902(k) of Regulation S under the circumstances described in
Rule 902(h)(3) of Regulation S) or specifically targeted at an
identifiable group of U.S. citizens abroad.
2. Either (a) at the time the buy order was originated, the
buyer was outside the United States or we and any person acting on our
behalf reasonably believed that the buyer was outside the United States
or (b) the transaction was executed in, on or through the facilities of
a designated offshore securities market, and neither we nor any person
acting on our behalf knows that the transaction was pre-arranged with a
buyer in the United States.
3. No directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a)(2) or Rule
904(a)(2) of Regulation S, as applicable.
4. The proposed transfer of Notes is not part of a plan or
scheme to evade the registration requirements of the Securities Act.
155
5. If we are a dealer or a person receiving a selling
concession or other fee or remuneration in respect of the Notes, and
the proposed transfer takes place before the Regulation S Note Exchange
Date referred to in the Indenture, dated as of June 11, 2001, among the
Company, the Subsidiary Guarantors party thereto and the Trustee, or we
are an officer or director of the Company or a distributor, we certify
that the proposed transfer is being made in accordance with the
provisions of Rules 903 and 904 of Regulation S.
6. We have advised the transferee of the transfer
restrictions applicable to the Notes.
You, the Company and counsel for the Company are entitled to rely upon
this Certificate and are irrevocably authorized to produce this Certificate or a
copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[NAME OF SELLER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: _________________, 200_
156
Exhibit E
Form of Certificate of Beneficial Ownership
-------------------------------------------
Select Medical Corporation
c/o State Street Bank and Trust Company
2 Avenue de Lafayette
6th Floor
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Department
Re: SELECT MEDICAL CORPORATION
9 1/2% Senior Subordinated Notes Due 2009 (the "Notes")
------------------------------------------------------
Ladies and Gentlemen:
This letter relates to $___________ principal amount of Notes
represented by the offshore global note certificate (the "Regulation S Global
-------------------
Note"). Pursuant to Section 313(4) of the Indenture dated as of June 11, 2001
- ----
relating to the Notes (the "Indenture"), we hereby certify that (1) we are the
-
beneficial owner of such principal amount of Notes represented by the Regulation
S Global Note and (2) we are either (i) a Non-U.S. Person to whom the Notes
- -
could be transferred in accordance with Rule 904 of Regulation S ("Regulation
----------
S") promulgated under the Securities Act of 1933, as amended (the "Act") or (ii)
- - --- --
a U.S. Person who purchased securities in a transaction that did not require
registration under the Act. Accordingly, you are hereby requested to issue a
Regulation S Physical Note representing the undersigned's interest in the
principal amount of Notes represented by the Regulation S Global Note, all in
the manner provided by the Indenture.
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:__________________________
Authorized Signature
157
Schedule 1
Existing Joint Venture Subsidiaries
-----------------------------------
Canadian Back Institute Limited
CBI Brampton Limited Partnership
CBI Calgary Limited Partnership
CBI Fraser Valley Limited Partnership
CBI Holdings Ltd.
CBI Physiotherapists Corporation
CBI Professional Services Inc.
CBI South Calgary Limited Partnership
CBI Vancouver Limited Partnership
CBI Victoria Limited Partnership
CBI Windsor Limited Partnership
Dynamic Rehabilitation Inc.
Kentucky Orthopedic Rehabilitation, LLC
Medical Information Management Systems, LLC
Millenium Rehab Services, L.L.C.
1263568 Ontario Limited (London Group)
Rehab Advantage Therapy Services, LLC
Rehab Health, Inc.
Select Houston Partners, L.P.
S.T.A.R. Rehab, Inc.
Select Management Services, LLC
Select Specialty Hospital - Biloxi, Inc.
TJ Corporation I, L.L.C.
158
Schedule 2
Seller Notes
------------
1. NovaCare Orthotics & Prosthetics East, Inc. 6% Subordinated Promissory
Note due August 29, 2002 principal amount $350,000 issued to Active
Prosthetics and Orthotics, Inc.
2. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due August 31, 2001 principal amount $80,000 issued to
Theodore C Moore.
3. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due November 30, 2002 principal amount $87,500 issued
to Larry Berger.
4. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due November 30, 2002 principal amount $87,500 issued
to William White.
5. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due November 21, 2002 principal amount $100,000 issued
to Stewart Services Corporation.
6. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due November 21, 2002 principal amount $100,000 issued
to The Meadows 1997 Charitable Remainder Unitrust.
7. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due September 15, 2002 principal amount $550,000 issued
to Spine-Hand-Arm Rehabilitation & Ergonomics, Inc.
8. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due April 30, 2002 principal amount $700,000 issued to
the Donald A. Chu Living Trust.
9. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due November 21, 2002 principal amount $100,000 issued
to The Walder 1997 Charitable Remainder Unitrust.
10. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due September 30, 2002 principal amount $200,000 issued
to Susan L. Erwin.
11. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due February 28, 2002 principal amount $75,000 issued
to Phillip A. Sauer, PT.
12. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due February 27, 2003 principal amount $275,000 issued
to Borden Family Investments, L.L.C.
13. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due February 28, 2003 principal amount $300,000 issued
to Richard Reed and Donna Reed.
14. NovaCare Outpatient Rehabilitation West, Inc. 6% Subordinated
Promissory Note due July 13, 2003 principal amount $150,000 issued to
Charles Orofino.
15. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 31, 2001 principal amount $241,267.50
issued to Donna and Salvatore LaFata.
16. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 31, 2001 principal amount $16,267.50
issued to Yvonne Bacci.
159
17. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 31, 2001 principal amount $192,465 issued
to Maurice W. Beels.
18. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due June 30, 2001 principal amount $12,500 issued to
Scott G. Knoche.
19. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due June 30, 2001 principal amount $150,000 issued to
David Brummel.
20. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due June 30, 2001 principal amount $87,500 issued to
the Gregory G. Swartz Trust.
21. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due August 31, 2001 principal amount $75,000 issued to
Mary Lou Fricke Neal.
22. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 31, 2002 principal amount $350,000 issued
to Peter Tailov.
23. NovaCare Outpatient Rehabilitation East, Inc. 6.5% Subordinated
Promissory Note due February 28, 2002 principal amount $2,250,000
issued to Health Trax Rehabilitation Systems, Inc.
24. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due March 21, 2002 principal amount $330,000 issued to
Wayne D. Bryant.
25. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due March 21, 2002 principal amount $220,000 issued to
Michael D. Wah.
26. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due March 24, 2002 principal amount $250,000 issued to
Macon Physical Therapy & Rehabilitation Center, P.C.
27. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due May 30, 2002 principal amount $400,000 issued to
Northville Physical Therapy & Rehabilitation P.C.
28. NovaCare Outpatient Rehabilitation East, Inc. 6.5% Subordinated
Promissory Note due May 31, 2002 principal amount $800,000 issued to
Mark Mortland.
29. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due September 10, 2002 principal amount $350,000 issued
to Kenneth Lochbaum.
30. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due September 30, 2002 principal amount $500,000 issued
to Associates in Physical Therapy, Inc.
31. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due November 24, 2002 principal amount $400,000 issued
to Mark Butler.
32. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due May 30, 2002 principal amount $1,100,000 issued to
Subbash Kapur, Trustee of the Subbash Kapur Living Trust.
33. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due November 25, 2002 principal amount $100,000 issued
to Al Saveri L.P.T., P.C.
34. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due November 26, 2002 principal amount $1,175,000
issued to Kurt Gelfand.
160
35. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due November 26, 2002 principal amount $1,175,000
issued to Kurt Gelfand.
36. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due November 28, 2002 principal amount $1,100,000
issued to Rochester Knee and Sports Therapy, Inc.
37. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 29, 2002 principal amount $150,000 issued
to Liberty Physical Rehabilitation Center, Inc.
38. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 29, 2002 principal amount $200,000 issued
to Boardwalk Physical Rehabilitation Center, Inc.
39. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due December 31, 2002 principal amount $925,000 issued
to Carroll County Physical Therapy, LLP.
40. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due March 31, 2002 principal amount $250,000 issued to
Greater Baltimore Sports Medicine and Rehabilitation Center, L.L.C.
41. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due January 30, 2003 principal amount $325,000 issued
to Two Rivers Center, Inc.
42. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due January 30, 2003 principal amount $150,000 issued
to Orthosport Rehabilitation.
43. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due February 27, 2003 principal amount $500,000 issued
to Elena Wahbeh Foster.
44. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due April 29, 2003 principal amount $300,000 issued to
Nickie Siegel & Associates, P.A.
45. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due April 30, 2003 principal amount $75,000 issued to
Joseph Vierzbicki.
46. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due July 31, 2003 principal amount $200,000 issued to
Robert E. Mangine and Marsha Eifert-Mangine.
47. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due August 31, 2003 principal amount $125,000 issued to
Advance Rehab Center, Inc.
48. NovaCare Outpatient Rehabilitation East, Inc. 6% Subordinated
Promissory Note due July 28, 2001 principal amount $5,000,000 issued to
John E. Skvarla III and J. Wayne Cannady as representatives to be held
in trust for the benefit of the shareholders of Pro Active, Inc.
49. Union Square Center for Rehabilitation & Sports Medicine, Inc. 10%
Subordinate Promissory Note due April 21, 2002 principal amount $90,000
issued to Sheryl Rakes.
161
50. Rehabclinics, Inc. 6% Subordinated Promissory Note due September 30,
2001 principal amount $1,321,279.79 issued to Physical Therapy and
Sport Services, P.C.
51. NovaCare Occupational Health Services, Inc. 6% Subordinated Promissory
Note due September 30, 2001 principal amount $9,000,000 issued to
Liberty Mutual Managed Care, Inc.
52. NC Resources, Inc. Subordinated Promissory Note due February 1, 2002
principal amount $2,700,000 issued to Mark I. Congress, M.D.
162