==============================================================================
GENESIS ELDERCARE ACQUISITION CORP.,
Issuer
and
PNC BANK, NATIONAL ASSOCIATION,
Trustee
and
BANQUE INTERNATIONALE A LUXEMBOURG S.A.,
Paying Agent
----------------
Indenture
Dated as of August 11, 1997
----------------
9% Senior Subordinated Notes due 2007
==============================================================================
CROSS-REFERENCE TABLE
---------------------
TIA Sections Indenture Sections
- ------------ ------------------
ss. 310(a)(1)........................................................ 7.10
(a)(2)........................................................ 7.10
(b)........................................................... 7.08
ss. 313(c)........................................................... 7.06; 11.02
ss. 314(a)........................................................... 4.17; 11.02
(a)(4)........................................................ 4.16; 11.02
(c)(1)........................................................ 11.03
(c)(2)........................................................ 11.03
(e)........................................................... 11.04
ss. 315(b)........................................................... 7.05; 11.02
ss. 316(a)(1)(A)..................................................... 6.05
(a)(1)(B)..................................................... 6.04
(b)........................................................... 6.07
ss. 317(a)(1)........................................................ 6.08
(a)(2)........................................................ 6.09
ss. 318(a)........................................................... 11.01
(c)........................................................... 11.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.................................................................................. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............................................ 24
SECTION 1.03. Rules of Construction........................................................................ 25
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.............................................................................. 25
SECTION 2.02. Restrictive Legends.......................................................................... 27
SECTION 2.03. Execution, Authentication and Denominations.................................................. 29
SECTION 2.04. Registrar and Paying Agent................................................................... 29
SECTION 2.05. Paying Agent to Hold Money in Trust.......................................................... 30
SECTION 2.06. Transfer and Exchange........................................................................ 31
SECTION 2.07. Book-Entry Provisions for Global Notes....................................................... 31
SECTION 2.08. Special Transfer Provisions.................................................................. 33
SECTION 2.09. Replacement Notes............................................................................ 37
SECTION 2.10. Outstanding Notes............................................................................ 37
SECTION 2.11. Temporary Notes.............................................................................. 37
SECTION 2.12. Cancellation................................................................................. 38
SECTION 2.13. CUSIP Numbers................................................................................ 38
SECTION 2.14. Defaulted Interest........................................................................... 38
SECTION 2.15. Issuance of Additional Notes................................................................. 39
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption; Mandatory Redemption.................................................... 39
SECTION 3.02. Notices to Trustee........................................................................... 40
SECTION 3.03. Selection of Notes to Be Redeemed............................................................ 40
SECTION 3.04. Notice of Redemption......................................................................... 40
SECTION 3.05. Effect of Notice of Redemption............................................................... 41
SECTION 3.06. Deposit of Redemption Price.................................................................. 41
SECTION 3.07. Payment of Notes Called for Redemption....................................................... 42
SECTION 3.08. Notes Redeemed in Part....................................................................... 42
- --------
Note: The Table of Contents shall not for any purposes be deemed to be a
part of the Indenture.
ii
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes............................................................................. 42
SECTION 4.02. Maintenance of Office or Agency.............................................................. 42
SECTION 4.03. Limitation on Indebtedness................................................................... 43
SECTION 4.04. Limitation on Restricted Payments............................................................ 43
SECTION 4.05. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.............................................................. 45
SECTION 4.06. Limitations on Preferred Stock of Restricted Subsidiaries.................................... 46
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Subsidiaries............................. 46
SECTION 4.08. Limitation on Transactions with Stockholders and Affiliates.................................. 47
SECTION 4.09. Limitation on Liens.......................................................................... 48
SECTION 4.10. Limitation on Asset Sales.................................................................... 49
SECTION 4.11. Repurchase of Notes upon a Change in Control................................................. 49
SECTION 4.12. Limitation on Senior Subordinated Indebtedness............................................... 50
SECTION 4.13. Limitation on Management Fees................................................................ 50
SECTION 4.14. Existence.................................................................................... 50
SECTION 4.15. Payment of Taxes and Other Claims............................................................ 51
SECTION 4.16. Maintenance of Properties and Insurance...................................................... 51
SECTION 4.17. Notice of Defaults........................................................................... 51
SECTION 4.18. Compliance Certificates...................................................................... 52
SECTION 4.19. Commission Reports and Reports to Holders.................................................... 52
SECTION 4.20. Waiver of Stay, Extension or Usury Laws...................................................... 53
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Issuer May Merge, Etc................................................................... 53
SECTION 5.02. Successor Substituted........................................................................ 54
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................................................................ 55
SECTION 6.02. Acceleration................................................................................. 56
SECTION 6.03. Other Remedies............................................................................... 57
SECTION 6.04. Waiver of Past Defaults...................................................................... 57
SECTION 6.05. Control by Majority.......................................................................... 57
SECTION 6.06. Limitation on Suits.......................................................................... 57
SECTION 6.07. Rights of Holders to Receive Payment......................................................... 58
SECTION 6.08. Collection Suit by Trustee................................................................... 58
iii
SECTION 6.09. Trustee May File Proofs of Claim............................................................. 59
SECTION 6.10. Priorities................................................................................... 59
SECTION 6.11. Undertaking for Costs........................................................................ 59
SECTION 6.12. Restoration of Rights and Remedies........................................................... 60
SECTION 6.13. Rights and Remedies Cumulative............................................................... 60
SECTION 6.14. Delay or Omission Not Waiver................................................................. 60
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General ..................................................................................... 60
SECTION 7.02. Certain Rights of Trustee.................................................................... 61
SECTION 7.03. Individual Rights of Trustee................................................................. 62
SECTION 7.04. Trustee's Disclaimer......................................................................... 62
SECTION 7.05. Notice of Default............................................................................ 62
SECTION 7.06. Reports by Trustee to Holders................................................................ 62
SECTION 7.07. Compensation and Indemnity................................................................... 62
SECTION 7.08. Replacement of Trustee....................................................................... 63
SECTION 7.09. Successor Trustee by Merger, Etc............................................................. 64
SECTION 7.10. Eligibility.................................................................................. 64
SECTION 7.11. Money Held in Trust.......................................................................... 64
SECTION 7.12. Withholding Taxes............................................................................ 65
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Issuer's Obligations.......................................................... 65
SECTION 8.02. Defeasance and Discharge of Indenture........................................................ 66
SECTION 8.03. Defeasance of Certain Obligations............................................................ 68
SECTION 8.04. Application of Trust Money................................................................... 70
SECTION 8.05. Repayment to Issuer.......................................................................... 70
SECTION 8.06. Reinstatement................................................................................ 70
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................................................... 71
SECTION 9.02. With Consent of Holders...................................................................... 71
SECTION 9.03. Revocation and Effect of Consent............................................................. 72
SECTION 9.04. Notation on or Exchange of Notes............................................................. 73
SECTION 9.05. Trustee to Sign Amendments, Etc.............................................................. 73
SECTION 9.06. Conformity with Trust Indenture Act.......................................................... 74
iv
ARTICLE TEN
SECURITY
SECTION 10.01. Security.................................................................................... 74
ARTICLE ELEVEN
SUBORDINATION
SECTION 11.01. Agreement to Subordinate.................................................................... 75
SECTION 11.02. Distribution on Dissolution, Liquidation, Bankruptcy or
Reorganization....................................................................... 76
SECTION 11.03. Suspension of Payment When Senior Indebtedness in Default................................... 77
SECTION 11.04. Payment Permitted if No Default............................................................. 79
SECTION 11.05. Subrogation to Rights of Holders of Senior Indebtedness..................................... 79
SECTION 11.06. Provisions Solely to Define Relative Rights................................................. 79
SECTION 11.07. Trustee to Effectuate Subordination......................................................... 80
SECTION 11.08. No Waiver of Subordination Provisions....................................................... 80
SECTION 11.09. Notice to Trustee........................................................................... 81
SECTION 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent.............................. 82
SECTION 11.11. Rights of Trustee as a Holder of Senior Indebtedness; Preservation
of Trustee's Rights.................................................................. 82
SECTION 11.12. Trust Moneys and Escrowed Funds Not Subordinated............................................ 82
SECTION 11.13. No Suspension of Remedies................................................................... 82
SECTION 11.14. Trustee's Relation to Senior Indebtedness................................................... 82
SECTION 11.15. Other Rights of Holders of Senior Indebtedness.............................................. 83
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939................................................................. 83
SECTION 12.02. Notices..................................................................................... 83
SECTION 12.03. Certificate and Opinion as to Conditions Precedent.......................................... 85
SECTION 12.04. Statements Required in Certificate or Opinion............................................... 85
SECTION 12.05. Rules by Trustee, Paying Agent or Registrar................................................. 86
SECTION 12.06. Payment Date Other Than a Business Day...................................................... 86
SECTION 12.07. Governing Law............................................................................... 86
SECTION 12.08. No Adverse Interpretation of Other Agreements............................................... 86
SECTION 12.09. No Recourse Against Others.................................................................. 86
SECTION 12.10. Successors.................................................................................. 87
SECTION 12.11. Duplicate Originals......................................................................... 87
SECTION 12.12. Separability................................................................................ 87
SECTION 12.13. Table of Contents, Headings, Etc............................................................ 87
v
EXHIBIT A Form of Note..................................................................................A-1
EXHIBIT B Form of Certificate...........................................................................B-1
EXHIBIT C Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Non-QIB Accredited Investors.........................................C-1
EXHIBIT D Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S.........................................................D-1
EXHIBIT E Form of Supplemental Indenture................................................................E-1
INDENTURE, dated as of August 11, 1997, between GENESIS ELDERCARE
ACQUISITION CORP., a Delaware corporation (the "Issuer"), PNC Bank, National
Association, a national banking association duly organized under the laws of
the United States of America (the "Trustee"), and Banque Internationale a
Luxembourg S.A. (a "Paying Agent").
RECITALS
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $250,000,000
aggregate principal amount of the Issuer's 9% Senior Subordinated Notes due
2007 (the "Notes") issuable as provided in this Indenture. The Notes will be
secured pursuant to the terms of an Escrow Agreement (as defined herein) as
provided by Article Ten of this Indenture. All things necessary to make this
Indenture a valid agreement of the Issuer, in accordance with its terms, have
been done, and the Issuer has done all things necessary to make the Notes,
when executed by the Issuer and authenticated and delivered by the Trustee
hereunder and duly issued by the Issuer, the valid obligations of the Issuer
as hereinafter provided.
This Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act of 1939 that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders, the Issuer and the Trustee, as
follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person (i) existing
at the time such Person becomes a Restricted Subsidiary or (ii) existing at
the time and assumed in connection with the acquisition of assets by a
Restricted Subsidiary from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary or such acquisition; provided that Indebtedness of a
Person which is redeemed, defeased, retired or otherwise repaid at the time of
or immediately upon consummation of the transactions by which such Person
becomes a Restricted Subsidiary or such asset acquisition shall not be
Acquired Indebtedness. Acquired Indebtedness shall be deemed to be incurred on
the date of the related acquisition of assets from any Person or the date the
acquired Person becomes a Restricted Subsidiary.
2
"Affiliate" means, with respect to any specified Person, (i) any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person, (ii) any other
Person that owns, directly or indirectly, 5% or more of such specified
Person's Capital Stock, (iii) any officer or director of (A) any such
specified Person, (B) any Subsidiary of such specified Person or (C) any
Person described in clause (i) or (ii) above or (iv) any other Person having a
relationship with any natural Person described in clause (i), (ii) or (iii)
above by blood, marriage or adoption not more remote than first cousin or any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such other Person described in this clause (iv).
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent" means any Registrar, Co-Registrar, Paying Agent or
authenticating agent.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (i) any
Capital Stock of any Restricted Subsidiary; (ii) all or substantially all of
the properties and assets of any division or line of business of the Issuer or
its Restricted Subsidiaries; or (iii) any other properties or assets of the
Issuer or any Restricted Subsidiary, other than in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include (a) any transfer of properties and assets that is governed by Article
Five, (b) any transfer of properties or assets of the Issuer to a Restricted
Subsidiary, or of a Restricted Subsidiary to the Issuer or another Restricted
Subsidiary, (c) any transfer of inventory, receivables and other current
assets, (d) any transfer of assets for consideration at least equal to the
Fair Market Value of the assets transferred, to the extent that the
consideration received would satisfy clause (B) of Section 4.10, (e) the
Therapy Sale, (f) the Pharmacy Sale, or (g) any transfer of property or assets
with a Fair Market Value not in excess of $1 million in any transaction or
series of related transactions.
"Attributable Debt" in respect of a sale-leaseback transaction or an
operating lease in respect of a healthcare facility means, at the time of
determination, the present value (discounted at the interest rate implicit in
the lease, compounded semiannually) of the obligation of the lessee of the
property subject to such sale-leaseback transaction or operating lease in
respect of a healthcare facility for rental payments during the remaining term
of the lease included in such transaction including any period for which such
lease has been extended or may, at the option of the lessor, be extended or
until the earliest date on which the lessee may terminate such lease without
penalty or upon payment of penalty (in which case the rental payments shall
include such
3
penalty), after excluding all amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water, utilities and
similar charges.
"Average Life" means, as of the date of determination with respect to
any Indebtedness, the quotient obtained by dividing (i) the sum of the
products of (A) the number of years from the date of determination to the date
or dates of each successive scheduled principal payment of such Indebtedness
multiplied by (B) the amount of each such principal payment by (ii) the sum of
all such principal payments.
"Bankruptcy Law" means Title 11, United States Code, as amended, or
any similar United States Federal or State law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization or relief of
debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the Board of Directors of the Issuer or
any committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Issuer to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in The City of New York, or in the city of the
Corporate Trust Office of the Trustee, are authorized by law to close.
"Capital Lease Obligation" means the discounted present value of the
rental obligations under any lease of real or personal property which, in
accordance with GAAP, is required to be recorded on the balance sheet of such
Person as a capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person's capital stock or equity interests.
"Cash Collateral Account" means the account established with the
Trustee pursuant to the terms of the Escrow Agreement for the deposit of the
net proceeds from the sale of the Notes and such other purposes as specified
therein.
"Cash Equivalent" means (i) any security, maturing not more than six
months after the date of acquisition, issued by the United States of America,
or an instrumentality or agency thereof and guaranteed fully as to principal,
premium, if any, and interest by the United States of America, (ii) any
certificate of deposit, time deposit, money market account or bankers'
acceptance, maturing not more than six months after the date of acquisition,
issued by any
4
commercial banking institution that is a member of the Federal Reserve System
and that has combined capital and surplus and undivided profits of not less
than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard & Poor's Ratings Services or any successor rating agency
and (iii) commercial paper, maturing not more than three months after the date
of acquisition, issued by any corporation (other than an Affiliate or
Subsidiary of the Issuer) organized and existing under the laws of the United
States of America with a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Moody's Investors Service,
Inc. or any successor rating agency, or "A-1" (or higher) according to
Standard & Poor's Ratings Services or any successor rating agency.
"Change in Control" means any time that (i) any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
other than an Existing Stockholder or Genesis ElderCare Corp., in a single
transaction or through a series of related transactions, is or becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 35% of the total voting power of the
Voting Stock of the Issuer on a fully diluted basis and such ownership is
greater than the amount of voting power of the Voting Stock of the Issuer, on
a fully diluted basis, held by Genesis and its Affiliates on such date; (ii)
the Issuer consolidates or merges with or into another corporation or conveys,
transfers or leases all or substantially all of its assets to any Person, or
any corporation consolidates or merges with or into the Issuer, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Issuer is changed into or exchanged for cash, securities or other property,
other than any such transaction where (A) the outstanding Voting Stock of the
Issuer is changed into or exchanged for (x) Voting Stock of the surviving
corporation which is not Redeemable Capital Stock or (y) cash, securities or
other property in an amount which could be paid by the Issuer as a Restricted
Payment under Section 4.04 (and such amount shall be treated as a Restricted
Payment), and (B) the holders of the Voting Stock of the Issuer immediately
prior to such transaction own, directly or indirectly, not less than 50% of
the Voting Stock of the surviving corporation immediately after such
transaction; (iii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of the
Issuer (together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of the Issuer
was (a) approved by a vote of at least 66% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved or (b) approved
by Genesis in connection with its acquisition of the Common Stock of Genesis
ElderCare Corp. held by Cypress or TPG) cease for any reason to constitute a
majority of the Board of Directors of the Issuer then in office; or (iv) the
Issuer is liquidated or dissolved or adopts a plan of liquidation.
"Closing Date" means the date on which the Notes are originally
issued under this Indenture.
5
"Collateral" means the Collateral as defined in the Escrow Agreement.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the date of the Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
"Consolidated EBITDA" of any Person means, with respect to any
period, the Consolidated Net Income of such Person for such period, plus, to
the extent such amount was deducted in calculating such Consolidated Net
Income (i) Consolidated Income Tax Expense, (ii) depreciation expense, (iii)
amortization expense, (iv) Consolidated Interest Expense, (v) all other
non-cash items reducing Consolidated Net Income (other than items that will
require cash payments and for which an accrual or reserve is, or is required
by GAAP to be, made), less all non-cash items increasing Consolidated Net
Income and (vi) all management fees, and minus all management fees paid during
such period (whether or not such fees were deducted in calculating
Consolidated Net Income for such period), all as determined on a consolidated
basis in accordance with GAAP; provided that, if any Restricted Subsidiary is
not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA of the Issuer
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of the Consolidated Net Income
attributable to such Restricted Subsidiary multiplied by (B) the percentage
ownership interest in the income of such Restricted Subsidiary not owned on
the last day of such period by the Issuer or any of its Restricted
Subsidiaries.
"Consolidated Income Tax Expense" means for any period, as applied to
any Person, the provision for federal, state, local and foreign income taxes
of such Person and its Consolidated Subsidiaries for such period (other than
income taxes (either positive or negative) attributable to extraordinary and
non-recurring gains or losses or sales of assets) as determined in accordance
with GAAP.
"Consolidated Interest Expense" means, without duplication, for any
period, as applied to any Person, the sum of (i) the interest expense of such
Person and its Consolidated Subsidiaries for such period, including, without
limitation, (A) amortization of debt discount, (B) the net cost under interest
rate contracts (including amortization of discounts), (C) the interest portion
of any deferred payment obligation calculated in accordance with the effective
interest method of accounting and (D) accrued interest, plus (ii) the interest
component of the Capital Lease Obligations paid, accrued and/or scheduled to
be paid, or accrued by such Person
6
during such period, in each case as determined in accordance with GAAP, plus
(iii) Preferred Stock dividends in respect of Preferred Stock of the Issuer or
any Restricted Subsidiary held by Persons other than the Issuer or a Wholly
Owned Restricted Subsidiary. For purposes of clause (c) of the preceding
sentence, dividends shall be deemed to be an amount equal to the actual
dividends paid divided by one minus the applicable actual combined federal,
state, local and foreign income tax rate of the Issuer and its Consolidated
Subsidiaries (expressed as a decimal).
"Consolidated Net Income" of any Person means, for any period, as
applied to any Person, the net income (or loss) of such Person and its
Consolidated Subsidiaries for such period as determined in accordance with
GAAP, adjusted, to the extent included in calculating such net income (loss),
by excluding (without duplication) (i) all extraordinary gains or losses (less
all fees and expenses relating thereto), (ii) the portion of net income of
such Person and its Consolidated Subsidiaries allocable to investments in
Persons other than Consolidated Subsidiaries to the extent that cash dividends
or distributions have not actually been received by such Person or one of its
Consolidated Subsidiaries, (iii) net income (or loss) of any Person combined
with such Person or any of its Consolidated Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(iv) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan, (v) any gains or losses (less all fees and
expenses relating thereto) in respect of dispositions of assets other than in
the ordinary course of business, or (vi) the net income of any Consolidated
Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by that Consolidated Subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulations applicable to that Consolidated Subsidiary.
"Consolidated Net Worth" of any Person means the Consolidated
stockholders' equity (excluding Redeemable Capital Stock or any equity
security convertible into or exchangeable for Indebtedness, the cost of
treasury stock and the principal amount of any promissory notes receivable for
the sale of Capital Stock) of such Person and its Consolidated Subsidiaries,
as set forth on the most recent consolidated balance sheet of such Person and
its Consolidated Subsidiaries (which shall be as of a date not more than 90
days prior to the date of such computation determined in accordance with
GAAP).
"Consolidated Rental Payments" of any Person means, for any period,
the aggregate rental obligations of such Person and its Consolidated
Subsidiaries (not including taxes, insurance, maintenance and similar expenses
that the lessee is obligated to pay under the terms of the relevant leases),
determined on a consolidated basis in conformity with GAAP, payable in respect
of such period under Attributable Debt or leases of real or personal property
not constituting Attributable Debt (net of income from subleases thereof, not
including taxes, insurance, maintenance and similar expenses that the
sublessee is obligated to pay under the terms of such sublease), whether or
not such obligations are reflected as liabilities or commitments on a
consolidated balance sheet of such Person and its Subsidiaries or in the notes
7
thereto, excluding, however, in any event, (i) that portion of Consolidated
Interest Expense of such Person representing payments by such Person or any of
its Consolidated Subsidiaries in respect of Capital Lease Obligations (net of
payments to such Person or any of its Consolidated Subsidiaries under
subleases qualifying as capitalized lease subleases to the extent that such
payments would be deducted in determining Consolidated Interest Expense) and
(ii) the aggregate amount of amortization of obligations of such Person and
its Consolidated Subsidiaries in respect of such Capital Lease Obligations for
such period (net of payments to such Person or any of its Consolidated
Subsidiaries and subleases qualifying as capitalized lease subleases to the
extent that such payments would be deducted in determining such amortization
amount).
"Consolidation" means, (i) with respect to the Issuer, the
consolidation of the accounts of the Issuer and each of its Restricted
Subsidiaries and (ii) with respect to any other Person, the consolidation of
the accounts of such Person and each of its Subsidiaries, in each case if and
to the extent the accounts of such Person and such Subsidiaries would normally
be consolidated with those of such Person, all in accordance with GAAP. The
term "Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 1600 Market Street, Philadelphia, PA 19103, Attention: Sheila
Wallbridge.
"Credit Facility" means (i) any and all credit agreements (whether of
the Issuer or any Subsidiary of the Issuer) contemplated by the Amended and
Restated Commitment Letter dated as of June 14, 1997 between the Issuer and
Mellon Bank, N.A., Citicorp Securities, Inc., Citibank, N.A., First Union
Capital Markets Corp., First Union National Bank and NationsBank, N.A. as the
same may be amended, restated, renewed, extended, restructured, supplemented
or otherwise modified from time to time; (ii) any agreements, instruments and
documents executed or delivered pursuant to or in connection with such credit
agreement; and (iii) any credit agreement, loan agreement, note purchase
agreement, indenture or other agreement, document or instrument refinancing,
refunding or otherwise replacing the credit agreement or any other agreement
deemed a Credit Facility under clause (i), (ii) or (iii) hereof, whether or
not with the same agent, trustee, representative, lenders or holders,
regardless of whether the Credit Facility or any portion thereof was
outstanding or in effect at the time of such restatement, renewal, extension,
restructuring, supplement or modification. Without limiting the generality of
the foregoing, the term "Credit Facility" shall include any amendment,
restatement, renewal, extension, restructuring, supplement or modification to
any Credit Facility and all refundings, refinancings and replacements of any
Credit Facility, including any agreement (a) extending the maturity of any
Indebtedness Incurred thereunder or contemplated thereby, (b) adding or
deleting borrowers or guarantors thereunder, provided that the addition of
such borrower or guarantor would not be prohibited by Sections 4.03, 4.07 and
4.09, (c) increasing the amount of Indebtedness Incurred thereunder or
available to be borrowed
8
thereunder, provided such increase is permitted to be Incurred under Section
4.03, or (d) otherwise altering the terms and conditions thereof in a manner
not prohibited by Sections 4.03, 4.05, 4.07 and 4.09. Notwithstanding the
foregoing, with respect to any agreement providing for the refinancing,
refunding or replacement of Indebtedness under the Credit Facility, such
agreement shall be the Credit Facility under the Indenture only if a notice to
that effect is delivered by the Issuer to the Trustee and there shall be at
any time only one instrument that is (together with the related agreements,
instruments and documents) the Credit Facility under the Indenture. No
amendment or modification to the Credit Facility shall be considered a
refinancing, refunding or replacement of Indebtedness under the Credit
Facility for the purpose of requiring notice pursuant to the preceding
sentence.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Cypress" means The Cypress Group L.L.C., together with its
Affiliates or any of their respective successors.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depositary" means The Depository Trust Issuer, its nominees, and
their respective successors.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
under, or in respect of, the Credit Facility and any Interest Rate Contract or
Currency Agreement related to Indebtedness under the Credit Facility and (ii)
any other Senior Indebtedness which, at the time of determination, has an
aggregate principal amount outstanding, together with any commitments to lend
additional amounts, of at least $30,000,000 and is specifically designated in
the instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Escrow Agreement" means the Escrow and Security Agreement made and
entered into as of the Closing Date by and among the Issuer, Genesis and the
Placement Agents in favor of the Trustee for the Holders.
"Escrow Agreement Officers' Certificate" means the Officers'
Certificate as defined in the Escrow Agreement.
"Escrow Agreement Opinion of Counsel" means the Opinion of Counsel as
defined in the Escrow Agreement.
"Event of Default" has the meaning provided in Section 6.01.
9
"Excess Proceeds" has the meaning provided in Section 4.10.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exchange Notes" means any securities of the Issuer containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act and shall not contain terms concerning interest rate
increases) that are issued and exchanged for the Notes pursuant to the
Registration Rights Agreement and this Indenture.
"Exchange Offer" means the exchange offer by the Issuer of Exchange
Notes for the Notes pursuant to the terms of the Registration Rights
Agreement.
"Existing Stockholders" means Genesis, The Cypress Group L.L.C. and
TPG Partners II, L.P. and their Affiliates.
"Expiration Date" means October 31, 1997, subject to an extension of
up to one month at the Issuer's option.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy as determined in good faith by the
Board of Directors, whose determination shall be conclusive if evidenced by a
Board Resolution.
"Fixed Charge Coverage Ratio" of any Person means, for any period,
the ratio of (i) the sum of Consolidated EBITDA plus one-third of Consolidated
Rental Payments, in each case for such period, of the Issuer and its
Consolidated Subsidiaries, as determined in accordance with GAAP to (ii) the
sum of Consolidated Interest Expense and one-third of Consolidated Rental
Payments, in each case, for such period of the Issuer and its Consolidated
Subsidiaries; provided that in making such computation, the Consolidated
Interest Expense attributable to interest on any Indebtedness computed on a
pro forma basis and bearing a floating interest rate shall be computed as if
the rate in effect on the date of computation had been the applicable rate for
the entire period.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, as
in effect on the Closing Date. All ratios and computations contained or
referred to in this Indenture shall be computed in conformity with GAAP
applied on a consistent basis, except that computations made for purposes of
determining compliance with the terms of the covenants and with other
provisions of this Indenture shall be made without giving effect to (i) the
amortization of any expenses incurred in connection with the offering of the
Notes, the Tender Offer or the Merger and
10
(ii) except as otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17.
"Genesis" means Genesis Health Ventures, Inc.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) 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 agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm's-length
and are entered into in the ordinary course of business), to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) 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 that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make
payment of such Indebtedness or to assure the holder of such Indebtedness
against loss, (iii) to supply funds to, or in any other manner invest in, the
debtor (including any agreement to pay for property or services without
requiring that such property be received or such services be rendered), (iv)
to maintain working capital or equity capital of the debtor, or otherwise to
maintain the net worth, solvency or other financial condition of the debtor or
(v) otherwise to assure a creditor against loss; provided that the term
"Guaranteed Debt" shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Guaranty Documents" means the Supplemental Indenture and the opinion
of counsel substantially in the form of Exhibit B-2 to the Escrow Agreement.
"Healthcare Related Business" means a business, the majority of whose
revenues result from healthcare, long-term care, or managed care related
businesses or facilities, including businesses which provide insurance
relating to the costs of healthcare, long-term care or managed care services.
11
"Holder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) all
obligations for the payment of money of such Person for the deferred purchase
price of property or services, excluding any trade payables and other accrued
current liabilities arising in the ordinary course of business, but including,
without limitation, all obligations, contingent or otherwise, of such Person
in connection with any letters of credit or acceptances issued under letter of
credit facilities, acceptance facilities or other similar facilities and in
connection with any agreement to purchase, redeem, exchange, convert or
otherwise acquire for value any Capital Stock of such Person, or any warrants,
rights or options to acquire such Capital Stock, now or hereafter outstanding,
(iii) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (iv) all obligations under Interest Rate Contracts
and Currency Agreements of such Person, (v) all Capital Lease Obligations of
such Person, (vi) all Indebtedness of other Persons the payment of which is
secured by a Lien, upon any property (including, without limitation, accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; provided that
the amount of such Indebtedness shall be the lesser of (A) the fair market
value of such asset at such date of determination and (B) the amount of such
Indebtedness, (vii) all Guaranteed debt of such Person, (viii) all Redeemable
Capital Stock valued at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued and unpaid dividends, and (ix) all
Attributable Debt of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations,
the maximum liability upon the occurrence of the contingency giving rise to
the obligation, provided (A) that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at the time of its issuance as determined in
conformity with GAAP, (B) that money borrowed and set aside at the time of the
Incurrence of any Indebtedness in order to prefund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness" and (C) that
Indebtedness shall not include any liability for federal, state, local or
other taxes. For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such
price is
12
based upon, or measured by, the Fair Market Value of such Redeemable Capital
Stock, such Fair Market Value to be determined in good faith by the Board of
Directors.
"Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Initial Blockage Period" has the meaning provided in Section 11.03.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date
on February 1 and August 1 of each year, commencing February 1, 1998.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other similar agreements or arrangements.
"Investment" means, with respect to any Person, directly or
indirectly, any advance, loan or other extension of credit (including, without
limitation, any guarantee or similar arrangement but excluding advances in the
ordinary course of business that are, in conformity with generally accepted
accounting principles, recorded as accounts receivable on the balance sheet of
the Issuer or a Restricted Subsidiary) or capital contribution to (by means of
any transfer of cash or other property (tangible or intangible) to others, or
any payment for property or services for the account or use of others or
otherwise), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities (including,
without limitation, any interests in any partnership or joint venture) issued
or owned by any other Person and shall include (i) the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary and (ii) the issuance or
sale of Capital Stock of a Restricted Subsidiary if immediately after giving
effect thereto such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and the Issuer or another Restricted Subsidiary would
have an Investment in such Restricted Subsidiary after giving effect to such
issuance or sale. For purposes of the definition of "Unrestricted Subsidiary"
and Section 4.04, (i) "Investment" shall include the fair market value of the
assets (net of liabilities (other than liabilities to the Issuer or any of its
Restricted Subsidiaries)) of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair
market value of the assets (net of liabilities (other than liabilities to the
Issuer or any of its Restricted Subsidiaries)) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary shall be considered a reduction in outstanding Investments and
(iii) "Investment" shall include the fair market value of the Capital Stock
(or any other remaining Investment), held by the Issuer or any of its
Restricted Subsidiaries, of (or in) any Person that has ceased to be a
Restricted Subsidiary; provided that
13
the fair market value of the Investment in an Unrestricted Subsidiary or any
other Person that has ceased to be a Restricted Subsidiary shall not exceed
the aggregate amount of Investments previously made in such Person valued at
the time such Investments were made less the net reduction of such
Investments.
"Issuer" means Genesis ElderCare Acquisition Corp. and, following the
Merger, Multicare until a successor replaces it pursuant to Article Five and
thereafter means the successor.
"Issuer Order" means a written request or order signed in the name of
the Issuer (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary and delivered to the Trustee; provided, however, that
such written request or order may be signed by any two of the officers or
directors listed in clause (i) above in lieu of being signed by one of such
officers or directors listed in such clause (i) and one of the officers listed
in clause (ii) above.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Merger" means the merger of Genesis ElderCare Acquisition Corp. with
and into Multicare which shall be the surviving corporation in the merger.
"Merger Closing Date" means the date the Merger is consummated.
"Multicare" means The Multicare Companies, Inc.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or Cash Equivalents including
payments in respect of deferred payment obligations when received in the form
of, or stock or other assets when disposed for, cash or Cash Equivalents
(except to the extent that such obligations are financed or sold with recourse
to the Issuer or any Restricted Subsidiary) net of (i) brokerage commissions
and other reasonable fees and expenses (including fees and expenses of counsel
and investment bankers) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness either (A) is secured by the
assets or properties sold or (B) is required to be paid as a result of such
Asset Sale, (iv) amounts required to be paid to any Person (other than the
Issuer or any Subsidiary of the Issuer) owning a beneficial interest in the
assets subject to the Asset Sale and (v) appropriate amounts to be provided by
the Issuer or any Restricted Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Issuer or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other
14
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officers' Certificate delivered to the
Trustee and (b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or Cash Equivalents,
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed for, cash or Cash
Equivalents (except to the extent such obligations are financed or sold with
recourse to the Issuer or any Restricted Subsidiary), net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection
with such issuance or sale and net of taxes paid or payable as a result
thereof.
"Non-payment Default" means any default or event of default under or
in respect of any Designated Senior Indebtedness, other than a Payment
Default.
"Non-U.S. Person" means a person who is not a "U.S. person" (as
defined in Regulation S).
"Notes" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Notes" shall
include the Notes initially issued on the Closing Date, any Exchange Notes to
be issued and exchanged for any Notes pursuant to the Registration Rights
Agreement and this Indenture and any other Notes issued after the Closing Date
under this Indenture. For purposes of this Indenture, all Notes shall vote
together as one series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Issuer
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such notice
is mailed) (the "Payment Date"); (iii) that any Note not tendered will
continue to accrue interest pursuant to its terms; (iv) that, unless the
Issuer defaults in the payment of the purchase price, any Note accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest on
and after the Payment Date; (v) that Holders electing to have a Note purchased
pursuant to the Offer to Purchase will be required to surrender the Note,
together with the form entitled "Option of the Holder to Elect Purchase" on
the reverse side of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date; (vi) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the third Business Day immediately preceding the Payment Date,
a telegram, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Notes delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(vii)
15
that Holders whose Notes are being purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall
be in a principal amount of $1,000 or integral multiples thereof. On the
Payment Date, the Issuer shall (i) accept for payment on a pro rata basis
Notes or portions thereof tendered pursuant to an Offer to Purchase; (ii)
deposit with the Paying Agent money sufficient to pay the purchase price of
all Notes or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes or portions thereof
accepted for payment by the Issuer. The Paying Agent shall promptly mail to
the Holders of Notes so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate and mail to such Holders a
new Note equal in principal amount to any unpurchased portion of the Note
surrendered; provided that each Note purchased and each new Note issued shall
be in a principal amount of $1,000 or integral multiples thereof. The Issuer
will publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The Trustee shall act as the paying agent
for an Offer to Purchase. The Issuer will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable, in the event that the Issuer
is required to repurchase Notes pursuant to an Offer to Purchase.
"Officer" means, with respect to the Issuer, (i) the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or the
Chief Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or
the Secretary or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in
clause (ii) of the definition thereof or two officers listed in clause (i) of
the definition thereof. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"Offshore Global Note" has the meaning provided in Section 2.01.
"Offshore Notes Exchange Date" has the meaning provided in Section
2.01.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Issuer, that meets the
requirements of Section 12.04 hereof. Each such Opinion of Counsel shall
include the statements provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Issuer or
a Subsidiary of the Issuer or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
16
"Payment Blockage Period" has the meaning provided in Section 11.03.
"Payment Default" means any default in the payment when due (at
maturity, upon acceleration of maturity, upon mandatory prepayment or
otherwise) of any amount owing under or in respect of any Designated Senior
Indebtedness.
"Permanent Offshore Global Notes" has the meaning provided in Section
2.01.
"Permitted Indebtedness" means:
(a) Indebtedness outstanding at any time in an aggregate
principal amount not to exceed $625 million, less any amount of such
Indebtedness permanently repaid as provided under Section 4.10;
(b) Indebtedness of Multicare in existence on the Merger
Closing Date; provided that upon consummation of the Merger not more
than $40 million of such Indebtedness shall remain outstanding;
(c) Indebtedness of the Issuer pursuant to the Notes;
(d) Indebtedness evidenced by letters of credit issued in
the ordinary course of business consistent with past practice to
support the Issuer's or any Subsidiary's insurance or self-insurance
obligations (including to secure workers' compensation and other
similar insurance coverages) to the extent such letters of credit are
not drawn upon or, if drawn upon, to the extent such drawing is
reimbursed no later than the third Business Day following a demand
for reimbursement;
(e) Interest Rate Contracts and Currency Agreements to the
extent that the notional principal amount of such obligations under
Interest Rate Contracts does not exceed the amount of Indebtedness
outstanding or committed to be incurred on the date such Interest
Rate Contracts are entered into;
(f) Indebtedness owed (A) to the Issuer evidenced by an
unsubordinated promissory note or (B) to any Restricted Subsidiary;
provided, however, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Issuer or
a Restricted Subsidiary) shall be deemed, in each case to be an
Incurrence of such Indebtedness not permitted by this clause (f);
(g) any guarantees of Indebtedness by a Restricted Subsidiary
entered into in accordance with Section 4.07;
17
(h) Indebtedness incurred by the Issuer or any Restricted
Subsidiary, and any renewals, extensions, substitutions, refundings,
refinancings or replacements thereof, in an amount not to exceed $20
million at any one time outstanding to finance the acquisition or
construction of any property or assets or any business, including
Acquired Indebtedness and Indebtedness incurred within 90 days after
such acquisition or construction, less any amount of such
Indebtedness permanently repaid as provided under Section 4.10;
(i) Capital Lease Obligations, and any renewals, extensions,
substitutions, refundings, refinancings or replacements thereof, in
an amount not to exceed $10 million at any time outstanding, less any
amount of such Indebtedness permanently repaid as provided under
Section 4.10;
(j) Indebtedness in addition to that described in clauses
(a) through (i) of this definition of "Permitted Indebtedness," in an
aggregate principal amount outstanding at any time not to exceed $20
million, less any amount of such Indebtedness permanently repaid as
provided under Section 4.10; and
(k) any renewals, extensions, substitutions, refundings,
refinancings or replacements of any Indebtedness (other than
Indebtedness Incurred under clause (a), (d), (e), (f), (g), (h), (i)
or (j) of this definition of "Permitted Indebtedness"), including any
successive renewals, extensions, substitutions, refundings,
refinancings or replacements, so long as (i) any such new
Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides
for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof, such lesser
amount as of the date of determination) so refinanced, plus the
amount of any premium required to be paid under the terms of the
instrument governing such Indebtedness being refinanced or the amount
of any premium reasonably determined by the Issuer as necessary to
accomplish such refinancing through means of a tender offer or
privately negotiated transactions and, in each case, actually paid,
plus the amount of expenses of the Issuer incurred in connection with
such refinancing; (ii) in case the Notes are refinanced in part or
the Indebtedness to be refinanced is pari passu with the Notes, such
new Indebtedness is expressly made pari passu with, or subordinate in
right of payment to, the remaining Notes; (iii) in the case of any
refinancing of Subordinated Indebtedness, such new Indebtedness is
made subordinate in right of payment to the Notes at least to the
same extent as the Indebtedness being refinanced; and (iv) such new
Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of
such new Indebtedness is at least equal to the remaining Average Life
of the Indebtedness to be refinanced or refunded; provided that in no
event may Indebtedness of the Issuer be refinanced by means of any
Indebtedness of any Restricted Subsidiary pursuant to this clause
(k).
18
For purposes of determining any particular amount of Indebtedness under
Section 4.03, (1) Indebtedness Incurred under the Credit Facility on or prior
to the Merger Closing Date shall be treated as Incurred pursuant to clause (a)
of this "Permitted Indebtedness" definition, (2) Guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness
otherwise included in the determination of such particular amount shall not be
included and (3) any Liens granted pursuant to the equal and ratable
provisions referred to in Section 4.09 shall not be treated as Indebtedness.
For purposes of determining compliance with Section 4.03, in the event that an
item of Indebtedness meets the criteria of more than one of the types of
Indebtedness described in this "Permitted Indebtedness" definition (other than
Indebtedness referred to in clause (1) of the preceding sentence), the Issuer,
in its sole discretion, shall classify such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in one of such
clauses.
(l) Notwithstanding the foregoing, for so long as the Credit Facility
is outstanding, Indebtedness Incurred under clause (a) above shall consist of
(i) $525 million of Indebtedness incurred under the Credit Facility (less any
amount referred to in clause (iii)), (ii) $100 million of Indebtedness
(whether or not incurred under the Credit Facility) and (iii) additional
Indebtedness equal to the amount by which, after giving effect to any
amendment, restatement, renewal, extension, restructuring, supplement or other
modification of the Credit Facility, the principal amounts outstanding and the
commitments under the Credit Facility have been permanently reduced (which may
include subsequent increases in the Credit Facility) less, without
duplication, in the case of Indebtedness described in clauses (i), (ii) or
(iii), any amount of such Indebtedness permanently repaid as provided under
ss.4.10.
"Permitted Investment" means (i) Investments in the Issuer or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with
or into or transfer or convey all or substantially all its assets to the
Issuer or a Restricted Subsidiary; provided that such Person's primary
businesses are Healthcare Related Businesses; (ii) Temporary Cash Investments;
(iii) payroll, travel and similar advances to cover matters that are expected
at the time of such advances ultimately to be treated as expenses in
accordance with GAAP; and (iv) Investments in existence on the Closing Date
(including Investments held by Multicare and its Subsidiaries).
"Permitted Junior Notes" has the meaning provided in Section 11.02.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pharmacy Sale" means the sale of Multicare's pharmacy business to
Genesis or any of its Affiliates in connection with the Merger.
19
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock," as applied to any Person, means Capital Stock of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
"principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on
the Notes in the form set forth in Section 2.02.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" of any Person means any Capital Stock of
such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Notes, (ii) redeemable at the option of
the holder of such class or series of Capital Stock at any time prior to the
Stated Maturity of the Notes or (iii) convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or Indebtedness having a
scheduled maturity prior to the Stated Maturity of the Notes; provided that
any Capital Stock that would not constitute Redeemable Capital Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change in control" occurring prior to the Stated Maturity of the Notes
shall not constitute Disqualified Stock if the "asset sale" or "change in
control" provisions applicable to such Capital Stock are no more favorable to
the holders of such Capital Stock than the provisions contained in Sections
4.10 and 4.11 and such Capital Stock specifically provides that such Person
will not repurchase or redeem any such stock pursuant to such provision prior
to the Issuer's repurchase of such Notes as are required to be repurchased
pursuant to Sections 4.10 and 4.11.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.04.
20
"Registration" has the meaning provided in Section 4.19.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the Closing Date among the Issuer and the Placement Agents.
"Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the January 15 or July 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice chairman of the board of directors, the chairman or
any vice chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
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 or any assistant
controller or any other officer of the Trustee in its Corporate Trust
Department customarily performing functions similar to those performed by any
of the above-designated officers and in each case having direct responsibility
for the administration of this Indenture or the Escrow Agreement and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Issuer other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933.
"Security Register" has the meaning provided in Section 2.04.
"Senior Indebtedness" means the following obligations, whether
outstanding on the Closing Date or thereafter Incurred: (a) all Indebtedness
and other monetary obligations of the Issuer or any Subsidiary of the Issuer
under or in respect of the Credit Facility (including obligations in respect
of any lease financing facility of the Credit Facility) or any Interest Rate
Contract or Currency Agreement related to Indebtedness under the Credit
Facility, whether for
21
principal, interest (including interest accruing after the filing of a
petition by or against the Issuer or any Subsidiary of the Issuer under any
state or federal Bankruptcy Laws, whether or not such interest is allowed as a
claim after such filing in any proceeding under such law), fees, expenses,
indemnification or otherwise, and (b) the principal of, premium, if any, and
interest on all other Indebtedness of the Issuer (other than the Notes)
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall be pari passu with or subordinated in
right of payment to the Notes. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (i) Indebtedness that is by its terms
subordinate in right of payment to any Indebtedness of the Issuer, (ii)
Indebtedness which when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Law is without recourse to the Issuer, (iii)
any repurchase, redemption or other obligation in respect of Redeemable
Capital Stock, (iv) Indebtedness for goods, materials or services purchased in
the ordinary course of business or indebtedness consisting of trade payables
or other current liabilities, (v) Indebtedness of or amounts owed by the
Issuer to employees, officers, or directors, (vi) any liability for federal,
state, local or other taxes owed or owing by the Issuer, (vii) Indebtedness of
the Issuer to a Subsidiary of the Issuer or any other Affiliate of the Issuer
or any of such Affiliate's subsidiaries, (viii) that portion of any
Indebtedness which at the time of issuance is issued in violation of the
Indenture and (ix) amounts owing under leases (other than Capital Lease
Obligations).
"Senior Representative" has the meaning provided in Section 11.01.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined and described in the Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Issuer, accounted for more than 10% of the
consolidated revenues of the Issuer and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Issuer and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Issuer for such fiscal year.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Issuer
subordinated in right of payment to the Notes.
22
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting
power of the outstanding Voting Stock is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.07.
"Supplemental Indenture" means the indenture supplemental hereto
substantially in the form of Exhibit E to this Indenture.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and
guaranteed fully as to principal, premium, if any, and interest by the United
States of America, (ii) any certificate of deposit and money market deposit,
maturing not more than one year after the date of acquisition, issued by, or
time deposit of, a commercial banking institution that is a member of the
Federal Reserve System and that has combined capital and surplus and undivided
profits of not less than $500,000,000, whose debt has a rating, at the time as
of which any investment therein is made, of "P-1" (or higher) according to
Moody's Investors Service, Inc. or any successor rating agency, or "A-1" (or
higher) according to Standard & Poor's Ratings Services or any successor
rating agency or any money market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) commercial paper, maturing not more than one
year after the date of acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of the Issuer) organized and existing under the laws
of the United States of America with a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard & Poor's Ratings Services or any successor rating agency
and (iv) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings Services or Moody's Investors Service, Inc.
"Temporary Offshore Global Notes" has the meaning provided in Section
2.01.
"Tender Offer" means the offer to purchase all of the issued and
outstanding shares of Common Stock of Multicare made by Genesis ElderCare
Acquisition Corp.
"Therapy Sale" means the sale of Multicare's contract therapy
business to Genesis or any of its Affiliates in connection with the Merger.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
23
"TPG" means TPG Partners II, L.P., together with its Affiliates, and
any of their respective successors.
"Transactions" means, collectively, the Tender Offer, the Merger, the
offering of the Notes issued hereunder, the management agreement to be entered
into by Genesis in connection with the Merger, the Therapy Sale and the
Pharmacy Sale.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of Article Seven of this Indenture and thereafter means such successor.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Issuer that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors may designate any
Restricted Subsidiary (including any newly acquired or newly formed Subsidiary
of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary owns
any Capital Stock of, or owns or holds any Lien on any property of, the Issuer
or any Restricted Subsidiary; provided that (A) any guarantee by the Issuer or
any Restricted Subsidiary of any Indebtedness of the Subsidiary being so
designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by the Issuer or such Restricted Subsidiary (or both, if
applicable) at the time of such designation; (B) either (I) the Subsidiary to
be so designated has total assets of $1,000 or less or (II) if such Subsidiary
has assets greater than $1,000, such designation would be permitted under
Section 4.04 and (C) if applicable, the Incurrence of Indebtedness and the
Investment referred to in clause (A) of this proviso would be permitted under
Sections 4.03 and 4.04. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that (i) no Default or
Event of Default shall have occurred and be continuing at the time of or after
giving effect to such designation and (ii) all Liens and Indebtedness of such
Unrestricted Subsidiary outstanding immediately after such designation would,
if Incurred at such time, have been permitted to be Incurred (and shall be
deemed to have been Incurred) for all purposes of this Indenture. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Global Notes" has the meaning provided in Section 2.01.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof at any time
prior to the
24
Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; 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 depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Government Securities" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America (x) the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America or (y) that are
rated at least "Aaa" (or the then equivalent grade) by Moody's Investors
Service, Inc. or "AAA" (or the then equivalent grade) by Standard & Poor's
Ratings Services.
"Voting Stock" means stock of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees
of a corporation (irrespective of whether or not at the time stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary
all the Capital Stock of which is owned by the Issuer or another Wholly Owned
Restricted Subsidiary.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
25
"obligor" on the indenture securities means the Issuer
or any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in
the plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(vii) all ratios and computations based on GAAP contained in
this Indenture shall be computed in accordance with the definition of
GAAP set forth in Section 1.01; and
(viii) all references to Sections or Articles refer to
Sections or Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's
certificate of authentication shall be substantially in the form annexed
hereto as Exhibit A with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
agreements to which the Issuer is subject or usage. The Issuer shall approve
the form of the Notes and any notation, legend or endorsement on the Notes.
Each Note shall be dated the date of its authentication.
26
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Issuer and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered
form, substantially in the form set forth in Exhibit A (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited
with the Trustee, as custodian for the Depositary, duly executed by the Issuer
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the U.S. Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian
for the Depositary or its nominee, in accordance with the instructions given
by the Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Notes in registered form substantially in the form set forth in Exhibit
A (the "Temporary Offshore Global Notes"), registered in the name of the
nominee of the Depositary, deposited with the Trustee, as custodian for the
Depositary, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided. At any time following September 22, 1997 (the "Offshore
Notes Exchange Date"), upon receipt by the Trustee and the Issuer of a
certificate substantially in the form of Exhibit B hereto, one or more
permanent global Notes in registered form substantially in the form set forth
in Exhibit A (the "Permanent Offshore Global Notes"; and together with the
Temporary Offshore Global Notes, the "Offshore Global Notes") duly executed by
the Issuer and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for the Depositary, and the Registrar
shall reflect on its books and records the date and a decrease in the
principal amount of the Temporary Offshore Global Notes in an amount equal to
the principal amount of the beneficial interest in the Temporary Offshore
Global Notes transferred.
Notes offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "U.S.
Physical Notes"). Notes issued pursuant to Section 2.07 in exchange for
interests in the Offshore Global Notes shall be in the form of permanent
certificated Notes in registered form substantially in the form set forth in
Exhibit A (the "Offshore Physical Notes").
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes." The U.S. Global Notes
and the Offshore Global Notes are sometimes referred to herein as the "Global
Notes."
The definitive Notes shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the
27
rules of any securities exchange on which the Notes may be listed, all as
determined by the Officers executing such Notes, as evidenced by their
execution of such Notes.
SECTION 2.02. Restrictive Legends. Unless and until a Note is exchanged
for an Exchange Note in connection with an effective Registration Statement
pursuant to the Registration Rights Agreement, the U.S. Global Notes, Temporary
Offshore Global Notes and each U.S. Physical Note shall bear the following
legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THE NOTES, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT
OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN $100,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE NOTES, THE HOLDER
28
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE
TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange 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, 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 TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 SECTION 2.08 OF THE INDENTURE.
29
SECTION 2.03. Execution, Authentication and Denominations. Subject to
Article Four, the aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is unlimited. The Notes shall
be executed by two Officers of the Issuer. The signature of these Officers on
the Notes may be by facsimile or manual signature in the name and on behalf of
the Issuer.
If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee or authenticating agent authenticates the Note,
the Note shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Issuer Order authenticate for original issue Notes in the aggregate principal
amount specified in such Issuer Order; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Issuer in connection with such authentication of Notes. Such Issuer Order
shall specify the amount of Notes to be authenticated and the date on which
the original issue of Notes is to be authenticated and in case of an issuance
of Notes pursuant to Section 2.15, shall certify that such issuance is in
compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may
do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such authenticating agent. An authenticating agent
has the same rights as an Agent to deal with the Issuer or an Affiliate of the
Issuer. The Trustee shall not be liable for the misconduct or negligence of
any authenticating agent appointed with due care.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 in principal amount and any integral
multiple of $1,000 in excess thereof.
SECTION 2.04. Registrar and Paying Agent. The Issuer shall maintain
an office or agency where Notes may be presented for registration of transfer
or for exchange (the "Registrar"), an office or agency where Notes may be
presented for payment (the "Paying Agent") and an office or agency where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served, which shall be in the Borough of Manhattan, The City
of New York or at the principal Corporate Trust Office of the Trustee. The
Issuer shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Security Register"). The Issuer may have one or
more co-Registrars and one or more additional Paying Agents.
30
The Issuer shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuer shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Issuer fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Issuer may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become
effective until (i) the acceptance of an appointment by a successor Agent to
such Agent as evidenced by an appropriate agency agreement entered into by the
Issuer and such successor Agent and delivered to the Trustee or (ii)
notification to the Trustee that the Trustee shall serve as such Agent until
the appointment of a successor Agent in accordance with clause (i) of this
proviso. The Issuer, any Subsidiary of the Issuer, or any Affiliate of any of
them may act as Paying Agent, Registrar or co-Registrar, and/or agent for
service of notice and demands.
The Issuer initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands and Banque
Internationale a Luxembourg S.A., as Paying Agent. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders and shall otherwise
comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Issuer
shall furnish to the Trustee as of each Regular Record Date and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Holders, including the aggregate principal amount of Notes held by each
Holder.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than
11:00 a.m. (New York City time) on each due date of the principal, premium, if
any, and interest on any Notes, the Issuer shall deposit with the Paying Agent
money in immediately available funds sufficient to pay such principal,
premium, if any, and interest so becoming due. The Issuer shall require each
Paying Agent other than the Trustee to agree in writing that such Paying Agent
shall hold in trust for the benefit of the Holders or the Trustee all money
held by the Paying Agent for the payment of principal of, premium, if any, and
interest on the Notes (whether such money has been paid to it by the Issuer or
any other obligor on the Notes), and such Paying Agent shall promptly notify
the Trustee of any default by the Issuer (or any other obligor on the Notes)
in making any such payment. The Issuer at any time may require a Paying Agent
to pay all money held by it to the Trustee and account for any funds
disbursed, and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. Upon doing so, the Paying Agent shall have no further liability for
the money so paid over to the Trustee. If the Issuer or any Subsidiary of the
Issuer or any Affiliate of any of them acts as Paying Agent, it will, on or
before each due date of any principal of, premium, if any, or interest on the
Notes, segregate and hold in a separate trust fund for the benefit of the
Holders a sum of money sufficient to pay such principal, premium, if any, or
interest so
31
becoming due until such sum of money shall be paid to such Holders or
otherwise disposed of as provided in this Indenture, and will promptly notify
the Trustee of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only in
registered form. A Holder may transfer a Note only by written application to
the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Registrar in the
Security Register. Prior to the registration of any transfer by a Holder as
provided herein, the Issuer, the Trustee, and any agent of the Issuer shall
treat the person in whose name the Note is registered as the owner thereof for
all purposes whether or not the Note shall be overdue, and neither the Issuer,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent) and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry. When Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations (including an exchange of Notes for Exchange Notes),
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met (including that such Notes are
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof
or by an attorney who is authorized in writing to act on behalf of the
Holder); provided that no exchanges of Notes for Exchange Notes shall occur
until a Registration Statement shall have been declared effective by the
Commission and that any Notes that are exchanged for Exchange Notes shall be
cancelled by the Trustee. To permit registrations of transfers and exchanges,
the Issuer shall execute and the Trustee shall authenticate Notes at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange or redemption of the Notes, but the Issuer may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of 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 of
Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The U.S.
Global Notes and Offshore Global Notes initially shall (i) be registered in the
name of the Depositary for such
32
Global Notes or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set forth
in Section 2.02.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depositary, or the Trustee as its custodian, or under
the Global Note, and the Depositary may be treated by the Issuer, the Trustee
and any agent of the Issuer or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuer, the Trustee or any agent of the
Issuer or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Note. Neither the
Issuer nor the Trustee shall be liable for any delay by the Depositary in
identifying the beneficial owners of the Notes and the Issuer and the Trustee
may conclusively rely on, and shall be protected in relying on, instructions
from the Depositary for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of any Notes
to be issued).
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 2.08. In addition, U.S. Physical Notes and
Offshore Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in the U.S. Global Notes or the
Offshore Global Notes, respectively, if (i) the Depositary notifies the Issuer
that it is unwilling or unable to continue as Depositary for the U.S. Global
Notes or the Offshore Global Notes, as the case may be, and a successor
depositary is not appointed by the Issuer within 90 days of such notice, (ii)
an Event of Default has occurred and is continuing and the Registrar has
received a request from the Depositary or (iii) in accordance with the rules
and procedures of the Depositary and the provisions of Section 2.08.
(c) 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 the
other Global Note will, upon transfer, cease to be an interest in such Global
Note 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.
(d) In connection with any transfer of a portion of the beneficial
interests in the U.S. Global Notes to beneficial owners pursuant to paragraph
(b) of this Section 2.07, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S. Global Notes in an
amount equal to the principal amount of the beneficial interest in the
33
U.S. Global Notes to be transferred, and the Issuer shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical Notes of like
tenor and amount.
(e) In connection with the transfer of the entire U.S. Global Note or
Offshore Global Note to beneficial owners pursuant to paragraph (b) of this
Section 2.07, the U.S. Global Note or Offshore Global Note, as the case may
be, shall be deemed to be surrendered to the Trustee for cancellation, and the
Issuer 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 U.S. Global Note or Offshore Global Note, as the case may be,
an equal aggregate principal amount of U.S. Physical Notes or Offshore
Physical Notes, as the case may be, of authorized denominations.
(f) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) or (d) of this Section 2.07
shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the U.S. Physical Note
set forth in Section 2.02.
(g) Any Offshore Physical Note delivered in exchange for an interest
in the Offshore Global Note pursuant to paragraph (b) of this Section 2.07
shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the Offshore Physical
Note set forth in Section 2.02.
(h) 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 which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note,
whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after the time period referred to in Rule
144(k) under the Securities Act or (y) the proposed transferee has
delivered to the Registrar (A) a certificate substantially in the
form of Exhibit C hereto and (B) if the aggregate principal amount of
the Notes being transferred is less than $100,000, an opinion of
counsel acceptable to the Issuer that such transfer is in compliance
with the Securities Act.
34
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and
(y) instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the U.S.
Global Note in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Note to be transferred, and
the Issuer shall execute, and the Trustee shall authenticate and
deliver, one or more U.S. Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical Note
or an interest in the U.S. Global Note to a QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) U.S.
Physical Notes, the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the
box provided for on the form of Note stating, or has otherwise
advised the Issuer and the Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form
of Note stating, or has otherwise advised the Issuer and the
Registrar in writing, that it is purchasing the Note for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB
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 Issuer 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 or (y) an interest in the U.S.
Global Note, the transfer of such interest may be effected only
through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Note to be transferred consists of U.S. Physical Notes, upon receipt
by the Registrar of the documents referred to in clause (i) and
instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the U.S.
Global Note in an amount equal to the principal amount of the U.S.
Physical Notes to be transferred, and the Trustee shall cancel the
U.S. Physical Note so transferred.
(c) Transfers of Interests in the Temporary Offshore Global Note. The
following provisions shall apply with respect to registration of any proposed
transfer of interests in the Temporary Offshore Global Note:
35
(i) The Registrar shall register the transfer of any Note
(x) if the proposed transferee is a Non-U.S. Person and the proposed
transferor has delivered to the Registrar a certificate substantially
in the form of Exhibit D hereto or (y) if the proposed transferee is
a QIB and the proposed transferor has checked the box provided for on
the form of Note stating, or has otherwise advised the Issuer and the
Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has
otherwise advised the Issuer and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any
such account is a QIB 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
Issuer 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.
(ii) If the proposed transferee is an Agent Member, upon
receipt by the Registrar of the documents referred to in clause
(i)(y) above and instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the U.S. Global Note in an amount equal to the
principal amount of the Temporary Offshore Global Note to be
transferred, and the Trustee shall decrease the amount of the
Temporary Offshore Global Note.
(d) Transfers of Interests in the Permanent Offshore Global Note or
Offshore Physical Notes to U.S. Persons. The following provisions shall apply
with respect to any transfer of interests in the Permanent Offshore Global
Note or Offshore Physical Notes to U.S. Persons: The Registrar shall register
the transfer of any such Note without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) Prior to September 22, 1997, the Registrar shall
register any proposed transfer of a Note to a Non-U.S. Person upon
receipt of a certificate substantially in the form of Exhibit D
hereto from the proposed transferor.
(ii) On and after September 22, 1997, the Registrar shall
register any proposed transfer to any Non-U.S. Person if the Note to
be transferred is a U.S. Physical Note or an interest in the U.S.
Global Note, upon receipt of a certificate substantially in the form
of Exhibit D hereto from the proposed transferor.
36
(iii) (a) If the proposed transferor is an Agent Member
holding a beneficial interest in the U.S. Global Note, upon receipt
by the Registrar of (x) the documents, if any, required by paragraph
(ii) and (y) instructions in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the U.S.
Global Note in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Note to be transferred, and
(b) if the proposed transferee is an Agent Member, upon receipt by
the Registrar of instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the Offshore Global Note in an amount equal to
the principal amount of the U.S. Physical Notes or the U.S. Global
Note, as the case may be, to be transferred, and the Trustee shall
cancel the Physical Note, if any, so transferred or decrease the
amount of the U.S. Global Note.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the 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 Registrar shall deliver only Notes that bear the Private Placement
Legend unless either (i) the circumstances contemplated by the fourth
paragraph of Section 2.01 or paragraph (a)(i)(x) or (e)(ii) of this Section
2.08 exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Issuer 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.
(g) 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 Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees
by its acceptance of the Notes to furnish the Registrar or the Issuer such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Issuer with respect to)
the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Issuer shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
37
SECTION 2.09. Replacement Notes. If a mutilated Note is surrendered
to the Trustee or if the Holder claims that the Note has been lost, destroyed
or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate
a replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding; provided that the requirements of the second
paragraph of Section 2.10 are met. If required by the Trustee or the Issuer,
an indemnity bond must be furnished that is sufficient in the judgment of both
the Trustee and the Issuer to protect the Issuer, the Trustee or any Agent
from any loss that any of them may suffer if a Note is replaced. The Issuer
may charge such Holder for its expenses and the expenses of the Trustee in
replacing a Note. In case any such mutilated, lost, destroyed or wrongfully
taken Note has become or is about to become due and payable, the Issuer in its
discretion may pay such Note instead of issuing a new Note in replacement
thereof.
Every replacement Note is an additional obligation of the Issuer and
shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are
all Notes that have been authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Issuer receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Issuer or an Affiliate of the
Issuer) holds on the maturity date money sufficient to pay Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Issuer or one of
its Affiliates holds such Note, provided, however, that in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Issuer or any other obligor upon the Notes or
any Affiliate of the Issuer or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer
of the Trustee knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Notes and that the pledgee is not the Issuer or
any other obligor upon the Notes or any Affiliate of the Issuer or of such
other obligor.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready for
delivery, the Issuer may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall
38
be substantially in the form of definitive Notes but may have insertions,
substitutions, omissions and other variations determined to be appropriate by
the Officers executing the temporary Notes, as evidenced by their execution of
such temporary Notes. If temporary Notes are issued, the Issuer 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 Issuer designated for such purpose pursuant to Section 4.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes the Issuer shall execute and the 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 be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.12. Cancellation. The Issuer at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Issuer has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee shall cancel all Notes surrendered
for transfer, exchange, payment or cancellation and shall destroy them in
accordance with its normal procedure. Except as expressly permitted by this
Indenture, the Issuer may not issue new Notes to replace Notes it has paid in
full or delivered to the Trustee for cancellation.
SECTION 2.13. CUSIP Numbers. The Issuer in issuing the Notes may use
"CUSIP," "CINS" or "ISIN" numbers (if then generally in use), and the Trustee
shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes. The Issuer will promptly notify
the Trustee of any change in "CUSIP," "CINS" or "ISIN" numbers for the Notes.
SECTION 2.14. Defaulted Interest. If the Issuer defaults in a payment
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date.
A special record date, as used in this Section 2.14 with respect to the
payment of any defaulted interest, shall mean the 15th day next preceding the
date fixed by the Issuer for the payment of defaulted interest, whether or not
such day is a Business Day. At least 15 days before the subsequent special
record date, the Issuer shall mail to each Holder and to the Trustee a notice
that states the subsequent special record date, the payment date and the
amount of defaulted interest to be paid.
39
SECTION 2.15. Issuance of Additional Notes. The Issuer may, subject
to Article Four of this Indenture, issue additional Notes under this
Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption; Mandatory Redemption. (a) The
Notes will be redeemable, at the Issuer's option, in whole or in part, at any
time or from time to time, on or after August 1, 2002 and prior to maturity,
upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's last address, as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of
principal amount), plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
that is prior to the Redemption Date to receive interest due on an Interest
Payment Date), if redeemed during the 12-month period commencing August 1 of
the years set forth below:
Redemption
Year Price
---- ----------
2002........................... 104.500%
2003........................... 102.250
2004 and thereafter............ 100.000
(b) In the event that the Tender Offer is not consummated and certain
other conditions set forth in the Escrow Agreement are not satisfied by the
Expiration Date, or if it appears, in the sole judgment of the Issuer, that
the Tender Offer will not be consummated and such conditions will not be
satisfied by the Expiration Date, the Issuer shall redeem the Notes in whole,
on 10 days' prior notice mailed by first-class mail to each Holder's last
address as it appears in the Security Register, at a Redemption Price equal to
101% of the principal amount of the Notes, plus accrued and unpaid interest to
the Redemption Date. On the earlier of (i) the Expiration Date, if the Trustee
has not received the Escrow Agreement Officers' Certificate stating that the
Tender Offer has been consummated (or will be consummated promptly upon the
release of the escrowed proceeds of the offering of the Notes to the Issuer)
and certain conditions have been satisfied and the Escrow Agreement Opinion of
Counsel, and (ii) such date on which the Trustee receives an officer's
certificate under the Escrow Agreement that the Tender Offer will not be
consummated and such conditions will not be satisfied by the Expiration Date,
the Trustee will mail by first-class mail to each Holder's last address as it
appears in the Security Register a written notice that the Notes will be
redeemed within 10 days of such notice.
40
SECTION 3.02. Notices to Trustee. If the Issuer elects to redeem
Notes pursuant to Section 3.01(a) or (b), it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Notes to be
redeemed.
The Issuer shall give notice provided for in this Section 3.02, (i)
pursuant to an election to redeem Notes under Section 3.01(a), in an Officers'
Certificate at least 45 days before the Redemption Date and (ii) pursuant to
an election to redeem Notes under Section 3.01(b), in an Officers' Certificate
at least 15 days before the Redemption Date (in each case unless a shorter
period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed at any time, the Trustee shall select the Notes
to be redeemed in compliance with the requirements, as certified to it by the
Issuer, of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate; provided that no Notes of $1,000 in principal
amount or less shall be redeemed in part.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption. Notes in denominations of $1,000 in
principal amount may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount or any integral
multiple thereof) of Notes that have denominations larger than $1,000 in
principal amount. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Issuer and the Registrar promptly in writing of the Notes or
portions of Notes to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01(a), at least 30 days but not more than 60 days
before a Redemption Date, the Issuer, and with respect to any redemption of
Notes pursuant to Section 3.01(b), within 10 days before a Redemption Date,
the Trustee, shall mail a notice of redemption by first-class mail to each
Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be
surrendered to the Paying Agent in order to collect the Redemption
Price;
41
(v) that, unless the Issuer defaults in making the
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right
of the Holders is to receive payment of the Redemption Price plus
accrued interest to the Redemption Date upon surrender of the Notes
to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the
portion of the principal amount (equal to $1,000 in principal amount
or any integral multiple thereof) of such Note to be redeemed and
that, on and after the Redemption Date, upon surrender of such Note,
a new Note or Notes in principal amount equal to the unredeemed
portion thereof will be reissued; and
(vii) that, if any Note contains a CUSIP, CINS or ISIN
number as provided in Section 2.13, no representation is being made
as to the correctness of the CUSIP, CINS or ISIN number either as
printed on the Notes or as contained in the notice of redemption and
that reliance may be placed only on the other identification numbers
printed on the Notes.
At the Issuer's request (which request may be revoked by the Issuer
at any time prior to the time at which the Trustee shall have given such
notice to the Holders), made in writing to the Trustee at least 45 days (or
such shorter period as shall be satisfactory to the Trustee) before a
Redemption Date, the Trustee shall give the notice of redemption pursuant to
Section 3.01(a) in the name and at the expense of the Issuer. If, however, the
Issuer gives such notice to the Holders, the Issuer shall concurrently deliver
to the Trustee an Officers' Certificate stating that such notice has been
given. The Trustee shall give the notice of redemption if and as required
pursuant to Section 3.01(b).
SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on
the Redemption Date and at the Redemption Price. Upon surrender of any Notes
to the Paying Agent, such Notes shall be paid at the Redemption Price, plus
accrued interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the
proceedings for the redemption of Notes held by Holders to whom such notice
was properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to any
Redemption Date, the Issuer shall deposit with the Paying Agent (or, if the
Issuer is acting as its own Paying Agent, shall segregate and hold in trust as
provided in Section 2.05) money sufficient to pay the Redemption Price of and
accrued interest on all Notes to be redeemed on that date other than
42
Notes or portions thereof called for redemption on that date that have been
delivered by the Issuer to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion
of Notes specified in such notice to be redeemed shall become due and payable
on the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless
the Issuer shall default in the payment of such Notes at the Redemption Price
and accrued interest to the Redemption Date, in which case the principal,
until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Notes), such Notes shall cease to accrue interest. Upon
surrender of any Note for redemption in accordance with a notice of
redemption, such Note shall be paid and redeemed by the Issuer at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders registered as
such at the close of business on the relevant Regular Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that
is redeemed in part, the Issuer shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note equal in principal amount to
the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Issuer shall pay the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Issuer, a Subsidiary of the Issuer, or
any Affiliate of any of them) holds on that date money designated for and
sufficient to pay the installment. If the Issuer or any Subsidiary of the
Issuer or any Affiliate of any of them acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due
date if the entity acting as Paying Agent complies with the last sentence of
Section 2.05. As provided in Section 6.09, upon any bankruptcy or
reorganization procedure relative to the Issuer, the Trustee shall serve as
the Paying Agent, if any, for the Notes.
The Issuer shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or exchange
or for presentation for payment and where
43
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuer shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 12.02.
The Issuer may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve
the Issuer of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Issuer will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Issuer hereby initially designates the Corporate Trust Office of
the Trustee as such office of the Issuer in accordance with Section 2.04.
SECTION 4.03. Limitation on Indebtedness. The Issuer will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(including any Acquired Indebtedness but excluding Permitted Indebtedness)
unless at the time of such event and after giving effect thereto on a pro
forma basis the Issuer's Fixed Charge Coverage Ratio for the four full fiscal
quarters immediately preceding such event taken as one period, calculated on
the assumption that (i) such Indebtedness, and any Indebtedness Incurred or
repaid after the first day of such four-quarter period and on or prior to the
date of such event (other than Indebtedness Incurred or repaid under a
revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement)
in effect on the last day of such four-quarter period unless any portion of
such Indebtedness is projected, in the reasonable judgment of the senior
management of the Issuer, to remain outstanding for a period in excess of 12
months from the date of the Incurrence thereof) had been Incurred or repaid on
the first day of such four-quarter period and (ii) any acquisition or
disposition by the Issuer and its Restricted Subsidiaries out of the ordinary
course of business of any assets constituting a company, division, line of
business or business facility, in each case after the first day of such
four-quarter period, and on or prior to the date of such event, had been
consummated on the first day of such four-quarter period (including giving pro
forma effect to the application of the proceeds of any such disposition),
would have been at least equal to 2:00:1.00.
SECTION 4.04. Limitation on Restricted Payments. The Issuer will
not, and will not permit any Restricted Subsidiary to, directly or indirectly:
44
(i) declare or pay any dividend on, or make any distribution
to holders of, its Capital Stock (other than (x) dividends or
distributions payable solely in shares of its Qualified Capital Stock
or in options, warrants or other rights to acquire such Qualified
Capital Stock and (y) pro rata dividends or distributions on Common
Stock of Restricted Subsidiaries held by minority stockholders);
(ii) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock (or any option, warrant or other
right to acquire such Capital Stock) of (A) the Issuer or an
Unrestricted Subsidiary held by any Person or (B) a Restricted
Subsidiary held by an Affiliate of the Issuer (other than any Wholly
Owned Restricted Subsidiary) or any holder (or any Affiliate of such
holder) of 5% or more of the Capital Stock of the Issuer;
(iii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, in each case, prior
to any scheduled repayment, or maturity, any Subordinated
Indebtedness; or
(iv) make any Investment in any Person (other than a
Permitted Investment)
(such payments described in (i) through (iv) collectively, "Restricted
Payments"), unless at the time of and after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if other than
cash, as determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution), (x) no Default or Event of
Default shall have occurred and be continuing and such Restricted Payment
shall not be an event which is, or after notice or lapse of time or both,
would be, an "event of default" under the terms of any Indebtedness of the
Issuer or any Restricted Subsidiary; (y) the Issuer could Incur $1.00 of
additional Indebtedness under Section 4.03 (other than Permitted
Indebtedness); and (z) the aggregate amount of all Restricted Payments,
including any Restricted Payments made pursuant to clauses (i) and (iv) of the
succeeding paragraph, declared or made after the Closing Date shall not exceed
the sum of:
(A) 50% of the Consolidated Net Income of the Issuer accrued
on a cumulative basis during the period beginning on the first day of
the fiscal quarter beginning immediately following the Closing Date
and ending on the last day of the fiscal quarter ending prior to the
date of such proposed Restricted Payment for which reports have been
filed with the Commission or provided to the Trustee pursuant to
Section 4.19 (or, if such aggregate cumulative Consolidated Net
Income shall be a loss, minus 100% of the amount of such loss);
(B) the aggregate Net Cash Proceeds received after the
Closing Date by the Issuer as capital contributions to the Issuer;
45
(C) the aggregate Net Cash Proceeds received after the
Closing Date by the Issuer from the issuance and sale (other than to
any of its Subsidiaries) of shares of Qualified Capital Stock of the
Issuer or any options or warrants to purchase such shares (other than
issuances to the extent used to make a Restricted Payment under
clause (ii) of the subsequent paragraph) of Qualified Capital Stock
of the Issuer;
(D) the aggregate Net Cash Proceeds received after the
Closing Date by the Issuer for debt securities that have been
converted into or exchanged for Qualified Capital Stock of the Issuer
to the extent such debt securities were originally sold for cash plus
the aggregate cash received by the Issuer at the time of such
conversion or exchange; and
(E) $10 million.
None of the foregoing provisions shall be deemed to prohibit the
following Restricted Payments so long as in the case of clauses (ii), (iii)
and (iv) at the time of and after giving effect to the proposed Restricted
Payment no Default or Event of Default shall have occurred and be continuing:
(i) dividends paid within 60 days after the date of
declaration if at the date of declaration, such payment would be
permitted by the provisions of the preceding paragraph;
(ii) the redemption, repurchase or other acquisition or
retirement of Capital Stock of the Issuer or Subordinated
Indebtedness in exchange for, or out of the net proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary)
of shares of Qualified Capital Stock of the Issuer;
(iii) the redemption, repurchase, or other acquisition or
retirement of Subordinated Indebtedness of the Issuer, including
premium, if any, and accrued and unpaid interest, made by exchange
for, or out of the proceeds of the substantially concurrent sale of,
Indebtedness of the Issuer permitted to be Incurred under clause (k)
of the definition of "Permitted Indebtedness"; and
(iv) Investments in an aggregate amount not to exceed $25
million in any Person which owns, operates or services Healthcare
Related Businesses.
SECTION 4.05. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Issuer will not, and will not permit
any Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any restriction of any kind, on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distribution on its Capital
Stock to the Issuer or any other Restricted Subsidiary, (ii) pay any
Indebtedness owed
46
to the Issuer or any other Restricted Subsidiary, (iii) make any Investment in
the Issuer or any other Restricted Subsidiary or (iv) transfer any of its
property or assets to the Issuer or any other Restricted Subsidiary, except
(a) any encumbrance or restriction existing under or by reason of applicable
law; (b) any encumbrance or restriction existing under or by reason of
customary non-assignment provisions of any lease governing a leasehold
interest of the Issuer, or any Restricted Subsidiary; (c) any restriction
pursuant to an agreement in effect at or entered into on the Closing Date; (d)
any restriction, with respect to a Restricted Subsidiary that is not a
Subsidiary on the Closing Date, in existence at the time such Person becomes a
Restricted Subsidiary and not incurred in connection with, or in contemplation
of, such Person becoming a Restricted Subsidiary; (e) any restriction existing
under any agreement that extends, renews, refinances or replaces the
agreements containing the restrictions in the foregoing clauses (c) and (d),
provided that the terms and conditions of any such restrictions are not
materially less favorable to the Holders than those under or pursuant to the
agreement so extended, renewed, refinanced or replaced (in the opinion of the
Board of Directors of the Issuer whose determination shall be conclusive); (f)
arising or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of property or assets of the Issuer or any Restricted Subsidiary in
any manner material to the Issuer or any Restricted Subsidiary; (g) with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially all
of the Capital Stock of, or property and assets of, such Restricted
Subsidiary; or (h) contained in the terms of any Indebtedness or any agreement
pursuant to which such Indebtedness was issued if (A) the encumbrance or
restriction applies only in the event of a payment default or a default with
respect to a financial covenant contained in such Indebtedness or agreement,
(B) the encumbrance or restriction is not materially more disadvantageous to
the Holders than is customary in comparable financings (as determined by the
Issuer) and (C) the Issuer determines that any such encumbrance or restriction
will not materially affect the Issuer's ability to make principal or interest
payments on the Notes.
SECTION 4.06. Limitations on Preferred Stock of Restricted
Subsidiaries. The Issuer will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any Preferred Stock of a
Restricted Subsidiary other than to the Issuer or a Wholly Owned Restricted
Subsidiary, or permit any Person (other than the Issuer or a Wholly Owned
Restricted Subsidiary) to own or hold any Preferred Stock of any Restricted
Subsidiary, unless such Restricted Subsidiary would be entitled to Incur
Indebtedness pursuant to Section 4.03 in an aggregate principal amount equal
to the aggregate liquidation value of the Preferred Stock to be issued.
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
Subsidiaries. (a) The Issuer will not permit any Restricted Subsidiary,
directly or indirectly, to assume, guarantee or in any other manner become
liable with respect to any Indebtedness of the Issuer which is expressly by
its terms pari passu with or subordinate in right of payment to the Notes
("Guaranteed Indebtedness") unless (i) such Restricted Subsidiary
simultaneously executes and
47
delivers a supplemental indenture to the Indenture providing for a guarantee
of payment of the Notes by such Restricted Subsidiary and (ii) such Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of any rights of reimbursement, indemnity or subrogation or any
other rights against the Issuer or any other Restricted Subsidiary as a result
of any payment by such Restricted Subsidiary under its Subsidiary Guarantee.
If the Guaranteed Indebtedness is (A) pari passu with the Notes, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinate in right of payment to, the Subsidiary Guarantee or (B)
subordinated to the Notes, then the Guarantee of such Guaranteed Indebtedness
shall be subordinated in right of payment to the Subsidiary Guarantee at least
to the extent that the Guaranteed Indebtedness is subordinated in right of
payment to the Notes.
(b) Each guarantee created pursuant to the provisions described in
the foregoing paragraph is referred to as a "Subsidiary Guarantee," and the
issuer of each such Guarantee is referred to as a "Subsidiary Guarantor."
Notwithstanding the foregoing, any Subsidiary Guarantee may provide by its
terms that it (together with any Liens arising from such Subsidiary Guarantee)
shall be automatically and unconditionally released and discharged upon (i)
any sale, exchange or transfer, to any Person not an Affiliate of the Issuer,
of all of the Issuer's Capital Stock in, or all or substantially all the
assets of, such Subsidiary Guarantor, which is in compliance with this
Indenture or (ii) the release or discharge of the assumption, guarantee or
other liability which resulted in the creation of such Subsidiary Guarantee,
except a release or discharge by or as a result of payment under such
Subsidiary Guarantee.
SECTION 4.08. Limitation on Transactions with Stockholders and
Affiliates. The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, renew or extend any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with
any Affiliate of the Issuer (other than a Wholly Owned Restricted Subsidiary)
unless (i) such transaction or series of related transactions is on terms that
are no less favorable to the Issuer or such Restricted Subsidiary, as the case
may be, than would be available in a comparable transaction in arm's-length
dealings with an unrelated third party and (ii) with respect to a transaction
or series of related transactions involving payments in excess of $10 million
in the aggregate, the Issuer delivers an Officers' Certificate to the Trustee
certifying that (A) such transaction complies with clause (i) above and (B)
such transaction or series of related transactions shall have been approved by
a majority of the independent directors of the Board of Directors of the
Issuer or for which the Issuer or a Restricted Subsidiary has received a
written opinion of a nationally recognized investment banking firm stating
that the transaction is fair to the Issuer or such Restricted Subsidiary from
a financial point of view (a copy of which opinion shall be attached to such
Officers' Certificate); provided, however, that the foregoing restriction
shall not apply to (a) the payment of reasonable and customary regular fees to
directors of the Issuer or any of its Restricted Subsidiaries who are not
employees of the Issuer or any Affiliate, (b) the payment of monthly fees in
accordance with Section 4.13 and the reimbursement of expenses pursuant to the
terms of management agreements with Genesis or
48
any of its affiliates, (c) any payments or other transactions pursuant to any
tax-sharing agreement between the Issuer and any other Person with which the
Issuer files a consolidated tax return or with which the Issuer is part of a
consolidated group for tax purposes, (d) the Therapy Sale, provided the Issuer
or its Restricted Subsidiaries receives at least $20 million from the Therapy
Sale, (e) the Pharmacy Sale, provided the Issuer or its Restricted
Subsidiaries receives at least $50 million from the Pharmacy Sale, (f)
transactions in the ordinary course of business with Genesis or any of its
Affiliates, related to the Issuer's healthcare businesses or facilities;
provided that the aggregate amount of any such transactions in any twelve
month period does not exceed $10 million, (g) any Restricted Payments not
prohibited by Section 4.04 or (h) the payment of fees and expenses in
connection with the Transactions to Genesis, Cypress and TPG.
SECTION 4.09. Limitation on Liens. The Issuer will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Liens of any kind upon any of its respective properties now owned or
acquired after the Closing Date or any income or profits therefrom securing
(i) any Indebtedness of the Issuer which is expressly subordinate in right of
payment to any other Indebtedness of the Issuer, unless the Notes are equally
and ratably secured; provided that, if such Indebtedness is subordinate in
right of payment to the Notes, the Lien securing such Indebtedness shall be
subordinate to the Lien securing the Notes with the same relative priority as
such subordinated Indebtedness shall have with respect to the Notes; provided
further that this clause (i) shall not be applicable to any Liens securing any
such Indebtedness which became Indebtedness of the Issuer pursuant to a
transaction permitted under Article Five or Liens securing Acquired
Indebtedness and, in each case, which Liens were in existence at the time of
such transaction or Incurrence of such Acquired Indebtedness and not Incurred
in connection with or in contemplation of such transaction or Incurrence, so
long as such Liens do not extend to or cover any property or assets of the
Issuer or any Restricted Subsidiary other than property or assets acquired in
such transaction, or (ii) any assumption, guarantee or other liability of any
Restricted Subsidiary in respect of any Indebtedness of the Issuer which is
expressly subordinate in right of payment to any other Indebtedness of the
Issuer, unless the substantially similar assumption, guarantee or other
liability of such Restricted Subsidiary in respect of the Notes is equally and
ratably secured; provided that, if such subordinated Indebtedness is
subordinate in right of payment to the Notes, the Lien securing the
assumption, guarantee or other liability of such Restricted Subsidiary in
respect of such Indebtedness shall be subordinate to the Lien securing the
assumption, guarantee or other liability of such Restricted Subsidiary with
respect to the Notes with the same relative priority as such subordinated
Indebtedness shall have with respect to the Notes; provided further that this
clause (ii) shall not be applicable to Liens securing any such assumption,
guarantee or other liability which existed at the time such Restricted
Subsidiary became a Restricted Subsidiary and which Liens were in existence at
the time of such transaction (unless such assumption, guarantee or other
liability was Incurred in connection with or in contemplation of such Person
becoming a Restricted Subsidiary), so long as such Liens do not extend to or
cover any property or assets of the Issuer or any other Restricted Subsidiary.
49
SECTION 4.10. Limitation on Asset Sales. The Issuer will not, and
will not permit any Restricted Subsidiary to, consummate any Asset Sale,
unless (i) the consideration received by the Issuer or such Restricted
Subsidiary is at least equal to the fair market value of the assets sold or
disposed of and (ii) at least 75% of the consideration received consists of
cash or Temporary Cash Investments. In the event and to the extent that the
Net Cash Proceeds received by the Issuer or any of its Restricted Subsidiaries
from one or more Asset Sales occurring on or after the Closing Date in any
period of 12 consecutive months exceed $10 million, then the Issuer shall or
shall cause the relevant Restricted Subsidiary to (i) within 12 months after
the date Net Cash Proceeds so received exceed $10 million (A) apply an amount
equal to such excess Net Cash Proceeds to permanently repay Senior
Indebtedness of the Issuer or any Subsidiary Guarantor or Indebtedness of any
other Restricted Subsidiary, in each case owing to a Person other than the
Issuer or any of its Restricted Subsidiaries or (B) invest an equal amount, or
the amount not so applied pursuant to clause (A) (or enter into a definitive
agreement committing to so invest within 12 months after the date of such
agreement; provided that if any such agreement is terminated, the Issuer may
invest such Net Cash Proceeds prior to the end of the 12-month period referred
to in clause (i) or six months after the termination of such agreement,
whichever is later), in property or assets (other than current assets) of a
nature or type or that are used in a business (or in a company having property
and assets of a nature or type, or engaged in a business) similar or related
to the nature or type of the property and assets of, or the business of, the
Issuer and its Restricted Subsidiaries existing on the date of such investment
and (ii) apply (no later than the end of the 12-month period referred to in
clause (i)) such excess Net Cash Proceeds (to the extent not applied pursuant
to clause (i)) as provided in the following paragraph of this Section 4.10.
The amount of such excess Net Cash Proceeds required to be applied (or to be
committed to be applied) during such 12-month period as set forth in clause
(i) of the preceding sentence and not applied as so required by the end of
such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount
of Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this Section 4.10 totals at least $10 million, the Issuer must commence, not
later than the fifteenth Business Day of such month, and consummate an Offer
to Purchase from the Holders on a pro rata basis an aggregate principal amount
of Notes equal to the Excess Proceeds on such date, at a purchase price equal
to 100% of the principal amount of the Notes, plus, in each case, accrued
interest (if any) to the Payment Date.
SECTION 4.11. Repurchase of Notes upon a Change in Control. The
Issuer must commence, within 30 days of the occurrence of a Change in Control,
and consummate an Offer to Purchase for all Notes then outstanding, at a
purchase price equal to 101% of the principal amount thereof, plus accrued
interest (if any) to the Payment Date.
Within 30 days following a Change of Control, the Issuer shall mail a
notice to each Holder and the Trustee stating the terms of the Change of
Control.
50
SECTION 4.12. Limitation on Senior Subordinated Indebtedness. The
Issuer will not Incur any Indebtedness, other than the Notes, that is
subordinate in right of payment to any Senior Indebtedness, unless such
Indebtedness is also pari passu with, or subordinate in right of payment to,
the Notes pursuant to subordination provisions substantially similar to those
contained in the Indenture; provided that the foregoing limitation shall not
apply to distinctions between categories of Senior Indebtedness of the Issuer
that exist by reason of any Liens or Guarantees arising or created in respect
of some but not all of such Senior Indebtedness.
SECTION 4.13. Limitation on Management Fees. The Issuer will not, and
will not permit any of its Restricted Subsidiaries to, pay any management fees
in any month to the extent such fees would exceed the greater of (i)
$1,991,666 and (ii) 4% of the Issuer's consolidated net revenues for such
month; provided that the Issuer may pay management fees in excess of such
amount (including accrued fees) to the extent that (A) both before and after
giving effect to the proposed payment (x) no Default or Event of Default shall
have occurred and be continuing and (y) the Issuer's Fixed Charge Coverage
Ratio for the four full fiscal quarters immediately preceding such event,
taken as one period and calculated on the assumption that (I) any Indebtedness
Incurred or repaid after the first day of such four-quarter period and on or
prior to the date of such payment (other than Indebtedness Incurred or repaid
under a revolving credit or similar arrangement to the extent of the
commitment thereunder (or under any predecessor revolving credit or similar
arrangement) in effect on the last day of such four quarter period unless any
portion of such Indebtedness is projected, in the reasonable judgment of the
senior management of the Issuer, to remain outstanding for a period in excess
of 12 months from the date of the Incurrence thereof), had been Incurred or
repaid on the first day of such four-quarter period, (II) any acquisition or
disposition by the Issuer and its Restricted Subsidiaries out of the ordinary
course of business of any assets constituting a company, division, line of
business or business facility, in each case after the first day of such
four-quarter period, and on or prior to the date of such payment, had been
consummated on the first day of such four-quarter period (including giving pro
forma effect to the application of the proceeds of any such disposition) and
(III) the proposed management fees were paid during such period, would have
been at least equal to 2:00:1.00; and (B) the aggregate amount of management
fees paid with respect to any month do not exceed 6% of the Issuer's
consolidated net revenues for such month. To the extent the Issuer is
prohibited from paying any management fees as a result of clause (y) of the
proviso to the preceding sentence, the Issuer may accrue such fees until they
may be paid in accordance with this Section 4.13 provided the payment of such
accrued fees is subordinated in right of payment to the prior payment in full
in cash or Cash Equivalents of all of the Issuer's obligations under the Notes
and this Indenture.
SECTION 4.14. Existence. Subject to Articles Four and Five of this
Indenture, the Issuer will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Issuer and each such Subsidiary and the rights
(whether pursuant to charter, partnership certificate, agreement, statute or
otherwise), material
51
licenses and franchises of the Issuer and each such Subsidiary; provided that
the Issuer shall not be required to preserve any such right, license or
franchise, or the existence of any Restricted Subsidiary, if the maintenance
or preservation thereof is no longer desirable in the conduct of the business
of the Issuer and its Restricted Subsidiaries taken as a whole.
SECTION 4.15. Payment of Taxes and Other Claims. The Issuer will pay
or discharge and shall cause each of its Subsidiaries to 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 (a) the Issuer or any such Subsidiary, (b) the income or profits of any
such Subsidiary which is a corporation or (c) the property of the Issuer or
any such Subsidiary and (ii) all material lawful claims for labor, materials
and supplies that, if unpaid, might by law become a lien upon the property of
the Issuer or any such Subsidiary; provided that the Issuer shall not be
required to pay or discharge, or cause to be paid or discharged, any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and for which
adequate reserves have been established.
SECTION 4.16. Maintenance of Properties and Insurance. The Issuer
will cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Issuer may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section 4.16 shall prevent the Issuer or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
properties or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Issuer, desirable in the conduct of the business of the
Issuer or such Subsidiary.
The Issuer will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by
corporations similarly situated and owning like properties, including, but not
limited to, products liability insurance and public liability insurance, with
reputable insurers or with the government of the United States of America, or
an agency or instrumentality thereof, in such amounts, with such deductibles
and by such methods as shall be customary for corporations similarly situated
in the industry in which the Issuer or any such Restricted Subsidiary, as the
case may be, is then conducting business.
SECTION 4.17. Notice of Defaults. In the event that the Issuer
becomes aware of any Default or Event of Default, the Issuer, promptly after
it becomes aware thereof, will give written notice thereof to the Trustee.
52
SECTION 4.18. Compliance Certificates. (a) The Issuer shall deliver
to the Trustee, within 45 days after the end of each fiscal quarter (90 days
after the end of the last fiscal quarter of each year), an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that occurred during such fiscal quarter. In the case of the Officers'
Certificate delivered within 90 days after the end of the Issuer's fiscal
year, such certificate shall contain a certification from the principal
executive officer, principal financial officer or principal accounting officer
of the Issuer that a review has been conducted of the activities of the Issuer
and its Restricted Subsidiaries and the Issuer's and its Restricted
Subsidiaries' performance under this Indenture and that the Issuer has
complied with all conditions and covenants under this Indenture. For purposes
of this Section 4.18, such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this Indenture. If
the officers of the Issuer signing such certificate do know of such a Default
or Event of Default, the certificate shall describe any such Default or Event
of Default and its status. The first certificate to be delivered pursuant to
this Section 4.18(a) shall be for the first fiscal quarter beginning after the
execution of this Indenture.
(b) The Issuer shall deliver to the Trustee, within 90 days after the
end of the Issuer's fiscal year, a certificate signed by the Issuer's
independent certified public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture and the Notes
as they relate to accounting matters, (ii) that they have read the most recent
Officers' Certificate delivered to the Trustee pursuant to paragraph (a) of
this Section 4.18 and (iii) whether, in connection with their audit
examination, anything came to their attention that caused them to believe that
the Issuer was not in compliance with any of the terms, covenants, provisions
or conditions of Article Four and Section 5.01 of this Indenture as they
pertain to accounting matters and, if any Default or Event of Default has come
to their attention, specifying the nature and period of existence thereof;
provided that such independent certified public accountants shall not be
liable in respect of such statement by reason of any failure to obtain
knowledge of any such Default or Event of Default that would not be disclosed
in the course of an audit examination conducted in accordance with generally
accepted auditing standards in effect at the date of such examination.
SECTION 4.19. Commission Reports and Reports to Holders. At all times
from and after the earlier of (i) the date of the commencement of an Exchange
Offer or the effectiveness of the Shelf Registration Statement (the
"Registration") and (ii) the date that is six months after the Closing Date,
in either case, whether or not the Issuer is then required to file reports
with the Commission, the Issuer shall file with the Commission the annual,
quarterly and other reports and other information required by Section 13(a) or
15(d) of the Exchange Act, regardless of whether such sections of the Exchange
Act are applicable to the Issuer (unless the Commission will not accept such a
filing). The Issuer shall mail or cause to be mailed copies of such reports
and information to Holders and the Trustee within 15 days after the date it
files such reports and information with the Commission or after the date it
would have been required to file such reports and information with the
Commission had it been subject to such sections
53
of the Exchange Act; provided, however, that the copies of such reports and
information mailed to Holders may omit exhibits, which the Issuer will supply
to any Holder at such Holder's request. In addition, at all times prior to the
earlier of the date of the Registration and the date that is six months after
the Closing Date, the Issuer shall, at its cost, deliver to each Holder of the
Notes quarterly and annual reports substantially equivalent to those which
would be required by the Exchange Act. In addition, at all times prior to the
Registration, upon the request of any Holder or any prospective purchaser of
the Notes designated by a Holder, the Issuer shall supply to such Holder or
such prospective purchaser the information required under Rule 144A under the
Securities Act.
SECTION 4.20. Waiver of Stay, Extension or Usury Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Issuer from paying all or any portion
of the principal of, premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Issuer 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 FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Issuer May Merge, Etc. The Issuer shall not, in a
single transaction or through a series of related transactions, consolidate
with or merge with or into any other Person or sell, assign, convey, transfer
or lease or otherwise dispose of all or substantially all of its properties
and assets as an entirety to any Person or group of affiliated Persons, or
permit any of its Restricted Subsidiaries to enter into any such transaction
or transactions if such transaction or transactions, in the aggregate, would
result in a sale, assignment, transfer, lease or disposal of all or
substantially all of the properties and assets of the Issuer and its
Restricted Subsidiaries on a consolidated basis to any other Person or group
of affiliated Persons, unless at the time and after giving effect thereto (i)
either (A) the Issuer shall be the continuing corporation, or (B) the Person
(if other than the Issuer) formed by such consolidation or into which the
Issuer is merged or the Person which acquires by conveyance, transfer, lease
or disposition the properties and assets of the Issuer, substantially as an
entirety (the "Surviving Entity") shall be a corporation duly organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall, in either case, expressly
assume, by an indenture supplemental to this Indenture, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all the obligations of
the Issuer under the Notes and this Indenture, and this Indenture shall remain
in full force and effect; (ii) immediately before
54
and immediately after giving effect to such transaction on a pro forma basis
(and treating any Indebtedness not previously an obligation of the Issuer or a
Restricted Subsidiary which becomes the obligation of the Issuer or any of its
Restricted Subsidiaries in connection with or as a result of such transaction
as having been incurred at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing; (iii) immediately after
giving effect to such transaction on a pro forma basis, the Consolidated Net
Worth of the Issuer (or the Surviving Entity if the Issuer is not the
continuing obligor under the Indenture) is at least equal to the Consolidated
Net Worth of the Issuer immediately before such transaction; (iv) immediately
before and immediately after giving effect to such transaction on a pro forma
basis (and treating any Indebtedness not previously an obligation of the
Issuer or a Restricted Subsidiary which becomes the obligation of the Issuer
or any of its Restricted Subsidiaries in connection with or as a result of
such transaction as having been incurred at the time of such transaction), the
Issuer (or the Surviving Entity if the Issuer is not the continuing obligor
under this Indenture) could incur $1.00 of additional Indebtedness under
Section 4.03 (other than Permitted Indebtedness); provided that this clause
(iv) shall not apply to (x) a consolidation or merger with or into a Wholly
Owned Restricted Subsidiary with a positive net worth; provided that, in
connection with any such merger or consolidation, no consideration (other than
Qualified Capital Stock in the Surviving Entity or the Issuer) shall be issued
or distributed to the stockholders of the Issuer or (y) the merger of Genesis
ElderCare Acquisition Corp. with and into Multicare; and (v) the Issuer or the
Surviving Entity shall have delivered to the Trustee an Officers' Certificate
and an opinion of counsel, each stating that such consolidation, merger,
transfer, lease or disposition and such supplemental indenture comply with the
terms of this Indenture.
SECTION 5.02. Successor Substituted. Upon any consolidation or
merger, or any sale, assignment, conveyance, transfer, lease or disposition of
all or substantially all of the properties and assets of the Issuer in
accordance with the immediately preceding paragraph, the successor Person
formed by such consolidation or into which the Issuer is merged or the
successor Person to which such sale, assignment, conveyance, transfer, lease
or disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the
same effect as if such successor had been named as the Issuer herein. When a
successor assumes all the obligations of its predecessor under this Indenture
and the Notes, the predecessor shall be released from those obligations;
provided that in the case of a transfer by lease, the predecessor shall not be
released from the payment of principal and interest on the Notes.
55
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall occur
with respect to the Notes if:
(a) the Issuer defaults in the payment of the principal of
(or premium, if any, on) any Note when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise,
whether or not such payment is prohibited by Article Eleven;
(b) the Issuer defaults in the payment of interest on any
Note when the same becomes due and payable, and such default
continues for a period of 30 days, whether or not such payment is
prohibited by Article Eleven;
(c) the Issuer defaults in the performance of, or breaches
the provisions of, Article Five or Section 3.01(b) or fails to make
or consummate an Offer to Purchase in accordance with Section 4.10 or
4.11;
(d) the Issuer defaults in the performance of or breaches
any covenant or agreement of the Issuer in this Indenture or under
the Notes (other than a default specified in clause (a), (b) or (c)
above), and such default or breach continues for a period of 30
consecutive days after written notice by the Trustee or the Holders
of at least 25% in aggregate principal amount of the Notes then
outstanding;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Issuer or any Significant Subsidiary having an
outstanding principal amount of $10 million or more in the aggregate
for all such issues of all such Persons, whether such Indebtedness
now exists or shall hereafter be created, (I) an event of default
that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness
has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any
interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance)
for the payment of money in excess of $10 million in the aggregate
for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so
covered) shall be rendered against the Issuer or any Significant
Subsidiary and shall not be paid or discharged, and there shall be
any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against
all such Persons to
56
exceed $10 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
(g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Issuer or any
Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or
any Significant Subsidiary or for all or substantially all of the
property and assets of the Issuer or any Significant Subsidiary or
(C) the winding up or liquidation of the affairs of the Issuer or any
Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 30 consecutive days;
(h) the Issuer or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of
an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or any Significant Subsidiary or for all or
substantially all of the property and assets of the Issuer or any
Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors; or
(i) the Guaranty Documents are not executed and delivered
within three Business Days after the consummation of the Tender Offer
(unless prior to or at the end of such three Business Days the Merger
shall have been consummated).
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs
with respect to the Issuer) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by written notice to the Issuer (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal of, premium, if any, and accrued
interest on the Notes to be immediately due and payable. Upon a declaration of
acceleration, such principal, premium, if any, and accrued interest shall be
immediately due and payable. In the event of a declaration of acceleration
because an Event of Default set forth in clause (e) of Section 6.01 has
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Issuer or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration
with respect thereto. If an Event of Default specified in clause (g) or (h) of
Section 6.01 occurs with respect to the Issuer, the principal of, premium, if
any, and accrued interest on the Notes then outstanding
57
shall ipso facto 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 at least a majority in principal amount of the
outstanding Notes, by written notice to the Issuer and to the Trustee, may
waive all past defaults and rescind and annul a declaration of acceleration
and its consequences if (i) 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 and (ii) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least a
majority in principal amount of the outstanding Notes shall, pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in clause
(a) or (b) of Section 6.01 or in respect of a covenant or provision of this
Indenture which 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 thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority
in aggregate principal amount of the outstanding Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction and may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not pursue any
remedy with respect to this Indenture or the Notes unless:
58
(i) the Holder gives the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of outstanding Notes make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer (and if requested
provide) the Trustee indemnity satisfactory to the Trustee against
any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination
of whether the Holders of the required aggregate principal amount of
outstanding Notes have concurred in any request or direction of the Trustee to
pursue any remedy available to the Trustee or the Holders with respect to this
Indenture or the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
The limitations set forth in this Section 6.06 shall not apply to the
right of any Holder of a Note to receive payment of the principal of, premium,
if any, or interest on, such Note or to bring suit for the enforcement of any
such payment, on or after the due date expressed in the Notes, which right
shall not be impaired or affected without the consent of the Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of the principal of, premium, if any, or interest on, such
Note or to bring suit for the enforcement of any such payment, on or after the
due date expressed in the Notes, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c)
of Section 6.01 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Issuer or any
other obligor of the Notes for the whole amount of principal, premium, if any,
and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest
is lawful, interest on overdue
59
installments of interest, in each case at the rate specified in the Notes, and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Issuer (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or
exchange of the Notes or upon any such claims and to distribute the same, and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained
shall be deemed to empower 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 6.10. Priorities. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for
principal of, premium, if any, and interest on the Notes 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, premium, if any,
and interest, respectively; and
Third: to the Issuer or any other obligors of the Notes, as
their interests may appear, or as a court of competent jurisdiction
may direct.
The Trustee, upon prior written notice to the Issuer, may fix a
record date and payment date for any payment to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted
60
by it as Trustee, a court may require any party litigant in such suit to file
an undertaking to pay the costs of the suit, and the court may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07,
or a suit by Holders of more than 10% in principal amount of the outstanding
Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then, and in every such case, subject to any determination in such proceeding,
the Issuer, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Issuer, Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, 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 6.14. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder 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 Six 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.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
61
Whether or not herein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections
315(a) through (d):
(i) the Trustee may rely, and shall be protected in acting
or refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in any such document;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Section 12.04. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on
such certificate or opinion;
(iii) the Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care;
(iv) 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, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(v) the Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or
within its rights or powers or for any action it takes or omits to
take in accordance with the written direction of the Holders of a
majority in principal amount of the outstanding Notes relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture;
(vi) 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; and
(vii) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report,
62
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Issuer personally or by agent or attorney.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Issuer's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement
in the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event of
Default occurs and is continuing and if such Default or Event of Default is
known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Holder in the manner and to the extent provided in TIA Section 313(c) notice
of the Default or Event of Default within 45 days after it occurs, unless such
Default or Event of Default has been cured; 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 directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interest of
the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after
each August 1, beginning with August 1, 1998, the Trustee shall mail to each
Holder as provided in TIA Section 313(c) a brief report dated as of such
August 1, if required by TIA Section 313(a).
SECTION 7.07. Compensation and Indemnity. The Issuer shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services.
The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses and advances
incurred or made by the Trustee. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Issuer shall indemnify the Trustee against any and all losses,
liabilities, obligations, damages, penalties, judgments, actions, suits,
proceedings, reasonable costs and expenses
63
(including reasonable fees and disbursements of counsel) of any kind
whatsoever which may be incurred by the Trustee in connection with any
investigative, administrative or judicial proceeding (whether or not such
indemnified party is designated a party to such proceeding) arising out of or
in connection with the acceptance or administration of its duties under this
Indenture; provided, however, that the Issuer need not reimburse any expense
or indemnify against any loss, obligation, damage, penalty, judgment, action,
suit, proceeding, reasonable cost or expense (including reasonable fees and
disbursements of counsel) of any kind whatsoever which may be incurred by the
Trustee in connection with any investigative, administrative or judicial
proceeding (whether or not such indemnified party is designated a party to
such proceeding) in which it is determined that the Trustee acted with
negligence, bad faith or willful misconduct. The Trustee shall notify the
Issuer promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder, unless the Issuer is materially prejudiced thereby. The
Issuer shall defend the claim and the Trustee shall cooperate in the defense.
Unless otherwise set forth herein, the Trustee may have separate counsel and
the Issuer shall pay the reasonable fees and expenses of such counsel. The
Issuer need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
To secure the Issuer's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held by the Trustee pursuant to the Escrow Agreement and money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (g) or (h) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the Bankruptcy Law or
any applicable federal or state law for the relief of debtors.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Issuer in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Issuer. The Issuer may remove the Trustee if:
(i) the Trustee is no longer eligible under Section 7.10; (ii) the Trustee is
adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer
takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting pursuant to the requirement of TIA Section 310(b).
64
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuer. If the successor Trustee does not deliver its written acceptance
required by the next succeeding paragraph of this Section 7.08 within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuer or the Holders of a majority in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, (ii) the resignation or removal of the
retiring Trustee shall become effective and (iii) the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any Holder
who satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Issuer shall give notice of any resignation and any removal of
the Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuer's obligation under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national
banking association, the resulting, surviving or transferee corporation or
national banking association without any further act shall be the successor
Trustee with the same effect as if the successor Trustee had been named as the
Trustee herein.
SECTION 7.10. Eligibility. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall
have a combined capital and surplus of at least $25 million as set forth in
its most recent published annual report of condition.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Issuer. Money held in trust
65
by the Trustee need not be segregated from other funds except to the extent
required by law and except for money held in trust under Article Eight of this
Indenture.
SECTION 7.12. Withholding Taxes. The Trustee, as agent for the
Issuer, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Notes any and all withholding
taxes applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any
amounts payable in respect of the Notes, to withhold such amounts and timely
pay the same to the appropriate authority in the name of and on behalf of the
Holders of the Notes, that it will file any necessary withholding tax returns
or statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each Holder of a Note appropriate documentation
showing the payment thereof, together with such additional documentary
evidence as such Holders may reasonably request from time to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Issuer's Obligations. Except as otherwise
provided in this Section 8.01, the Issuer may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other
than destroyed, lost or stolen Notes that have been replaced or Notes
that are paid pursuant to Section 4.01 or Notes for whose payment
money or securities have theretofore been held in trust and
thereafter repaid to the Issuer, as provided in Section 8.05) have
been delivered to the Trustee for cancellation and the Issuer has
paid all sums payable by it hereunder; or
(ii) (A) the Notes mature within one year or all of them are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B)
the Issuer irrevocably deposits in trust with the Trustee during such
one-year period, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds solely
for the benefit of the Holders for that purpose, money or U.S.
Government Obligations sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without
consideration of any reinvestment of any interest thereon, to pay
principal, premium, if, any, and interest on the Notes to maturity or
redemption, as the case may be, and to pay all other sums payable by
it hereunder, (C) no Default or Event of Default with respect to the
Notes shall have occurred and be continuing on the date of such
deposit, (D) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it
is bound and
66
(E) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Issuer's obligations
under Section 7.07 shall survive. With respect to the foregoing clause (ii),
the Issuer's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05, 8.06 and Article Eleven (with
respect to payments in respect of Indebtedness that is subordinated in right
of payment to any Senior Indebtedness other than with respect to the assets
held in trust as described in the foregoing clause (ii)) shall survive until
the Notes are no longer outstanding. Thereafter, only the Issuer's obligations
in Sections 7.07, 8.05 and 8.06 shall survive. After any such irrevocable
deposit, the Trustee upon request shall acknowledge in writing the discharge
of the Issuer's obligations under the Notes and this Indenture except for
those surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Issuer will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the date of the deposit referred
to in clause (A) of this Section 8.02, and the provisions of this Indenture
will no longer be in effect with respect to the Notes, and the Trustee, at the
expense of the Issuer, shall execute proper instruments acknowledging the
same, except as to (i) rights of registration of transfer and exchange, (ii)
substitution of apparently mutilated, defaced, destroyed, lost or stolen
Notes, (iii) rights of Holders to receive payments of principal thereof and
interest thereon, (iv) the Issuer's obligations under Section 4.02, (v) the
rights, obligations and immunities of the Trustee hereunder and (vi) the
rights of the Holders as beneficiaries of this Indenture with respect to the
property so deposited with the Trustee payable to all or any of them; provided
that the following conditions shall have been satisfied:
(A) with reference to this Section 8.02, the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
7.10 acting as the agent of the Trustee) and conveyed all right,
title and interest for the benefit of the Holders, under the terms of
an irrevocable trust agreement in form and substance satisfactory to
the Trustee as trust funds in trust, specifically pledged to the
Trustee for the benefit of the Holders as security for payment of the
principal of, premium, if any, and interest, if any, on the Notes,
and dedicated solely to, the benefit of the Holders, in and to (1)
money in an amount, (2) U.S. Government Obligations that, through the
payment of interest, premium, if any, and principal in respect
thereof in accordance with their terms, will provide, not later than
one day before the due date of any payment referred to in this clause
(A), money in an amount or (3) a combination thereof in an amount
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, without
consideration of the reinvestment of such interest and after payment
of all federal, state and local taxes
67
or other charges and assessments in respect thereof payable by the
Trustee, the principal of, premium, if any, and accrued interest on
the outstanding Notes at the Stated Maturity of such principal or
interest; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of such principal, premium, if
any, and interest with respect to the Notes;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it
is bound and is permitted by Article Eleven;
(C) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or during the period ending
on the 123rd day after such date of deposit;
(D) the Issuer shall have delivered to the Trustee (1)
either (x) a ruling directed to the Trustee received from the
Internal Revenue Service to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as a
result of the Issuer's exercise of its option under this Section 8.02
and will be subject to federal income tax on the same amount and in
the same manner and at the same times as would have been the case if
such option had not been exercised or (y) an Opinion of Counsel to
the same effect as the ruling described in clause (x) above
accompanied by a ruling to that effect published by the Internal
Revenue Service, unless there has been a change in the applicable
federal income tax law since the date of this Indenture such that a
ruling from the Internal Revenue Service is no longer required and
(2) an Opinion of Counsel to the effect that (x) the creation of the
defeasance trust does not violate the Investment Issuer Act of 1940
and (y) after the passage of 123 days following the deposit (except,
with respect to any trust funds for the account of any Holder who may
be deemed to be an "insider" for purposes of the Bankruptcy Law,
after one year following the deposit), the trust funds will not be
subject to the effect of Section 547 of the Bankruptcy Law or Section
15 of the New York Debtor and Creditor Law in a case commenced by or
against the Issuer under either such statute, and either (I) the
trust funds will no longer remain the property of the Issuer (and
therefore will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally) or (II) if a court were to rule under
any such law in any case or proceeding that the trust funds remained
property of the Issuer, (a) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent
not paid to the Holders, the Trustee will hold, for the benefit of
the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise except for the
effect of Section 552(b) of the Bankruptcy Law on interest on the
trust funds accruing after the commencement of a case under such
statute and (b) the Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds
are used in such case or proceeding;
68
(E) if the Notes are then listed on a national securities
exchange, the Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that such deposit, defeasance and discharge
will not cause the Notes to be delisted; and
(F) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or
one year) period referred to in clause (D)(2)(y) of this Section 8.02, none of
the Issuer's obligations under this Indenture shall be discharged. Subsequent
to the end of such 123-day (or one year) period with respect to this Section
8.02, the Issuer's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.05, 8.06 and Article Eleven (with
respect to payments in respect of Indebtedness that is subordinated in right
of payment to any Senior Indebtedness other than with respect to the assets
held in trust as described in this Section 8.02) shall survive until the Notes
are no longer outstanding. Thereafter, only the Issuer's obligations in
Sections 7.07, 8.05 and 8.06 shall survive. If and when a ruling from the
Internal Revenue Service or an Opinion of Counsel referred to in clause (D)(1)
of this Section 8.02 is able to be provided specifically without regard to,
and not in reliance upon, the continuance of the Issuer's obligations under
Section 4.01, then the Issuer's obligations under such Section 4.01 shall
cease upon delivery to the Trustee of such ruling or Opinion of Counsel and
compliance with the other conditions precedent provided for herein relating to
the defeasance contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Issuer's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Issuer may omit
to comply with any term, provision or condition set forth in clauses (iii) and
(iv) of Section 5.01 and Sections 4.03 through 4.19, clause (c) of Section
6.01 with respect to clauses (iii) and (iv) of Section 5.01, clause (d) of
Section 6.01 with respect to Sections 4.03 through 4.19, and clauses (e) and
(f) of Section 6.01 shall be deemed not to be Events of Default, and Article
Eleven shall not apply to the money and/or U.S. Government Obligations held by
the trust referred to in clause (i) below, in each case with respect to the
outstanding Notes if:
(i) with reference to this Section 8.03, the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
7.10) and conveyed all right, title and interest to the Trustee for
the benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit
of the Holders as security for payment of the principal of,
69
premium, if any, and interest, if any, on the Notes, and dedicated
solely to, the benefit of the Holders, in and to (A) money in an
amount, (B) U.S. Government Obligations that, through the payment of
interest and principal in respect thereof in accordance with their
terms, will provide, not later than one day before the due date of
any payment referred to in this clause (i), money in an amount or (C)
a combination thereof in an amount 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, without consideration of the
reinvestment of such interest and after payment of all federal, state
and local taxes or other charges and assessments in respect thereof
payable by the Trustee, the principal of, premium, if any, and
interest on the outstanding Notes on the Stated Maturity of such
principal or interest; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes;
(ii) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it
is bound and is permitted by Article Eleven;
(iii) immediately after giving effect to such deposit on a
pro forma basis, no Default or Event of Default shall have occurred
and be continuing on the date of such deposit or during the period
ending on the 123rd day after such date of deposit;
(iv) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust
does not violate the Investment Issuer Act of 1940, (B) the Trustee,
for the benefit of the Holders, has a valid first-priority security
interest in the trust funds, (C) the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (D) after the passage of
123 days following the deposit (except, with respect to any trust
funds for the account of any Holder who may be deemed to be an
"insider" for purposes of the Bankruptcy Law, after one year
following the deposit), the trust funds will not be subject to the
effect of Section 547 of the Bankruptcy Law or Section 15 of the New
York Debtor and Creditor Law in a case commenced by or against the
Issuer under either such statute, and either (1) the trust funds will
no longer remain the property of the Issuer (and therefore will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally)
or (2) if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Issuer, (x)
assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and
perfected
70
security interest in such trust funds that is not avoidable in
bankruptcy or otherwise (except for the effect of Section 552(b) of
the Bankruptcy Law on interest on the trust funds accruing after the
commencement of a case under such statute) and (y) the Holders will
be entitled to receive adequate protection of their interests in such
trust funds if such trust funds are used in such case or proceeding;
(v) if the Notes are then listed on a national securities
exchange, the Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that such deposit defeasance and discharge
will not cause the Notes to be delisted; and
(vi) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06,
the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, 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.
SECTION 8.05. Repayment to Issuer. Subject to Sections 7.07, 8.01,
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request set forth in an Officers' Certificate any excess money
held by them at any time and thereupon shall be relieved from all liability
with respect to such money. The Trustee and the Paying Agent shall pay to the
Issuer upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years. After
payment to the Issuer, Holders entitled to such money must look to the Issuer
for payment as general creditors unless an applicable law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03, as the case may be, by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuer's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as
the case may be, until such time as the Trustee or Paying Agent is permitted
to apply all such money or U.S. Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be; provided that, if the Issuer
has made any payment of principal of, premium, if any, or interest on any
Notes because of the reinstatement of its obligations, the Issuer shall be
subrogated to
71
the rights of the Holders of such Notes to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Issuer, when authorized
by a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not, in
the good faith opinion of the Board of Directors as evidenced by a
Board Resolution, adversely affect the interests of the Holders in
any material respect;
(2) to comply with Article Five;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(5) to make any change that, in the good faith opinion of
the Board of Directors as evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and
6.07 and without prior notice to the Holders, the Issuer, when authorized by
its Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture, the Notes and the Escrow
Agreement with the written consent of the Holders of a majority in principal
amount of the Notes then outstanding, and the Holders of a majority in
principal amount of the Notes then outstanding by written notice to the
Trustee may waive future compliance by the Issuer with any provision of this
Indenture, the Notes and the Escrow Agreement.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
72
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or adversely affect any right of repayment at
the option of any Holder of any Note, or change any place of payment
where, or the currency in which, any Note or any premium or the
interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(ii) reduce the percentage in principal amount of
outstanding Notes the consent of whose Holders is required for any
such supplemental indenture, for any waiver of compliance with
certain provisions of this Indenture or certain Defaults and their
consequences provided for in this Indenture;
(iii) waive a default in the payment of principal of,
premium, if any, or interest on, any Note;
(iv) modify Article Eleven or the Escrow Agreement in a
manner that adversely affects the rights of any Holder in any
material respect; or
(v) modify any of the provisions of this Section 9.02,
except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected
thereby.
Notwithstanding the foregoing and without affecting any restrictions
on amendments to this Indenture under the Credit Facility, any amendment to
the provisions of Article Eleven that is adverse to the holders of Senior
Indebtedness shall require the consent of such holders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 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 this Section 9.02
becomes effective, the Issuer shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Issuer will
mail supplemental indentures to Holders upon request. Any failure of the
Issuer to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or
waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of
73
the consenting Holder, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as
to its Note or portion of its Note. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the time the amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver
shall become effective on receipt by the Trustee of written consents from the
Holders of the requisite percentage in principal amount of the outstanding
Notes.
The Issuer 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. If a record date is fixed, then, notwithstanding the
last two sentences of the immediately preceding paragraph, those persons who
were Holders at such record date (or their duly designated proxies) and only
those persons shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (v) of the second paragraph of Section 9.02. In case of an amendment
or waiver of the type described in clauses (i) through (v) of the second
paragraph of Section 9.02, the amendment or waiver shall bind each Holder who
has consented to it and every subsequent Holder of a Note that evidences the
same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. At the Issuer's expense, the Trustee may
place an appropriate notation on the Note about the changed terms and return
it to the Holder and the Trustee may place an appropriate notation on any Note
thereafter authenticated. Alternatively, if the Issuer or the Trustee so
determines, the Issuer 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.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and that it will be valid and binding upon the Issuer. Subject to
the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. The Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver that affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
74
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
SECURITY
SECTION 10.01. Security. (a) On the Closing Date, the Issuer shall
(i) enter into the Escrow Agreement and comply with the terms and provisions
thereof and (ii) cause the Collateral to be pledged to the Trustee for the
benefit of the Holders in an amount equal to the net proceeds to be received
by the Issuer from the sale of the Notes. The Collateral shall be pledged by
the Issuer to the Trustee for the benefit of the Holders and shall be held by
the Trustee in the Cash Collateral Account pending disposition pursuant to the
terms of the Escrow Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Escrow Agreement (including, without limitation, the
provisions providing for foreclosure and release of the Collateral) as the
same may be in effect or may be amended from time to time in accordance with
its terms, and authorizes and directs the Trustee to enter into the Escrow
Agreement and to perform its respective obligations and exercise its
respective rights thereunder in accordance therewith. The Issuer will do or
cause to be done all such acts and things as may be necessary or proper, or as
may be required by the provisions of the Escrow Agreement, to assure and
confirm to the Trustee the security interest in the Collateral contemplated
hereby, by the Escrow Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit
of this Indenture and of the Notes secured hereby, according to the intent and
purposes herein expressed. The Issuer shall take, or shall cause to be taken,
any and all actions reasonably required (and any action requested by the
Trustee) to cause the Escrow Agreement to create and maintain, as security for
the obligations of the Issuer under this Indenture and the Notes, valid and
enforceable first priority liens in and on all the Collateral, in favor of the
Trustee, superior to and prior to the rights of third Persons and subject to
no other Liens.
(c) The release of any Collateral pursuant to the Escrow Agreement
will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Escrow Agreement. To the extent
applicable, the Issuer shall cause TIA Section 314(d) relating to the release
of property or securities from the Lien and security interest of the Escrow
Agreement (other than pursuant to Sections 7(c) and 7(d) thereof) and relating
to the substitution therefor of any property or securities to be subjected to
the Lien and security interest of the Escrow Agreement to be complied with.
Any certificate or opinion required by TIA Section 314(d) may be made by an
Officer of the Issuer, except in cases where TIA Section 314(d) requires that
such
75
certificate or opinion be made by an independent Person, which Person shall be
an independent engineer, appraiser or other expert selected by the Issuer.
(d) The Issuer shall cause TIA Section 314(b), relating to opinions
of counsel regarding the Lien under the Escrow Agreement, to be complied with.
The Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such instruments.
(e) The Trustee, in its sole discretion and without the consent of
the Holders, may, and at the request of the Holders of at least 25% in
aggregate principal amount of Notes then outstanding shall, on behalf of the
Holders, take all actions it deems necessary or appropriate in order to (i)
enforce any of the terms of the Escrow Agreement and (ii) collect and receive
any and all amounts payable in respect of the obligations of the Issuer
thereunder. The Trustee shall have power to institute and to maintain such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral (including
power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of
the Holders or of the Trustee).
ARTICLE ELEVEN
SUBORDINATION
SECTION 11.01. Agreement to Subordinate. The Issuer, for itself, its
successors and assigns, covenants and agrees, and each Holder, by his or her
acceptance thereof, likewise covenants and agrees, that the payment of the
principal of and premium, if any, and interest on each and all of the Notes
(including any payment in connection with the repurchase, redemption or other
acquisition thereof) is hereby expressly subordinated, to the extent and in
the manner hereinafter set forth, in right of payment to the prior payment in
full, in cash or Cash Equivalents of all Senior Indebtedness. This Article
Eleven constitutes a continuing offer to all persons or entities who become
holders of, or continue to hold, Senior Indebtedness, each of whom is an
obligee hereunder and is entitled to enforce such holder's rights hereunder,
subject to the provisions hereof, without any act or notice of acceptance
hereof or reliance hereon. All provisions of this Article Eleven shall be
subject to Section 11.12.
For the purposes of this Article Eleven, (a) no Senior Indebtedness
shall be deemed to have been paid in full unless and until all commitments or
other obligations of the holders of the Senior Indebtedness to make advances
or otherwise extend credit shall have terminated and the holders thereof shall
have indefeasibly received payment in full in cash or Cash Equivalents, and
76
(b) the term "Senior Representative" shall mean the indenture trustee or other
trustee, agent or representative for any Senior Indebtedness.
SECTION 11.02. Distribution on Dissolution, Liquidation, Bankruptcy
or Reorganization. Upon any distribution of assets of the Issuer upon any
total or partial dissolution, winding up, liquidation or reorganization of the
Issuer, whether in bankruptcy, insolvency, reorganization or receivership
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of the Issuer or otherwise,
(a) The holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or, as acceptable
to each holder of Senior Indebtedness, in any other manner, of all
amounts and obligations due on or in respect of all Senior
Indebtedness before the Holders are entitled to receive any payment
or distribution of any kind or character (excluding securities of the
Issuer provided for in a plan of reorganization with respect to the
Issuer approved by the bankruptcy court that are equity securities or
are subordinated in right of payment to all Senior Indebtedness to
the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article; such securities are
hereinafter collectively referred to as "Permitted Junior Notes") on
account of principal of, premium, if any, or interest on the Notes
(including any payment or other distribution which may be received
from the holders of Subordinated Indebtedness as a result of any
payment on such Subordinated Indebtedness); and
(b) any payment or distribution of assets of the Issuer or
any Subsidiary of the Issuer of any kind or character, whether in
cash, property or securities (excluding Permitted Junior Notes), by
set-off or otherwise, to which the Holders or the Trustee would be
entitled but for the provisions of this Article (including any
payment or other distribution which may be received from the holders
of Subordinated Indebtedness as a result of any payment on such
Subordinated Indebtedness) shall be paid by the liquidating trustee
or agent or other Person making such payment or distribution, whether
a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Senior Indebtedness or their
Senior Representative or Representatives, ratably according to the
aggregate amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, to the extent necessary to
make payment in full in cash, Cash Equivalents or in any other form
acceptable to each, of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or any Holder shall have
received any payment or distribution of assets of the Issuer or any
Subsidiary of the Issuer of any kind or character, whether in cash,
property or securities (excluding Permitted Junior Notes), in respect
of principal,
77
premium, if any, and interest on the Notes before all Senior
Indebtedness is paid in full in cash, then and in such event, such
payment or distribution (including any payment or other distribution
which may be received from the holders of Subordinated Indebtedness
as a result of any payment on such Subordinated Indebtedness) shall
be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Issuer for
application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full
in cash, Cash Equivalents or, as acceptable to each holder of Senior
Indebtedness, any other manner, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness
or deposited with a court of competent jurisdiction.
The consolidation of the Issuer with, or the merger of the Issuer
into, another corporation or the liquidation or dissolution of the Issuer
following the sale or conveyance of its property or assets as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution, winding
up, liquidation or reorganization of the Issuer for the purposes of this
Article Eleven if such other corporation shall, as a part of such
consolidation, merger, sale or conveyance, comply with the conditions stated
in Article Five.
If the Trustee or any Holder does not file a proper claim or proof of
debt in the form required in any proceeding referred to above prior to 30 days
before the expiration of the time to file such claim in such proceeding, then
the holder of any Senior Indebtedness (or its Senior Representative) is hereby
authorized, and has the right, to file an appropriate claim or claims for or
on behalf of such Holder.
SECTION 11.03. Suspension of Payment When Senior Indebtedness in
Default. (a) Unless Section 11.02 shall be applicable, upon the occurrence of
a Payment Default, then no payment or distribution of any assets of the Issuer
or any Subsidiary of the Issuer of any kind or character (excluding Permitted
Junior Notes) shall be made by the Issuer or any Subsidiary of the Issuer or
on behalf of or out of the property of the Issuer, or received by the Trustee
or any Noteholder on account of principal of, premium, if any, or interest on,
the Notes or on account of the purchase, redemption, defeasance (whether under
Section 8.02 or 8.03) or other acquisition of or in respect of the Notes
unless and until such Payment Default shall have been cured or waived in
writing by the holders of the Designated Senior Indebtedness or shall have
ceased to exist or the Designated Senior Indebtedness shall have been paid in
full in cash, Cash Equivalents or in any other manner as acceptable to each
holder of such Designated Senior Indebtedness, after which the Issuer shall
resume making any and all required payments in respect of the Notes, including
any missed payments.
(b) Unless Section 11.02 shall be applicable, upon (i) the occurrence
of a Non-payment Default pursuant to which the maturity of the applicable
Designated Senior
78
Indebtedness may be accelerated, either immediately or upon the giving of
notice, the passage of time or both, and (ii) receipt by the Trustee and the
Issuer from a Senior Representative or the holder of any Designated Senior
Indebtedness of written notice of such occurrence, no payment (other than any
payments made pursuant to Section 8.02 or 8.03 or from the money or proceeds
of U.S. Government Securities held under the Escrow Agreement as provided in
Section 10.01) or distribution of any assets of the Issuer or any Subsidiary
of the Issuer of any kind or character (excluding Permitted Junior Notes)
shall be made by the Issuer or any Subsidiary of the Issuer or on behalf of or
out of the property of the Issuer or any Subsidiary of the Issuer, or received
by the Trustee or any Holder on account of any principal of, premium, if any,
or interest on, the Notes (including payments under any guaranty thereof) or
on account of the purchase, redemption or other acquisition of or in respect
of Notes (including payments under any guaranty thereof) for a period
("Payment Blockage Period") commencing on the date of receipt by the Trustee
of such notice until the earliest of (x) 179 days after receipt of such
written notice by the Trustee (provided any Designated Senior Indebtedness as
to which notice was given shall theretofore have not been accelerated), (y)
the date such Non-payment Default and all other Non-payment Defaults as to
which notice is also given after such period is initiated shall have been
cured or waived in writing by the holders of the Designated Senior
Indebtedness or shall have ceased to exist or the Senior Indebtedness related
thereto shall have been paid in full in cash or Cash Equivalents or (z) the
date such Payment Blockage Period and any Payment Blockage Periods initiated
during such period shall have been terminated by written notice to the Issuer
or the Trustee from the Senior Representative and the holders of the
Designated Senior Indebtedness that have given notice of a Non-payment Default
at or after the initiation of such Payment Blockage Period, after which in the
case of clause (x), (y) or (z), the Issuer shall resume making any and all
required payments in respect of the Notes including any missed payments.
Notwithstanding any other provision of this Indenture, in no event shall a
Payment Blockage Period extend beyond 179 days from the date of the receipt by
the Issuer or the Trustee of the notice referred to in clause (ii) of this
paragraph (b) (the "Initial Blockage Period"). Not more than one Payment
Blockage Period may be commenced with respect to the Notes during any period
of 360 consecutive days; provided that, subject to the limitations set forth
in the next sentence, the commencement of a Payment Blockage Period by the
representative of Designated Senior Indebtedness other than the Credit
Facility shall not bar the commencement of another Payment Blockage Period by
the representative for the Credit Facility within such period of 360
consecutive days. Notwithstanding anything in this Indenture to the contrary,
there must be 180 days in any 360-day period in which no Payment Blockage
Period is in effect. No event of default (other than an event of default
pursuant to the financial maintenance covenants under the Credit Facility)
that existed or was continuing (it being acknowledged that any subsequent
action that would give rise to an event of default pursuant to any provision
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose) on the date of
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or shall
be made, the basis for the commencement of a second Payment Blockage Period by
the representative for, or the holders of, such Designated Senior
79
Indebtedness, whether or not within a period of 360 consecutive days, unless
such event of default shall have been cured or waived for a period of not less
than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Issuer or
any Subsidiary of the Issuer shall make, or the Trustee or any Holder shall
receive, any payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section, then and in such event such payment shall be paid
over and delivered forthwith to a Senior Representative of the holders of the
Designated Senior Indebtedness.
SECTION 11.04. Payment Permitted if No Default. Nothing contained in
this Article, elsewhere in this Indenture or in any of the Notes shall prevent
the Issuer, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Issuer referred
to in Section 11.02 or under the conditions described in Section 11.03, from
making payments at any time of principal of, premium, if any, or interest on
the Notes.
SECTION 11.05. Subrogation to Rights of Holders of Senior
Indebtedness. Subject to the payment in full of all Senior Indebtedness, the
Holders shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders or the Trustee, shall, as among the Issuer, its
creditors other than holders of Senior Indebtedness, and the Holders, be
deemed to be a payment or distribution by the Issuer to or on account of the
Senior Indebtedness.
SECTION 11.06. Provisions Solely to Define Relative Rights. The
provisions of this Article are intended solely for the purpose of defining the
relative rights of the Holders on the one hand and the holders of Senior
Indebtedness on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Notes is intended to or shall (i) impair, as among
the Issuer, its creditors other than holders of Senior Indebtedness and the
Holders, the obligation of the Issuer, which is absolute and unconditional, to
pay to the Holders the principal of, premium, if any, and interest on the
Notes as and when the same shall become due and payable in accordance with
their terms; or (ii) affect the relative rights against the Issuer of the
Holders and creditors of the Issuer other than their rights in relation to the
holders of Senior Indebtedness; or (iii) prevent the Trustee or any Holder
from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture, subject to the rights, under this Article of the
holders of Senior Indebtedness to receive distributions and payments otherwise
payable to Holders (A) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling
of assets and liabilities of the Issuer
80
referred to in Section 11.02, to receive, pursuant to and in accordance with
such Section, cash, property and securities otherwise payable or deliverable
to the Trustee or such Holder, or (B) under the conditions specified in
Section 11.03, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 11.03(c).
SECTION 11.07. Trustee to Effectuate Subordination. Each Holder by
his or her acceptance thereof authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article and appoints the Trustee his or her
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Issuer whether
in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the indebtedness of Issuer owing
to such Holder in the form required in such proceedings and the causing of
such claim to be approved. If the Trustee does not file a proper claim at
least 30 days before the expiration of the time to file such claim, then the
holders of Senior Indebtedness, and their agents, trustees or other
representatives are authorized to do so for and on behalf of the Holders.
SECTION 11.08. No Waiver of Subordination Provisions. (a) No right of
any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Issuer or any Holder
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Issuer or any Holder with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, or waive compliance with the terms of,
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection or payment of Senior Indebtedness; (iv) exercise or refrain from
exercising any rights against the Issuer and any other Person; (v) amend,
supplement, restate or otherwise modify or restructure the Senior
Indebtedness; and (vi) otherwise deal with any Person liable on account of
Senior Indebtedness; provided, however, that in no event shall any such
actions limit the right of the Holders to take any action to accelerate the
maturity of the Notes pursuant to Article Six of this Indenture or to pursue
any rights or remedies hereunder or under applicable laws if the taking of
such action does not otherwise violate the terms of this Article, subject to
the rights, if any, under this
81
Article, of the holders, from time to time, of Senior Indebtedness to receive
the cash, property or securities receivable upon the exercise of such rights
or remedies.
SECTION 11.09. Notice to Trustee. (a) The Issuer shall give prompt
written notice to the Trustee of any fact known to the Issuer which would
prohibit the making of any payment to or by the Trustee in respect of the
Notes. Notwithstanding the provisions of this Article or any provision of this
Indenture, the Trustee or any Paying Agent shall not be charged with knowledge
of the existence of any facts which would prohibit the making of any payment
to or by the Trustee or any Paying Agent in respect of the Notes, unless and
until the Trustee shall have received written notice thereof from the Issuer
or a holder of Senior Indebtedness or from a Senior Representative or any
trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least three Business Days
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal
of, premium, if any, or interest on any Note), then, anything herein contained
to the contrary notwithstanding but without limiting the rights and remedies
of the holders of Senior Indebtedness or any trustee, fiduciary or agent
thereof, the Trustee shall have full power and authority to receive such money
and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by
it within three Business Days prior to such date; nor shall the Trustee be
charged with knowledge of the elimination of the act or condition preventing
any such payment unless and until the Trustee shall have received an Officers'
Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Issuer by a Person representing himself
to be a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor) to establish that such notice has been
given by a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent thereof and the Trustee shall have no duty to
investigate the authenticity thereof or the authority of the person signing
and shall have no liability for relying thereon); provided, however, that
failure to give such notice to the Issuer shall not affect in any way the
ability of the Trustee to rely on such notice. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article, and if
such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment or the Trustee or the Paying Agent may deposit the funds
in question with a court of competent jurisdiction.
82
SECTION 11.10. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Issuer
referred to in this Article, the Trustee and the Holders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Issuer, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article, provided that the foregoing shall apply only if such court
has been fully apprised of the provisions of this Article.
SECTION 11.11. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder of Senior
Indebtedness. Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07.
SECTION 11.12. Trust Moneys and Escrowed Funds Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from (x)
money or the proceeds of U.S. Government Obligations held in trust under
Article Eight by the Trustee for the payment of principal of, premium, if any,
and interest on the Notes (provided that at the time deposited, such deposit
did not violate any then outstanding Senior Indebtedness) and (y) money or the
proceeds of U.S. Government Securities held under the Escrow Agreement shall
not be subordinated to the prior payment of any Senior Indebtedness or subject
to the restrictions set forth in this Article Eleven, and none of the Holders
shall be obligated to pay over any such amount to any holder of Senior
Indebtedness.
SECTION 11.13. No Suspension of Remedies. Nothing contained in this
Article shall limit the right of the Trustee or the Holders to take any action
to accelerate the maturity of the Notes pursuant to Article Six of this
Indenture or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article of the holders, from
time to time, of Senior Indebtedness to receive the cash, property or
securities receivable upon the exercise of such rights or remedies.
SECTION 11.14. Trustee's Relation to Senior Indebtedness. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article
83
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness.
SECTION 11.15. Other Rights of Holders of Senior Indebtedness. All
rights and interests under this Indenture of the holders of Senior
Indebtedness, and all agreements and obligations of the Trustee, the Holders
and the Issuer under this Article shall remain in full force and effect
irrespective of (i) any lack of validity or enforceability of the Credit
Facility, and promissory notes evidencing the Credit Facility or any other
agreement or instrument relating thereto or to any other Senior Indebtedness
or (ii) any other circumstance that might constitute a defense available to,
or a discharge of, a guarantor or surety (other than as a result of any
payments indefeasibly made on the Credit Facility or any other Senior
Indebtedness).
The holders of Senior Indebtedness are hereby authorized to demand
specific performance of this Article, whether or not the Issuer shall have
complied with any provisions of this Article applicable to it, at any time
when the Trustee or any Holder shall have failed to comply with any of these
provisions.
The provisions of this Article shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Senior Indebtedness is rescinded or must otherwise be returned by any holder
of Senior Indebtedness upon the insolvency, bankruptcy or reorganization of
the Issuer or otherwise, all as though such payment had not been made.
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939. Prior to the
effectiveness of the Registration Statement, this Indenture shall incorporate
and be governed by the provisions of the TIA that are required to be part of
and to govern indentures qualified under the TIA. After the effectiveness of
the Registration Statement, this Indenture shall be subject to the provisions
of the TIA that are required to be a part of this Indenture and shall, to the
extent applicable, be governed by such provisions. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA
318(c), the imposed duties shall control.
SECTION 12.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person, mailed by first-class
mail or sent by telecopier transmission addressed as follows:
84
if to the Issuer:
-----------------
Genesis ElderCare Acquisition Corp.
148 West State Street
Kennett Square, PA 19348
Telecopier No.: (610) 444-7483
Attention: George V. Hager, Jr.
if to the Trustee:
------------------
PNC Bank, National Association
Corporate Trust Department
1600 Market Street
Philadelphia, PA 19103
Telecopier No.: (215) 585-8872
Attention: Sheila Wallbridge
if to the Paying Agent:
-----------------------
Banque Internationale a Luxembourg S.A.
69, route d'Esch
L-1470 Luxembourg
Telecopier No.: (352) 4590-4227
Attention: Jacques Kinnen
The Issuer, the Trustee or the Paying Agent by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery. Copies of any such communication or notice to a Holder shall also be
mailed to the Trustee and each Paying Agent at the same time.
Any notice or communication (i) mailed to a Holder shall be mailed to
it at its address as it appears on the Security Register by first-class mail
and shall be sufficiently given to him if so mailed within the time prescribed
and (ii) for so long as the Notes are listed on the Luxembourg Stock Exchange,
shall be published in a leading newspaper of general circulation in
Luxembourg, not later than the latest date, and not earlier than the earliest
date, prescribed
85
in the Notes for the giving of such notice or communication. Copies of any
such communication or notice to a Holder shall also be mailed to the Trustee
and each Agent at the same time.
Failure to transmit a notice or communication to a Holder as provided
herein or any defect in any such notice shall not affect its sufficiency with
respect to other Holders. Except for a notice to the Trustee, which is deemed
given only when received, and except as otherwise provided in this Indenture,
if a notice or communication is mailed in the manner provided in this Section
12.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 12.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer to the Trustee to take any
action under this Indenture, the Issuer shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied
with; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 12.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)
and shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions
herein relating thereto;
86
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of
each such person, such condition or covenant has been complied with;
provided, however, that, with respect to matters of fact, an Opinion
of Counsel may rely on an Officers' Certificate or certificates of
public officials.
SECTION 12.05. Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 12.06. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Note shall not be a Business Day, then payment of principal
of, premium, if any, or interest on such Note, as the case may be, need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date, Payment
Date or Redemption Date, or at the Stated Maturity or date of maturity of such
Note; provided that no interest shall accrue for the period from and after
such Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or
date of maturity, as the case may be.
SECTION 12.07. Governing Law. The laws of the State of New York shall
govern this Indenture and the Notes. The Trustee, the Issuer and the Holders
agree to submit to the jurisdiction of the courts of the State of New York in
any action or proceeding arising out of or relating to this Indenture or the
Notes.
SECTION 12.08. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Issuer or any Subsidiary of the Issuer. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.09. No Recourse Against Others. No recourse for the
payment of the principal of, premium, if any, or interest on any of the Notes,
or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Issuer
contained in this Indenture, or in any of the Notes, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator or against any past, present or future partner, shareholder,
other equityholder, officer, director,
87
employee or controlling person, as such, of the Issuer or of any successor
Person, either directly or through the Issuer or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise; it being expressly understood that
all such liability is hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issue of
the Notes.
SECTION 12.10. Successors. All agreements of the Issuer in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 12.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 12.12. Separability. 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 12.13. Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of
the terms and provisions hereof.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
GENESIS ELDERCARE ACQUISITION CORP.
By: /s/ Michael R. Walker
--------------------------------
Attest: /s/ Ira C. Gubernick Name: Michael R. Walker
------------------------ Title: Chairman and Chief
Name: Ira C. Gubernick Executive Officer
Title: Secretary
PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
BANQUE INTERNATIONALE A LUXEMBOURG
S.A.
By:
--------------------------------
Name:
Title:
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
GENESIS ELDERCARE ACQUISITION CORP.
By:
--------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Shelia Wallbridge
--------------------------------
Name: Shelia Wallbridge
Title: Assistant Vice President
BANQUE INTERNATIONALE A LUXEMBOURG
S.A.
By:
--------------------------------
Name:
Title:
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
GENESIS ELDERCARE ACQUISITION CORP.
By:
--------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
BANQUE INTERNATIONALE A LUXEMBOURG
S.A.
By: /s/ Daniel Schammo
--------------------------------
Name Daniel Schammo
Title: Premier Conseller
EXHIBIT A
---------
[FACE OF NOTE]
GENESIS ELDERCARE ACQUISITION CORP.
9% Senior Subordinated Note due 2007
[CUSIP] [CINS] [__________]
No. $_________
GENESIS ELDERCARE ACQUISITION CORP., a Delaware corporation (the
"Issuer", which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to _____________, or its
registered assigns, the principal sum of ____________ ($____) on August 1,
2007.
Interest Payment Dates: February 1 and August 1, commencing February
1, 1998.
Regular Record Dates: January 15 and July 15.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: August 11, 1997 GENESIS ELDERCARE ACQUISITION
CORP.
By:
----------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 9% Senior Subordinated Notes due 2007 described in the
within-mentioned Indenture.
PNC BANK, NATIONAL ASSOCIATION
as Trustee
By:
---------------------------
Authorized Signatory
A-4
[REVERSE SIDE OF NOTE]
GENESIS ELDERCARE ACQUISITION CORP.
9% Senior Subordinated Note due 2007
1. Principal and Interest.
----------------------
The Issuer will pay the principal of this Note on August 1, 2007.
The Issuer promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of
the Notes at the close of business on the January 15 or July 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
February 1, 1998.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to
resales of the Notes is not declared effective by the Commission, on or prior
to the earlier of (x) the date that is six months after the Merger Closing
Date and (y) March 31, 1998, in accordance with the terms of the Registration
Rights Agreement dated as of August 11, 1997 between the Issuer and Morgan
Stanley & Co. Incorporated, First Union Capital Markets Corp. and Montgomery
Securities, the per annum interest rate borne by the Notes shall be increased
by 0.5% from the rate shown above accruing from the earlier of (x) the date
that is six months after the Merger Closing Date and (y) March 31, 1998,
payable in cash semiannually, in arrears, on each Interest Payment Date,
commencing August 1, 1998 until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from August 11, 1997;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such Interest Payment Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
The Issuer shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful,
at a rate per annum that is 2% in excess of the rate otherwise payable.
A-5
2. Method of Payment.
-----------------
The Issuer will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each February 1 and August
1 commencing February 1, 1998 to the persons who are Holders (as reflected in
the Security Register at the close of business on the January 15 or July 15
immediately preceding the Interest Payment Date), in each case, even if the
Note is cancelled on registration of transfer or registration of exchange
after such record date; provided that, with respect to the payment of
principal, the Issuer will make payment to the Holder that surrenders this
Note to a Paying Agent on or after August 1, 2007.
The Issuer will pay principal, premium, if any, and as provided
above, interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. However, the Issuer may
pay principal, premium, if any, and interest by its check payable in such
money. It may mail an interest check to a Holder's registered address (as
reflected in the Security Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for
the intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Issuer may change any authenticating agent, Paying Agent or
Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
----------------------
The Issuer issued the Notes under an Indenture dated as of August 11,
1997 (the "Indenture"), between the Issuer, PNC Bank, National Association,
trustee (the "Trustee") and Banque Internationale a Luxembourg S.A., a paying
agent. Capitalized terms herein are used as defined in the Indenture unless
otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture,
the terms of the Indenture shall control.
The Notes are general obligations of the Issuer.
A-6
5. Optional Redemption.
-------------------
The Notes will be redeemable, at the Issuer's option, in whole or in
part, at any time or from time to time, on or after August 1, 2002 and prior
to maturity, upon not less than 30 nor more than 60 days' prior notice mailed
by first-class mail to each Holder's last address, as it appears in the
Security Register, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest
due on an Interest Payment Date), if redeemed during the 12-month period
commencing August 1 of the years set forth below:
Redemption
Year Price
---- ----------
2002............................... 104.500%
2003............................... 102.250
2004 and thereafter................ 100.000
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Issuer defaults in the
payment of the Redemption Price.
6. Special Redemption.
------------------
In the event that the Tender Offer is not consummated and certain
other conditions set forth in the Escrow Agreement are not satisfied by the
Expiration Date, or if it appears, in the sole judgment of the Issuer, that
the Tender Offer will not be consummated and such conditions will not be
satisfied by the Expiration Date, the Issuer shall redeem the Notes in whole,
on 10 days' prior notice mailed by first-class mail to each Holder's last
address as it appears in the Security Register, at a Redemption Price equal to
101% of the principal amount of the Notes, plus accrued and unpaid interest to
the Redemption Date. On the earlier of (i) the Expiration Date, if the Trustee
has not received the Escrow Agreement Officers' Certificate that the Tender
Offer has been consummated (or will be consummated promptly upon the release
of the escrowed proceeds of the offering of the Notes to the Issuer) and
certain conditions have been satisfied and the Escrow Agreement Opinion of
Counsel, and (ii) such date on which the Trustee receives an officer's
certificate under the Escrow Agreement that the Tender Offer will not be
consummated and such conditions will not be satisfied by the Expiration Date,
the Trustee will mail by first-class mail to each Holder's last address as it
appears in the Security Register a written notice that the Notes will be
redeemed within 10 days of such notice.
A-7
7. Repurchase upon Change of Control.
---------------------------------
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Issuer in cash
pursuant to the offer described in the Indenture at a purchase price equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase (the "Payment Date").
A notice of such Change of Control will be mailed within 30 days
after any Change of Control occurs to each Holder at its last address as it
appears in the Security Register. Notes in original denominations larger than
$1,000 may be sold to the Issuer in part. On and after the Payment Date,
interest ceases to accrue on Notes or portions of Notes surrendered for
purchase by the Issuer, unless the Issuer defaults in the payment of the
purchase price.
8. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and multiples of $1,000 in excess thereof. A Holder
may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need
not register the transfer or exchange of any Notes for a period of 15 days
before the day of mailing of a notice of redemption of Notes selected for
redemption.
9. Persons Deemed Owners.
---------------------
A Holder shall be treated as the owner of a Note for all purposes.
10. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Issuer at its request. After that, Holders entitled to the
money must look to the Issuer for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Issuer deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Issuer will be discharged from the Indenture and the Notes,
A-8
except in certain circumstances for certain sections thereof, and (b) to the
Stated Maturity, the Issuer will be discharged from certain covenants set
forth in the Indenture.
12. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not
materially and adversely affect the rights of any Holder.
13. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the
Issuer and its Restricted Subsidiaries, among other things, to Incur
additional Indebtedness, make Restricted Payments, use the proceeds from Asset
Sales, engage in transactions with Affiliates or merge, consolidate or
transfer substantially all of its assets. Within 45 days after the end of each
fiscal quarter (90 days after the end of the last fiscal quarter of each
year), the Issuer must report to the Trustee on compliance with such
limitations.
14. Subordination.
-------------
The payment of the Notes will, to the extent set forth in the
Indenture, be subordinated in right of payment to the prior payment in full,
in cash or Cash Equivalents, of all Senior Indebtedness.
15. Successor Persons.
-----------------
When a successor person or other entity assumes all the obligations
of its predecessor under the Notes and the Indenture, the predecessor person
will be released from those obligations.
16. Defaults and Remedies.
---------------------
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise, whether or not such payment is prohibited by the
subordination provisions set forth in Article Eleven; (b) default in the
payment of interest on any Note when the same becomes due and payable, and
such default
A-9
continues for a period of 30 days, whether or not such payment is prohibited
by the subordination provisions set forth in Article Eleven; (c) default in
the performance or breach of Article Five or Section 3.01(b) of the Indenture
or the failure to make or consummate an Offer to Purchase in accordance with
Section 4.10 or 4.11 of the Indenture; (d) default in the performance of or
breach of any covenant or agreement of the Issuer in the Indenture or under
the Notes (other than a default specified in clause (a), (b) or (c) above),
and such default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; (e) there occurs with respect
to any issue or issues of Indebtedness of the Issuer or any Significant
Subsidiary having an outstanding principal amount of $10 million or more in
the aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (I) an event of default
that has caused the holder thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a
principal payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended within 30 days
of such payment default; (f) any final judgment or order (not covered by
insurance) for the payment of money in excess of $10 million in the aggregate
for all such final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be rendered
against the Issuer or any Significant Subsidiary and shall not be paid or
discharged, and there shall be any period of 30 consecutive days following
entry of the final judgment or order that causes the aggregate amount for all
such final judgments or orders outstanding and not paid or discharged against
all such Persons to exceed $10 million during which a stay of enforcement of
such final judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; (g) a court having jurisdiction in the premises enters
a decree or order for (A) relief in respect of the Issuer or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, (B) appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or any Significant Subsidiary or for all or
substantially all of the property and assets of the Issuer or any Significant
Subsidiary or (C) the winding up or liquidation of the affairs of the Issuer
or any Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 30 consecutive days; (h) the
Issuer or any Significant Subsidiary (A) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
under any such law, (B) consents to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or any Significant Subsidiary or for all or
substantially all of the property and assets of the Issuer or any Significant
Subsidiary or (C) effects any general assignment for the benefit of creditors;
or (i) the Guaranty Documents are not executed and delivered within three
Business Days after the consummation of the Tender Offer (unless prior to or
at the end of such three Business Days the Merger shall have been
consummated).
A-10
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least
25% in aggregate principal amount of the Notes then outstanding shall, declare
all the Notes to be due and payable. If a bankruptcy or insolvency default
with respect to the Issuer occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. Trustee Dealings with Issuer.
----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Issuer or its Affiliates and may otherwise deal with the Issuer or its
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
--------------------------
No incorporator or any past, present or future partner, stockholder,
other equity holder, officer, director, employee or controlling person as
such, of the Issuer or of any successor Person shall have any liability for
any obligations of the Issuer under the Escrow Agreement, the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this Note.
20. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Issuer will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to Genesis ElderCare
Acquisition Corp., 148 West State Street, Kennett Square, Pennsylvania 19348;
Attention: George V. Hager, Jr.
A-11
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing attorney to transfer said Note
------------------------------------
on the books of the Issuer with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
PERMANENT OFFSHORE GLOBAL NOTES AND
PERMANENT OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933 provided by Rule
144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
A-12
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:
------------------------------ -----------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as written upon the face
of the within-mentioned instrument
in every particular, without
alteration or any change
whatsoever.
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 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
Issuer 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
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Issuer pursuant to
Section 4.10 or 4.11 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Issuer
pursuant to Section 4.10 or 4.11 of the Indenture, state the amount:
$___________________.
Date:______________
Your Signature: _______________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________
EXHIBIT B
---------
Form of Certificate
-------------------
PNC Bank, National Association
1600 Market Street
Philadelphia, PA 19103
Attention: Corporate Trust Department
Re: Genesis ElderCare Acquisition Corp. (the "Issuer")
9% Senior Subordinated Notes due 2007 (the "Notes")
---------------------------------------------------
Dear Sirs:
This letter relates to U.S. $__________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.01 of
the Indenture dated as of August 11, 1997 (the "Indenture") relating to the
Notes, we hereby certify that we are (or we will hold such securities on behalf
of) a person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933. Accordingly, you are hereby requested to exchange the legended
certificate for an unlegended certificate representing an identical principal
amount of Notes, all in the manner provided for in the Indenture.
You and the Issuer 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
EXHIBIT C
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
PNC Bank, National Association
1600 Market Street
Philadelphia, PA 19103
Attention: Corporate Trust Department
Re: Genesis ElderCare Acquisition Corp. (the "Issuer")
9% Senior Subordinated Notes due 2007 (the "Notes")
---------------------------------------------------
Dear Sirs:
In connection with our proposed purchase of $____________aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
August 11, 1997 (the "Indenture"), relating to the Notes, and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Notes except in compliance with, such restrictions and conditions and the
Securities Act of 1933 (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (A) to the Issuer
or any subsidiary thereof, (B) in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined therein), (C)
to an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Issuer a signed letter substantially in the
form of this letter, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes from
us a notice advising such purchaser that resales of the Notes are restricted
as stated herein.
3. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Issuer such certifications, legal
opinions and other information as you and
C-2
the Issuer may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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 and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Issuer 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.
Very truly yours,
[Name of Transferee]
By:
--------------------------
Authorized Signature
EXHIBIT D
---------
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
--------------------------------------------------
_________,___
PNC Bank, National Association
1600 Market Street
Philadelphia, PA 19103
Attention: Corporate Trust Department
Re: Genesis ElderCare Acquisition Corp. (the "Issuer")
9% Senior Subordinated Notes due 2007 (the "Notes")
---------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$______ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the Securities Act of 1933 and,
accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Issuer 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 Transferor]
By:
------------------------
Authorized Signature
EXHIBIT E
FORM OF FIRST SUPPLEMENTAL INDENTURE
THE FIRST SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture") dated as of __________, 1997, among The Multicare Companies, Inc., a
Delaware corporation ("Multicare"), Genesis ElderCare Acquisition Corp., a
Delaware corporation (the "Issuer"), PNC Bank, National Association, as trustee
under the indenture referred to below (the "Trustee") and Banque Internationale
a Luxembourg S.A. (a "Paying Agent").
R E C I T A L S
WHEREAS, the Issuer heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of August 11, 1997, providing
for the issuance of an aggregate principal amount of $250,000,000 of 9% Senior
Subordinated Notes due 2007 (the "Notes");
WHEREAS, the Tender Offer is required to be consummated by the
Expiration Date and the Merger is required to be consummated within four months
after consummation of the Tender Offer;
WHEREAS, Multicare desires to guarantee, on a senior
subordinated basis, the obligations of the Issuer under the Indenture and the
Notes and to comply with the requirements of the Indenture with respect to the
execution of a supplemental indenture in connection with its senior subordinated
guaranty; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer
and the Trustee are authorized to execute and deliver this Supplemental
Indenture.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Issuer, Multicare and the Trustee mutually covenant and agree
for the equal and ratable benefit of the holders of the Notes as follows:
2
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise defined herein,
terms defined in the Indenture are used herein as defined therein. In addition,
as used herein:
"Guaranteed Obligations" has the meaning provided in Section 2.01.
"Guarantor Senior Indebtedness" means the following
obligations whether outstanding on the Closing Date or thereafter
Incurred: (a) all Indebtedness and other monetary obligations of
Multicare or any Subsidiary of Multicare under or in respect of the
Credit Facility (including obligations in respect of any lease
financing facility of the Credit Facility) or any Interest Rate
Contract or Currency Agreement related to Indebtedness under the Credit
Facility, whether for principal, interest (including interest accruing
after the filing of a petition by or against Multicare or any
Subsidiary of Multicare under any state or federal Bankruptcy Laws,
whether or not such interest is allowed as a claim after such filing in
any proceeding under such law), fees, expenses, indemnification or
otherwise, and (b) the principal of, premium, if any, and interest on
all other Indebtedness of Multicare (other than the Multicare Senior
Subordinated Guaranty) unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall be pari passu with or subordinated in right of
payment to the Multicare Senior Subordinated Guaranty. Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (i) Indebtedness
that is by its terms subordinate in right of payment to any
Indebtedness of Multicare, (ii) Indebtedness which when incurred and
without respect to any election under Section 1111(b) of the Bankruptcy
Law is without recourse to Multicare, (iii) any repurchase, redemption
or other obligation in respect of Redeemable Capital Stock, (iv)
Indebtedness for goods, materials or services purchased in the ordinary
course of business or indebtedness consisting of trade payables or
other current liabilities, (v) Indebtedness of or amounts owed by
Multicare to employees, officers, or directors, (vi) any liability for
federal, state, local or other taxes owed or owing by Multicare, (vii)
Indebtedness of Multicare to a Subsidiary of Multicare or any other
Affiliate of Multicare or any of such Affiliate's subsidiaries, (viii)
that portion of any Indebtedness which at the time of issuance is
issued in violation of the Indenture and (ix) amounts owing under
leases (other than Capital Lease Obligations).
"Guarantor Designated Senior Indebtedness" means (i) all
Guarantor Senior Indebtedness under, or in respect of, the Credit
Facility and any Interest Rate Contract or Currency Agreement related
to Indebtedness under the Credit Facility and (ii) any other Guarantor
Senior Indebtedness which, at the time of determination, has an
aggregate principal amount outstanding, together with any commitments
to lend additional amounts, of at least $30,000,000 and is specifically
designated in the
3
instrument evidencing such Senior Indebtedness as "Guarantor Designated
Senior Indebtedness."
"Guarantor Subordinated Indebtedness" means any Indebtedness
of Multicare subordinated in right of payment to the Multicare Senior
Subordinated Guaranty.
"Multicare Restricted Subsidiary" means any Subsidiary of
Multicare other than a Multicare Unrestricted Subsidiary.
"Multicare Unrestricted Subsidiary" means (i) any Subsidiary
of Multicare that at the time of determination shall be designated a
Multicare Unrestricted Subsidiary by the Board of Directors in the
manner provided below; and (ii) any Subsidiary of a Multicare
Unrestricted Subsidiary. The Board of Directors may designate any
Multicare Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary of Multicare) to be a Multicare Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or
holds any Lien on any property of, Multicare or any Multicare
Restricted Subsidiary; provided that (A) any guarantee by Multicare or
any Multicare Restricted Subsidiary of any Indebtedness of the
Subsidiary being so designated shall be deemed an "Incurrence" of such
Indebtedness and an "Investment" by Multicare or such Multicare
Restricted Subsidiary (or both, if applicable) at the time of such
designation; (B) either (I) the Subsidiary to be so designated has
total assets of $1,000 or less or (II) if such Subsidiary has assets
greater than $1,000, such designation would be permitted under Section
4.04 of the Indenture and (C) if applicable, the Incurrence of
Indebtedness and the Investment referred to in clause (A) of this
proviso would be permitted under Sections 4.03 and 4.04 of the
Indenture. The Board of Directors may designate any Multicare
Unrestricted Subsidiary to be a Multicare Restricted Subsidiary;
provided that (i) no Default or Event of Default shall have occurred
and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Multicare
Unrestricted Subsidiary outstanding immediately after such designation
would, if Incurred at such time, have been permitted to be Incurred
(and shall be deemed to have been Incurred) for all purposes of the
Indenture. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the
foregoing provisions.
"Multicare Senior Subordinated Guaranty" means the
unconditional guaranty by Multicare of the Guaranteed Obligations on
the terms and conditions provided herein.
"Placement Agreement" means the placement agreement between
the Issuer and Morgan Stanley & Co. Incorporated, Montgomery Securities
and First Union Capital Markets Corp. dated August 4, 1997.
4
ARTICLE TWO
MULTICARE SENIOR SUBORDINATED GUARANTY
SECTION 2.01. Multicare Senior Subordinated Guaranty. Subject
to the provisions of this Article Two, Multicare, as primary obligor and not
merely as surety, hereby fully, unconditionally and irrevocably guarantees, from
the consummation of the Tender Offer to and until the consummation of the
Merger, to each Holder and to the Trustee on behalf of the Holders: (i) the due
and punctual payment of the principal of, premium, if any, on and interest on
each Note, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal of and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Issuer to the Holders or the Trustee (the "Guaranteed Obligations"), all in
accordance with the terms of such Note and the Indenture and (ii) in the case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, at Stated Maturity, by
acceleration or otherwise. Multicare hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Issuer any right to require a proceeding first against the
Issuer the benefit of discussion, protest or notice with respect to any such
Note or the debt evidenced thereby and all demands whatsoever, and covenants
that this Multicare Senior Subordinated Guaranty will not be discharged as to
any such Note except upon the earlier of (x) the payment in full of the
principal thereof, premium, if any, and interest thereon and (y) the
consummation of the Merger. The maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Six of the Indenture for the purposes
of this Article Two. In the event of any declaration of acceleration of such
obligations as provided in Article Six of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by
Multicare for the purpose of this Article Two. In addition, without limiting the
foregoing provisions, upon the effectiveness of any acceleration under Article
Six of the Indenture, the Trustee shall promptly make a demand for payment on
the Notes under the Multicare Senior Subordinated Guaranty provided for in this
Article Two.
If the Trustee or the Holder of any Note is required by any
court or otherwise to return to the Issuer or Multicare, or any custodian,
receiver, liquidator, trustee, sequestrator or other similar official acting in
relation to the Issuer or Multicare, any amount paid to the Trustee or such
Holder in respect of a Note, this Multicare Senior Subordinated Guaranty, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Multicare further agrees, to the fullest extent that it may lawfully do so,
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Two hereof for the purposes of this Multicare Senior
Subordinated Guaranty, notwithstanding any stay, injunction or other prohibition
extant under any applicable bankruptcy law preventing such acceleration in
respect of the obligations guaranteed hereby.
5
Until such time as the Notes are fully and finally paid,
including all interest, premium, principal and liquidated damages with respect
thereto, Multicare hereby irrevocably waives any claim or other rights which it
may now or hereafter acquire against the Issuer that arise from the existence,
payment, performance or enforcement of its obligations under this Multicare
Senior Subordinated Guaranty and the Indenture, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of the Holders
against the Issuer or any collateral which any such Holder or the Trustee on
behalf of such Holder hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Issuer, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to Multicare in violation of the preceding sentence and the
principal of, premium, if any, and accrued interest on the Notes shall not have
been paid in full, such amount shall be deemed to have been paid to Multicare
for the benefit of, and held in trust for the benefit of, the Holders, and shall
forthwith be paid to the Trustee for the benefit of the Holders to be credited
and applied upon the principal of, premium, if any, and accrued interest on the
Notes. Multicare acknowledges that it will receive direct and indirect benefits
from the issuance of the Notes pursuant to this Indenture and that the waivers
set forth in this Section 2.01 are knowingly made in contemplation of such
benefits.
The Multicare Senior Subordinated Guaranty set forth in this
Section 2.01 shall not be valid or become obligatory for any purpose with
respect to a Note until the certificate of authentication on such Note shall
have been signed by or on behalf of the Trustee.
SECTION 2.02. Obligations Unconditional. Subject to Section
2.05, nothing contained in this Article Two or in the Indenture or in the Notes
is intended to or shall impair, as between Multicare and the Holders, the
obligation of Multicare, which is absolute and unconditional, upon failure by
the Issuer, to pay to the Holders the principal of, premium, if any, and
interest on the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of Multicare, nor shall anything herein or
therein prevent any Holder or the Trustee on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture.
Without limiting the foregoing, nothing contained in this
Article Two will restrict the right of the Trustee or the Holders to take any
action to declare the Multicare Senior Subordinated Guaranty to be due and
payable prior to the Stated Maturity of the Notes pursuant to Section 6.02 of
the Indenture or to pursue any rights or remedies hereunder.
SECTION 2.03. Notice to Trustee. Multicare shall give prompt
written notice to the Trustee of any fact known to Multicare which would
prohibit the making of any payment
6
to or by the Trustee in respect of the Multicare Senior Subordinated Guaranty
pursuant to the provisions of this Article Two.
SECTION 2.04. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if any, or
interest on the Notes by reason of any provision of this Article will not be
construed as preventing the occurrence of an Event of Default.
SECTION 2.05. Net Worth Limitation. Notwithstanding any other
provision of the Indenture or the Notes, this Multicare Senior Subordinated
Guaranty shall not be enforceable against Multicare in an amount in excess of
the net worth of Multicare at the time that determination of such net worth is,
under applicable law, relevant to the enforceability of this Multicare Senior
Subordinated Guaranty. Such net worth shall include any claim or future claim of
Multicare against the Issuer for reimbursement and any claim against any grantor
of a Guarantee for contribution.
ARTICLE THREE
SUBORDINATION
SECTION 3.01. Agreement to Subordinate. Multicare, for itself,
its successors and assigns, covenants and agrees, and each Holder, by his or her
acceptance thereof, likewise covenants and agrees, that the payment of the
principal of and premium, if any, and interest on each and all of the Notes
under this Multicare Senior Subordinated Guaranty (including any payment in
connection with the repurchase, redemption or other acquisition thereof) is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full, in cash or Cash
Equivalents of all Guarantor Senior Indebtedness. This Article Three constitutes
a continuing offer to all persons or entities who become holders of, or continue
to hold, Guarantor Senior Indebtedness, each of whom is an obligee hereunder and
is entitled to enforce such holder's rights hereunder, subject to the provisions
hereof, without any act or notice of acceptance hereof or reliance hereon. All
provisions of this Article Three shall be subject to Section 3.12.
For the purposes of this Article Three, (a) no Guarantor
Senior Indebtedness shall be deemed to have been paid in full unless and until
all commitments or other obligations of the holders of the Senior Indebtedness
thereunder to make advances or otherwise extend credit shall have terminated and
the holders thereof shall have indefeasibly received payment in full in cash or
Cash Equivalents, and (b) the term "Guarantor Senior Representative" shall mean
the indenture trustee or other trustee, agent or representative for any
Guarantor Senior Indebtedness.
7
SECTION 3.02. Distribution on Dissolution, Liquidation,
Bankruptcy or Reorganization. Upon any distribution of assets of Multicare upon
any total or partial dissolution, winding up, liquidation or reorganization of
Multicare, whether in bankruptcy, insolvency, reorganization or receivership
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of Multicare or otherwise,
(a) the holders of Guarantor Senior Indebtedness shall be
entitled to receive payment in full in cash or Cash Equivalents or, as
acceptable to each holder of Guarantor Senior Indebtedness, in any
other manner, of all amounts and obligations due on or in respect of
all Guarantor Senior Indebtedness before the Holders are entitled to
receive any payment or distribution of any kind or character (excluding
securities of Multicare provided for in a plan of reorganization with
respect to Multicare approved by the bankruptcy court that are equity
securities or are subordinated in right of payment to all Guarantor
Senior Indebtedness to the same extent as, or to a greater extent than,
the Multicare Senior Subordinated Guaranty is so subordinated as
provided in this Article; such securities are hereinafter collectively
referred to as "Multicare Permitted Junior Notes") on account of
principal of, premium, if any, or interest on the Notes (including any
payment or other distribution which may be received from the holders of
Guarantor Subordinated Indebtedness as a result of any payment on such
Guarantor Subordinated Indebtedness);
(b) any payment or distribution of assets of Multicare or any
Subsidiary of Multicare of any kind or character, whether in cash,
property or securities (excluding Multicare Permitted Junior Notes), by
set-off or otherwise, to which the Holders or the Trustee would be
entitled but for the provisions of this Article (including any payment
or other distribution which may be received from the holders of
Guarantor Subordinated Indebtedness as a result of any payment on such
Guarantor Subordinated Indebtedness) shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Guarantor Senior Indebtedness or
their Guarantor Senior Representative or Representatives, ratably
according to the aggregate amounts remaining unpaid on account of the
Guarantor Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash, Cash Equivalents or
in any other form acceptable to each, of all Guarantor Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Guarantor Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 3.02, the Trustee or any Holder shall have
received any payment or distribution of assets of Multicare or any
Subsidiary of Multicare of any kind or character, whether in cash,
property or securities (excluding Multicare Permitted Junior Notes), in
respect of principal, premium, if any, and interest on the Notes before
all Guarantor Senior
8
Indebtedness is paid in full in cash, then and in such event, such
payment or distribution (including any payment or other distribution
which may be received from the holders of Guarantor Subordinated
Indebtedness as a result of any payment on such Guarantor Subordinated
Indebtedness) shall be paid over or delivered forthwith to the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of
Multicare for application to the payment of all Guarantor Senior
Indebtedness remaining unpaid to the extent necessary to pay all
Guarantor Senior Indebtedness in full in cash, Cash Equivalents or, as
acceptable to each holder of Guarantor Senior Indebtedness, any other
manner, after giving effect to any concurrent payment or distribution
to or for the holders of Guarantor Senior Indebtedness or deposited
with a court of competent jurisdiction.
The consolidation of Multicare with, or the merger of
Multicare into, another corporation or the liquidation or dissolution of
Multicare following the sale or conveyance of its property or assets as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Five of the Indenture shall not be deemed a
dissolution, winding up, liquidation or reorganization of Multicare for the
purposes of this Article Three if such other corporation shall, as a part of
such consolidation, merger, sale or conveyance, comply with the conditions
stated in Article Five of the Indenture.
If the Trustee or any Holder does not file a proper claim or
proof of debt in the form required in any proceeding referred to above prior to
30 days before the expiration of the time to file such claim in such proceeding,
then the holder of any Guarantor Senior Indebtedness (or its Guarantor Senior
Representative) is hereby authorized, and has the right, to file an appropriate
claim or claims for or on behalf of such Holder.
SECTION 3.03. Suspension of Payment When Guarantor Senior
Indebtedness in Default. (a) Unless Section 3.02 shall be applicable, upon the
occurrence of a Payment Default in respect of Guarantor Designated Senior
Indebtedness, then no payment or distribution of any assets of Multicare or any
Subsidiary of Multicare of any kind or character (excluding Multicare Permitted
Junior Notes) shall be made by Multicare or any Subsidiary of Multicare or on
behalf of or out of the property of Multicare, or received by the Trustee or any
Holder on account of principal of, premium, if any, or interest on, the Notes or
on account of the purchase, redemption, defeasance (whether under Section 8.02
or 8.03 of the Indenture) or other acquisition of or in respect of the Notes
unless and until such Payment Default shall have been cured or waived in writing
by the holders of the Guarantor Designated Senior Indebtedness or shall have
ceased to exist or the Guarantor Designated Senior Indebtedness shall have been
paid in full in cash, Cash Equivalents or in any other manner as acceptable to
each holder of such Guarantor Designated Senior Indebtedness, after which
Multicare shall resume making any and all required payments in respect of the
Notes, including any missed payments.
9
(b) Unless Section 3.02 shall be applicable, upon (i) the
occurrence of a Non-payment Default pursuant to which the maturity of the
applicable Designated Senior Indebtedness may be accelerated in respect of
Guarantor Designated Senior Indebtedness, either iimmediately or upon the giving
of notice, the passage of time, or both, and (ii) receipt by the Trustee and
Multicare from a Guarantor Senior Representative or the holder of any Guarantor
Designated Senior Indebtedness of written notice of such occurrence, no payment
(other than any payments made pursuant to Section 8.02 or 8.03 of the Indenture
or from the money or proceeds of U.S. Government Securities held under the
Escrow Agreement as provided in Section 10.01 of the Indenture) or distribution
of any assets of Multicare or any Subsidiary of Multicare thereof of any kind or
character (excluding Multicare Permitted Junior Notes) shall be made by
Multicare or any Subsidiary of Multicare thereof or on behalf of or out of the
property of Multicare or any Subsidiary of Multicare, or received by the Trustee
or any Holder on account of any principal of, premium, if any, or interest on,
the Notes (including payments under any guaranty thereof) or on account of the
purchase, redemption or other acquisition of or in respect of Notes (including
payments under any guaranty thereof) for a period ("Payment Blockage Period")
commencing on the date of receipt by the Trustee of such notice until the
earliest of (x) 179 days after receipt of such written notice by the Trustee
(provided any Guarantor Designated Senior Indebtedness as to which notice was
given shall theretofore have not been accelerated), (y) the date such
Non-payment Default and all other Non-payment Defaults as to which notice is
also given after such period is initiated shall have been cured or waived in
writing by the holders of the Guarantor Designated Senior Indebtedness or shall
have ceased to exist or the Guarantor Senior Indebtedness related thereto shall
have been paid in full in cash or Cash Equivalents or (z) the date such Payment
Blockage Period and any Payment Blockage Periods initiated during such period
shall have been terminated by written notice to Multicare or the Trustee from
the Guarantor Senior Representative and the holders of the Guarantor Designated
Senior Indebtedness that have given notice of a Non-payment Default at or after
the initiation of such Payment Blockage Period, after which in the case of
clause (x), (y) or (z), Multicare shall resume making any and all required
payments in respect of the Notes including any missed payments. Notwithstanding
any other provision of this Supplemental Indenture, in no event shall a Payment
Blockage Period extend beyond 179 days from the date of the receipt by Multicare
or the Trustee of the notice referred to in clause (ii) of this paragraph (b)
(the "Initial Blockage Period"). Not more than one Payment Blockage Period may
be commenced with respect to the Notes during any period of 360 consecutive
days; provided that subject to the limitations set forth in the next sentence,
the commencement of a Payment Blockage Period by the representative of Guarantor
Designated Senior Indebtedness other than the Credit Facility shall not bar the
commencement of another Payment Blockage Period by the representative for the
Credit Facility within such period of 360 consecutive days. Notwithstanding
anything in this Supplemental Indenture to the contrary, there must be 180 days
in any 360-day period in which no Payment Blockage Period is in effect. No event
of default (other than an event of default pursuant to the financial maintenance
covenants under the Credit Facility) that existed or was continuing (it being
acknowledged that any subsequent action that would give rise to an event of
default pursuant to any provision under which an event of default previously
existed or was
10
continuing shall constitute a new event of default for this purpose) on the date
of commencement of any Payment Blockage Period with respect to the Guarantor
Designated Senior Indebtedness initiating such Payment Blockage Period shall be,
or shall be made, the basis for the commencement of a second Payment Blockage
Period by the representative for, or the holders of, such Guarantor Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing,
Multicare or any of its Subsidiaries shall make, or the Trustee or any Holder
shall receive, any payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to a Guarantor Senior Representative of the
holders of the Guarantor Designated Senior Indebtedness.
SECTION 3.04. Payment Permitted If No Default. Nothing
contained in this Article, in the Indenture or in any of the Notes shall prevent
Multicare, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of Multicare referred to
in Section 3.02 of this Supplemental Indenture and Section 11.02 of the
Indenture or under the conditions described in Section 3.03 of this Supplemental
Indenture and Section 11.03 of the Indenture, from making payments at any time
of principal of, premium, if any, or interest on the Notes.
SECTION 3.05. Subrogation to Rights of Holders of Guarantor
Senior Indebtedness. Subject to the payment in full of all Guarantor Senior
Indebtedness, Holders shall be subrogated to the rights of the holders of such
Guarantor Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Guarantor Senior Indebtedness until
the principal of, premium, if any, and interest on the Notes shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of Guarantor Senior Indebtedness of any cash, property or securities to
which the Holders or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to
the holders of Guarantor Senior Indebtedness by Holders or the Trustee, shall,
as among Multicare, its creditors other than holders of Guarantor Senior
Indebtedness, and the Holders, be deemed to be a payment or distribution by
Multicare to or on account of the Guarantor Senior Indebtedness.
SECTION 3.06. Provisions Solely to Define Relative Rights. The
provisions of this Article 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 on the other hand. Nothing contained herein or in the
Indenture or in the Notes is intended to or shall (i) impair, as among
Multicare, its creditors other than holders of Guarantor Senior Indebtedness and
the Holders, the obligation of Multicare, which is absolute and unconditional,
to pay to the Holders the
11
principal of, premium, if any, and interest on the Notes under this Multicare
Senior Subordinated Guaranty in accordance with its terms; or (ii) affect the
relative rights against Multicare of the Holders and creditors of Multicare
other than their rights in relation to the holders of Guarantor Senior
Indebtedness; or (iii) prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon Default under the Indenture,
subject to the rights, under this Article of the holders of Guarantor Senior
Indebtedness to receive distributions and payments otherwise payable to Holders
(A) in any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of Multicare referred to in Section 3.02 of this Supplemental
Indenture, to receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder, or (B) under the conditions specified in Section 3.03 of this
Supplemental Indenture, to prevent any payment prohibited by such Section or
enforce their rights pursuant to Section 3.03(c) of this Supplemental Indenture.
SECTION 3.07. Trustee to Effectuate Subordination. Each Holder
by his or her acceptance thereof authorizes and directs the Trustee on his or
her behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article and appoints the Trustee his or her
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of Multicare whether in
bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the indebtedness of Multicare owing
to such Holder in the form required in such proceedings and the causing of such
claim to be approved. If the Trustee does not file a proper claim at least 30
days before the expiration of the time to file such claim, then the holders of
Guarantor Senior Indebtedness, and their agents, trustees or other
representatives are authorized to do so for and on behalf of the Holders.
SECTION 3.08. No Waiver of Subordination Provisions. (a) No
right of any present or future holder of any Guarantor Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of Multicare or
any Holder or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by Multicare or any Holder with the terms, provisions
and covenants of this Supplemental Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section, the holders of Guarantor Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders,
without incurring responsibility to the Holders and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders to the holders of Guarantor Senior Indebtedness, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, or waive compliance with
the terms of, Guarantor Senior
12
Indebtedness or any instrument evidencing the same or any agreement under which
Guarantor Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Indebtedness; (iii) release any Person liable in any manner for
the collection or payment of Guarantor Senior Indebtedness; (iv) exercise or
refrain from exercising any rights against Multicare and any other Person; (v)
amend, supplement, restate or otherwise modify or restructure the Guarantor
Senior Indebtedness; and (vi) otherwise deal with any Person liable on account
of Guarantor Senior Indebtedness; provided, however, that in no event shall any
such actions limit the right of the Holders to take any action to accelerate the
maturity of the Notes pursuant to Article Six of the Indenture or to pursue any
rights or remedies thereunder or under applicable laws if the taking of such
action does not otherwise violate the terms of this Article, subject to the
rights, if any, under this Article, of the holders, from time to time, of
Guarantor Senior Indebtedness to receive the cash, property or securities
receivable upon the exercise of such rights or remedies.
SECTION 3.09. Notice to Trustee. (a) Multicare shall give
prompt written notice to the Trustee of any fact known to Multicare which would
prohibit the making of any payment to or by the Trustee in respect of the Notes.
Notwithstanding the provisions of this Article or any provision of the
Indenture, the Trustee or any Paying Agent shall not be charged with knowledge
of the existence of any facts which would prohibit the making of any payment to
or by the Trustee or any Paying Agent in respect of the Notes, unless and until
the Trustee shall have received written notice thereof from Multicare, a holder
of Senior Indebtedness or a holder of Guarantor Senior Indebtedness or from a
Guarantor Senior Representative or any trustee, fiduciary or agent therefor;
and, prior to the receipt of any such written notice, the Trustee shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of, premium, if any, or interest on any
Note), then, anything herein contained to the contrary notwithstanding but
without limiting the rights and remedies of the holders of Guarantor Senior
Indebtedness or any trustee, fiduciary or agent thereof, the Trustee shall have
full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date; nor shall the Trustee be charged with knowledge of the
elimination of the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to
it of a written notice to the Trustee and Multicare by a Person representing
himself to be a Guarantor Senior Representative or a holder of Guarantor Senior
Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a Guarantor Senior Representative or a holder of
Guarantor Senior Indebtedness (or a trustee, fiduciary or agent thereof and the
Trustee shall have no duty to investigate the authenticity thereof or the
authority of the person
13
signing and shall have no liability for relying thereon); provided, however,
that failure to give such notice to Multicare shall not affect in any way the
ability of the Trustee to rely on such notice. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Guarantor Senior Indebtedness to participate
in any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Guarantor Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article,
and if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment or the Trustee or the Paying Agent may deposit the funds in
question with a court of competent jurisdiction.
SECTION 3.10. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of Multicare
referred to in this Article, the Trustee and the Holders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of Guarantor Senior Indebtedness and other
indebtedness of Multicare, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article, provided that the foregoing shall apply only if such court has
been fully apprised of the provisions of this Article.
SECTION 3.11. Rights of Trustee as a Holder of Guarantor
Senior Indebtedness; Preservation of Trustee's Rights. The Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Guarantor Senior Indebtedness which may at any time
be held by it, to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Supplemental Indenture shall deprive the
Trustee of any of its rights as such holder of Guarantor Senior Indebtedness.
Nothing in this Article shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.07 of the Indenture.
SECTION 3.12. Trust Moneys and Escrowed Funds Not
Subordinated. Notwithstanding anything contained herein to the contrary,
payments from (x) money or the proceeds of U.S. Government Obligations held in
trust under Article Eight by the Trustee for the payment of principal of,
premium, if any, and interest on the Notes (provided that at the time deposited,
such deposit did not violate any then outstanding Guarantor Senior Indebtedness)
and (y) money or the proceeds of U.S. Government Securities held under the
Escrow Agreement shall not be subordinated to the prior payment of any Guarantor
Senior Indebtedness or subject
14
to the restrictions set forth in this Article Three, and none of the Holders
shall be obligated to pay over any such amount to any holder of Guarantor Senior
Indebtedness.
SECTION 3.13. No Suspension of Remedies. Nothing contained in
this Article shall limit the right of the Trustee or the Holders to take any
action to accelerate the maturity of the Notes pursuant to Article Six of the
Indenture or to pursue any rights or remedies hereunder or under applicable law,
subject to the rights, if any, under this Article of the holders, from time to
time, of Guarantor Senior Indebtedness to receive the cash, property or
securities receivable upon the exercise of such rights or remedies.
SECTION 3.14. Trustee's Relation to Guarantor Senior
Indebtedness. With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Article against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness.
SECTION 3.15. Other Rights of Holders of Guarantor Senior
Indebtedness. All rights and interests under this Supplemental Indenture of the
holders of Guarantor Senior Indebtedness, and all agreements and obligations of
the Trustee, the Holders and Multicare under this Article shall remain in full
force and effect irrespective of (i) any lack of validity or enforceability of
the Credit Facility, and promissory notes evidencing the Credit Facility or any
other agreement or instrument relating thereto or to any Guarantor Senior
Indebtedness or (ii) any other circumstance that might constitute a defense
available to, or a discharge of, a guarantor or surety (other than as a result
of any payments indefeasibly made on the Credit Facility or any Guarantor Senior
Indebtedness).
The holders of Guarantor Senior Indebtedness are hereby
authorized to demand specific performance of this Article, whether or not
Multicare shall have complied with any provisions of this Article applicable to
it, at any time when the Trustee or any Holder shall have failed to comply with
any of these provisions.
The provisions of this Article shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Guarantor Senior Indebtedness is rescinded or must otherwise be returned by any
holder of Guarantor Senior Indebtedness upon the insolvency, bankruptcy or
reorganization of Multicare or otherwise, all as though such payment had not
been made.
15
ARTICLE FOUR
EXECUTION AND DELIVERY OF MULTICARE
SENIOR SUBORDINATED GUARANTY
SECTION 4.01. Execution of Multicare Senior Subordinated
Guaranty. (a) To evidence its Multicare Senior Subordinated Guaranty set forth
in this Supplemental Indenture, Multicare hereby agrees that a notation of such
Multicare Senior Subordinated Guaranty substantially in the form of Annex A
hereto shall be endorsed by an officer of Multicare on each Note authenticated
and delivered by the Trustee after the date hereof until consummation of the
Merger.
(b) Notwithstanding the foregoing, Multicare hereby agrees
that the Multicare Senior Subordinated Guaranty set forth herein shall remain in
full force and effect for the term provided herein notwithstanding any failure
to endorse on each Note a notation of such Multicare Senior Subordinated
Guaranty.
(c) If an officer whose signature is on this Supplemental
Indenture or on the Multicare Senior Subordinated Guaranty no longer holds that
office at the time the Trustee authenticates the Note on which a Multicare
Senior Subordinated Guaranty is endorsed, the Multicare Senior Subordinated
Guaranty shall be valid nevertheless.
SECTION 4.02. Delivery and Enforceability of Multicare Senior
Subordinated Guaranty. (a) The delivery of the Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Multicare Senior Subordinated Guaranty set forth in this Supplemental Indenture
on behalf of Multicare.
(b) Multicare hereby agrees that its obligations hereunder
shall be unconditional, regardless of the validity, regularity or enforceability
of the Notes or this Supplemental Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Issuer,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
SECTION 4.03. Waiver of Presentment; Rights and Remedies. (a)
Multicare hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer, protest, notice and all
demands whatsoever and covenants that the Multicare Senior Subordinated Guaranty
made pursuant to this Supplemental Indenture will not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.
(b) If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Supplemental Indenture and such
proceeding has been discontinued
16
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then, and in every such case, subject to any determination in
such proceeding, Multicare, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of Multicare, the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 5.01. Releases upon Release of Multicare Senior
Subordinated Guaranty. Concurrently with the release or discharge of this
Multicare Senior Subordinated Guaranty (other than a release or discharge by or
as a result of payment under such guarantee of Guaranteed Obligations),
Multicare shall automatically be released from and relieved of its obligations
under this Supplemental Indenture. Upon delivery by the Issuer to the Trustee of
an Officers' Certificate to the effect that such release or discharge has
occurred, the Trustee shall execute any documents reasonably required in order
to evidence the release of Multicare from its obligations under this
Supplemental Indenture.
SECTION 5.02. Effect of Supplemental Indenture. Upon the
execution and delivery of this Supplemental Indenture by Multicare, the Issuer
and the Trustee, the Indenture shall be supplemented in accordance herewith, and
this Supplemental Indenture shall form a part of the Indenture for all purposes,
and every Holder heretofore or hereafter authenticated and delivered under the
Indenture shall be bound thereby.
SECTION 5.03. Indenture Remains in Full Force and Effect.
Except as supplemented hereby, all provisions in the Indenture shall remain in
full force and effect.
SECTION 5.04. Indenture and Supplemental Indenture Construed
Together. This Supplemental Indenture is an indenture supplemental to and in
implementation of the Indenture, and the Indenture and this Supplemental
Indenture shall henceforth be read and construed together.
SECTION 5.05. Conflict with Trust Indenture Act. If any
provision of this Supplemental Indenture limits, qualifies or conflicts with any
provision of the Trust Indenture Act that is required under such Act to be part
of and govern any provision of this Supplemental Indenture, the provision of
such Act shall control. If any provision of this Supplemental Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the provision of such Act shall be deemed to apply to the Indenture as
so modified or to be excluded by this Supplemental Indenture, as the case may
be.
17
SECTION 5.06. Separability Clause. In case any provision in
this Supplemental Indenture 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 5.07. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
SECTION 5.08. Benefits of Supplemental Indenture, Etc. Nothing
in this Supplemental Indenture, the Indenture or the Notes express or implied,
shall give to any Person, other than the parties hereto and thereto and their
successors hereunder and thereunder and the Holders, any benefit of any legal or
equitable right, remedy or claim under the Indenture, this Supplemental
Indenture or the Notes.
SECTION 5.09. Successors and Assigns. All covenants and
agreements in this Supplemental Indenture by Multicare shall bind its successors
and assigns, whether so expressed or not.
SECTION 5.10. Certain Duties and Responsibilities of Trustee.
In entering into this Supplemental Indenture, the Trustee shall be entitled to
the benefit of every provision of the Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee, whether or
not elsewhere herein so provided.
SECTION 5.11. Governing Law. This Supplemental Indenture shall
be governed by and construed in accordance with the laws of the State of New
York.
SECTION 5.12. Counterparts. This Supplemental Indenture may be
executed in counterparts, each of which, when so executed, shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
Dated: _____________, 1997 THE MULTICARE COMPANIES, INC.
By: ________________________________
Name:
Title
GENESIS ELDERCARE ACQUISITION
Dated: _____________, 1997 CORP.
By: ________________________________
Name:
Title:
Dated: _____________, 1997 PNC BANK, NATIONAL ASSOCIATION
as Trustee
By: ________________________________
Name:
Title:
ANNEX A TO SUPPLEMENTAL INDENTURE
FORM OF NOTATION OF MULTICARE SENIOR
SUBORDINATED GUARANTY ON NOTE
The Multicare Companies, Inc. ("Multicare"), as primary
obligor and not merely as surety, fully unconditionally and irrevocably
guarantees (a) the due and punctual payment of the principal of, premium, if
any, or interest on the Notes, whether at Stated Maturity or an Interest Payment
Date, by acceleration, call for redemption or otherwise, (b) the due and
punctual payment of interest on the overdue principal and premium of, and
interest on the Notes and (c) that in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, the same will be
promptly paid in full when due in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise.
Notwithstanding the foregoing, in the event that the Multicare
Senior Subordinated Guaranty would constitute or result in a violation of any
applicable fraudulent conveyance or similar law of any relevant jurisdiction,
the liability of Multicare under its Multicare Senior Subordinated Guaranty
shall be limited to such amount as will not, after giving effect thereto, and to
all other liabilities of Multicare, result in such amount constituting a
fraudulent transfer or conveyance.
The Multicare Senior Subordinated Guaranty shall not be valid
or obligatory for any purpose until the certificate of authentication on the
Note upon which the Multicare Senior Subordinated Guaranty is noted shall have
been executed by the Trustee under the Indenture by the manual or facsimile
signature of one of its authorized officers.
THE MULTICARE COMPANIES, INC.
By: ______________________________
Name:
Title: