EXECUTION VERSION
EXHIBIT 4.3
================================================================================
EXTENDICARE HEALTH SERVICES, INC.,
as Issuer
9 1/2% SENIOR NOTES DUE 2010
------------------------------
INDENTURE
Dated as of June 28, 2002
------------------------------
U.S. BANK, N.A.,
as Trustee
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
Section 1.01. Definitions..................................................................1
Section 1.02. Other Definitions...........................................................17
Section 1.03. Incorporation by Reference of Trust Indenture Act...........................17
Section 1.04. Rules of Construction.......................................................18
ARTICLE 2. THE NOTES........................................................................18
Section 2.01. Form and Dating.............................................................18
Section 2.02. Execution and Authentication................................................19
Section 2.03. Registrar and Paying Agent..................................................19
Section 2.04. Paying Agent to Hold Money in Trust.........................................20
Section 2.05. Holder Lists................................................................20
Section 2.06. Transfer and Exchange.......................................................20
Section 2.07. Replacement Notes...........................................................30
Section 2.08. Outstanding Notes...........................................................30
Section 2.09. Treasury Notes..............................................................30
Section 2.10. Temporary Notes.............................................................31
Section 2.11. Cancellation................................................................31
Section 2.12. Defaulted Interest..........................................................31
Section 2.13. CUSIP or ISIN Numbers.......................................................31
Section 2.14. Additional Interest.........................................................31
ARTICLE 3. REDEMPTION AND PREPAYMENT........................................................32
Section 3.01. Notices to Trustee..........................................................32
Section 3.02. Selection of Notes to Be Redeemed...........................................32
Section 3.03. Notice of Redemption........................................................32
Section 3.04. Effect of Notice of Redemption..............................................33
Section 3.05. Deposit of Redemption Price.................................................33
Section 3.06. Notes Redeemed in Part......................................................33
Section 3.07. Optional Redemption.........................................................33
Section 3.08. Mandatory Redemption........................................................34
Section 3.09. Offer To Purchase by Application of Excess Proceeds.........................34
ARTICLE 4. COVENANTS........................................................................35
Section 4.01. Payment of Notes............................................................35
Section 4.02. Maintenance of Office or Agency.............................................36
Section 4.03. Reports.....................................................................36
Section 4.04. Compliance Certificate......................................................37
Section 4.05. Taxes.......................................................................37
i
TABLE OF CONTENTS
PAGE
Section 4.06. Stay, Extension and Usury Laws..............................................37
Section 4.07. Corporate Existence.........................................................38
Section 4.08. Payments for Consent........................................................38
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock..................38
Section 4.10. Restricted Payments.........................................................40
Section 4.11. Liens.......................................................................42
Section 4.12. Asset Sales.................................................................42
Section 4.13. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries...43
Section 4.14. Transactions with Affiliates................................................44
Section 4.15. Sale and Leaseback Transactions.............................................45
Section 4.16. Issuances and Sales of Capital Stock of Restricted Subsidiaries.............46
Section 4.17. Designation of Restricted and Unrestricted Subsidiaries.....................46
Section 4.18. Repurchase at the Option of Holders Upon a Change of Control................46
Section 4.19. Additional Subsidiary Guarantees............................................48
Section 4.20. Designation as "Designated Senior Indebtedness".............................48
Section 4.21. Business Activities.........................................................48
ARTICLE 5. SUCCESSORS.......................................................................48
Section 5.01. Merger, Consolidation, or Sale of Property..................................48
Section 5.02. Successor Corporation Substituted...........................................49
ARTICLE 6. DEFAULTS AND REMEDIES............................................................49
Section 6.01. Events of Default...........................................................49
Section 6.02. Acceleration................................................................50
Section 6.03. Other Remedies..............................................................51
Section 6.04. Waiver of Past Defaults.....................................................51
Section 6.05. Control by Majority.........................................................51
Section 6.06. Limitation on Suits.........................................................52
Section 6.07. Rights of Holders to Receive Payment........................................52
Section 6.08. Collection Suit by Trustee..................................................52
Section 6.09. Trustee May File Proofs of Claim............................................52
Section 6.10. Priorities..................................................................53
Section 6.11. Undertaking for Costs.......................................................53
ARTICLE 7. TRUSTEE..........................................................................53
Section 7.01. Duties of Trustee...........................................................53
Section 7.02. Rights of Trustee...........................................................54
Section 7.03. Individual Rights of Trustee................................................55
ii
TABLE OF CONTENTS
PAGE
Section 7.04. Trustee's Disclaimer........................................................55
Section 7.05. Notice of Defaults..........................................................55
Section 7.06. Reports by Trustee to Holders...............................................55
Section 7.07. Compensation and Indemnity..................................................56
Section 7.08. Replacement of Trustee......................................................56
Section 7.09. Successor Trustee by Merger, etc............................................57
Section 7.10. Eligibility; Disqualification...............................................57
Section 7.11. Preferential Collection of Claims Against Company...........................57
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................................57
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....................57
Section 8.02. Legal Defeasance and Discharge..............................................58
Section 8.03. Covenant Defeasance.........................................................58
Section 8.04. Conditions to Legal or Covenant Defeasance..................................58
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions..............................................59
Section 8.06. Repayment to Company........................................................60
Section 8.07. Reinstatement...............................................................60
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.................................................60
Section 9.01. Without Consent of Holders of Notes.........................................60
Section 9.02. With Consent of Holders of Notes............................................61
Section 9.03. Compliance with Trust Indenture Act.........................................62
Section 9.04. Revocation and Effect of Consents...........................................62
Section 9.05. Notation on or Exchange of Notes............................................62
Section 9.06. Trustee to Sign Amendments, etc.............................................62
ARTICLE 10. SUBSIDIARY GUARANTEES............................................................63
Section 10.01. Guarantee...................................................................63
Section 10.02. Limitation on Subsidiary Guarantor Liability................................64
Section 10.03. Execution and Delivery of Subsidiary Guarantee..............................64
Section 10.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms...............65
Section 10.05. Releases Following Sale of Assets...........................................65
ARTICLE 11. SATISFACTION AND DISCHARGE.......................................................66
Section 11.01. Satisfaction and Discharge..................................................66
Section 11.02. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions..............................................66
Section 11.03. Repayment to Company........................................................66
ARTICLE 12. MISCELLANEOUS....................................................................67
Section 12.01. Trust Indenture Act Controls................................................67
iii
TABLE OF CONTENTS
PAGE
Section 12.02. Notices.....................................................................67
Section 12.03. Communication by Holders of Notes with Other Holders of Notes...............68
Section 12.04. Certificate and Opinion as to Conditions Precedent..........................68
Section 12.05. Statements Required in Certificate or Opinion...............................68
Section 12.06. Rules by Trustee and Agents.................................................68
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders....69
Section 12.08. Governing Law...............................................................69
Section 12.09. No Adverse Interpretation of Other Agreements...............................69
Section 12.10. Successors..................................................................69
Section 12.11. Severability................................................................69
Section 12.12. Counterpart Originals.......................................................69
Section 12.13. Table of Contents, Headings, etc............................................69
iv
TABLE OF CONTENTS
PAGE
EXHIBITS
Exhibit A FORM OF NOTE......................................................A-1
Exhibit B FORM OF CERTIFICATE OF TRANSFER...................................B-1
Exhibit C FORM OF CERTIFICATE OF EXCHANGE...................................C-1
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR.................................D-1
Exhibit E FORM OF NOTATION OF GUARANTEE.....................................E-1
v
EXECUTION VERSION
This INDENTURE dated as of June 28, 2002, is by and among
Extendicare Health Services, Inc., a Delaware corporation (the "Company"), the
Subsidiary Guarantors listed on the signature pages hereto, and U.S. Bank, N.A.,
as trustee (the "Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree
as follows for the benefit of each other and for the equal and ratable benefit
of the Holders of the 9 1/2% Senior Notes due 2010 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
-----------
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
"144A Global Note" means the global note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Additional Notes" means any Notes (other than Initial Notes
and Exchange Notes) issued under this Indenture in accordance with Sections 2.02
and 4.09 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"Applicable Procedures" means, with respect to any transfer,
redemption or exchange of or for beneficial interests in any Global Note, the
rules and procedures of the Depositary, Euroclear and Clearstream that apply to
such transfer, redemption or exchange.
"Asset Sale" means the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, (x) a sale
and leaseback, (y) the issuance, sale or other transfer of any Equity Interests
in any of our Unrestricted Subsidiaries, and (z) the receipt of proceeds of
insurance paid on account of the loss of or damage to any asset and awards of
compensation for any asset taken by condemnation, eminent domain or similar
proceeding, and including the receipt of proceeds of business interruption
insurance) in each case, in one or a series of related transactions that have a
fair market value in excess of $1.0 million or for Net Proceeds in excess of
$1.0
million; provided that the sale, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by Section 4.18 and/or Section 5.01 and not by
Section 4.12.
Notwithstanding the preceding, the following items will not be
deemed to be Asset Sales:
(1) the sale, lease or other disposition of equipment,
inventory, accounts receivable or other assets or rights in the ordinary course
of business;
(2) a transfer of assets or rights by the Company to a
Subsidiary Guarantor, or by a Subsidiary Guarantor to the Company or to another
Subsidiary Guarantor;
(3) an issuance of Equity Interests by a Subsidiary
Guarantor to the Company or to another Subsidiary Guarantor;
(4) a Restricted Payment or Permitted Investment that is
permitted by Section 4.10;
(5) the sale of property or equipment that has become worn
out, obsolete or damaged;
(6) the sale or other disposition of Cash Equivalents;
(7) the sale of accounts receivable pursuant to a
Securitization Transaction; or
(8) the designation of any Restricted Subsidiary as an
Unrestricted Subsidiary or the contribution to the capital of any Unrestricted
Subsidiary in accordance with the provisions described under Section 4.17.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the greater of (a) the fair
value of the property subject to such arrangement (as determined in good faith
by the Board of Directors of the Company) or (b) the present value (discounted
at the interest rate borne by the Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such sale and leaseback transaction, including any period for
which such lease has been extended or may, at the option of the lessor, be
extended.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal, state or foreign law for the relief of debtors.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the board of directors of
the general partner of the partnership; and
(3) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the applicable Person to have been
duly adopted by the Board of Directors of such Person and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means any day other than a Legal Holiday.
2
"Capital Lease Obligation" means, at the time any
determination is to be made, the amount of the liability in respect of a capital
lease that would at that time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means:
(1) in the case of a corporation, any and all shares,
including common stock and preferred stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality of the
United States government (provided that the full faith and credit of the United
States is pledged in support of those securities) having maturities of not more
than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or with
any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Rating Services and in each
case maturing within six months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition.
"Change of Control" means the occurrence of any of the
following:
(1) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture);
(2) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of the
Company (whether or not otherwise in compliance with the provisions of this
Indenture);
3
(3) any Person or Group (other than Parent or any direct or
indirect wholly owned Subsidiary of Parent) becomes the owner, directly or
indirectly, beneficially or of record, of shares representing more than 35% of
the aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Company on a fully-diluted basis;
(4) the replacement of a majority of the Board of Directors of
Parent or the Company over a two-year period from the directors who constituted
the Board of Directors of Parent or the Company, as applicable, at the beginning
of such period, and such replacement shall not have been approved by a vote of
at least a majority of the Board of Directors of Parent or the Company, as
applicable, then still in office who either were members of such Board of
Directors at the beginning of such period or whose election as a member of such
Board of Directors was previously so approved; or
(5) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the Company's
outstanding Voting Stock or the outstanding Voting Stock of such other Person is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the Company's Voting Stock outstanding immediately
prior to such transaction is converted into or exchanged for Voting Stock (other
than Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance).
"Clearstream" means Clearstream Banking S.A. and any successor
thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Cash Flow" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period plus:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Subsidiaries in connection with an
Asset Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course of
business,
in each case, on a consolidated basis and determined in accordance with GAAP.
4
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted Subsidiary of
the Person;
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders; and
(3) the cumulative effect of a change in accounting principles
will be excluded.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Consolidated Senior Debt Leverage Ratio" means the ratio of
(1) consolidated Indebtedness of the Company and its Restricted Subsidiaries
(other than Subordinated Indebtedness) as of the date of the transaction giving
rise to the need to calculate such Consolidated Senior Debt Leverage Ratio to
(2) Consolidated Cash Flow for the four full fiscal quarters immediately
preceding the date of the transaction giving rise to the need to calculate such
Consolidated Senior Debt Leverage Ratio taken as one period.
"Consolidated Tangible Assets" means the total assets, less
goodwill and other intangibles, shown on the Company's most recent consolidated
balance sheet, determined on a consolidated basis in accordance with GAAP less
all write-ups (other than write-ups in connection with acquisitions) subsequent
to the date of this Indenture in the book value of any asset (except any such
intangible assets) owned by the Company or any of its Restricted Subsidiaries.
"Credit Agreement" means that certain Credit Agreement, dated
as of the date hereof, by and among Extendicare Holdings, Inc., the Company,
Lehman Commercial Paper Inc., as administrative agent, and the lenders party
thereto, including any related notes, guarantees, security and collateral
documents, instruments and agreements executed in connection therewith.
"Credit Facilities" means one or more debt facilities or
agreements (including, without limitation, the Credit Agreement) or commercial
paper facilities, in each case with banks or other lenders providing for
revolving credit loans, term loans, notes, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded,
replaced, restructured, restated or refinanced (including any agreement to
extend the maturity thereof and adding additional borrowers or guarantors) in
whole or in part from time to time under the same or any other agent, lender or
group of lenders and including increasing the amount of available borrowings
thereunder; provided that such increase is permitted by Section 4.09.
"Custodian" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as Custodian with respect to the Notes, any and all successors thereto
appointed as custodian hereunder and having become such pursuant to the
applicable provisions of this Indenture.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
substantially the form of Exhibit A hereto except that such Note
5
shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
"Designated Non-Cash Consideration" means the fair market
value of total consideration received by the Company or any of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Non-Cash Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, executed by the Company's principal executive
officer and principal financial officer, less the amount of cash or Cash
Equivalents received in connection with the Asset Sale; provided, however, that
the total amount of Designated Non-Cash Consideration outstanding at any one
time does not exceed the greater of $15.0 million and 2.5% of Consolidated
Tangible Assets.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provisions of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the
Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder of the Capital Stock, in whole or in part, on or prior
to the date that is 91 days after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders of the Capital Stock have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.10.
"Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Regulation S.
"Domestic Subsidiary" means any Restricted Subsidiary of the
Company that was formed under the laws of the United States or any state of the
United States or the District of Columbia.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of
the Euroclear systems, and any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture, until such amounts are repaid.
"Fixed Charge Coverage Ratio" means with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Fixed Charges of
such Person and its Restricted Subsidiaries for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other
6
than ordinary working capital borrowings) or issues, repurchases or redeems
preferred stock subsequent to the commencement of the reference period for which
the Fixed Charge Coverage Ratio is being calculated and on or prior to the date
on which the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of preferred stock and the use of the proceeds
therefrom, as if the same had occurred at the beginning of the applicable
four-quarter reference period; provided, however, that the Fixed Charges of such
Person attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis will be computed based on the average
daily balance of such Indebtedness during the four-quarter reference period and
using the interest rate in effect at the end of such period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date will be given pro forma effect (calculated in
accordance with Regulation S-X) as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period will be calculated without giving effect to clause (3) of the proviso set
forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the Calculation
Date.
"Fixed Charges" means, with respect to any specified Person
for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or secured by a Lien on assets of such Person,
whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries other than dividends on Equity Interests
payable solely in Equity Interests of such Person (other than Disqualified
Stock) or to such Person or one of its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such
7
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Global Notes" means the global Notes in the form of Exhibit A
hereto issued in accordance with Article 2 hereof.
"Government Securities" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the Company's option.
"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements;
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates; and
(3) foreign exchange contracts, currency swap agreements or
other agreements or arrangements designed to protect such Person against
fluctuations in currency values.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold to Institutional Accredited Investors, if any.
"Indebtedness" means, with respect to any specified Person,
any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable; or
(6) representing any Hedging Obligations,
8
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will
be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due, in the case
of any other Indebtedness.
"Indenture" means this instrument, as originally executed or
as it may from time to time be supplemented or amended in accordance with
Article 9 hereof.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $150,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that
Investments shall not be deemed to include extensions of trade credit by the
Company or any of its Restricted Subsidiaries on commercially reasonable terms
in accordance with normal trade practices. If the Company or any of its
Subsidiaries sells or otherwise disposes of any Equity Interests of any direct
or indirect Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary of the Company, the
Company will be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.10. The acquisition by the Company or any of its
Subsidiaries of a Person that holds an Investment in a third Person will be
deemed to be an Investment by the Company or such Subsidiary in such third
Person in an amount equal to the fair market value of the Investment held by the
acquired Person in such third Person in an amount determined as provided in the
final paragraph of Section 4.10.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, the city in which the Corporate
Trust Office of the Trustee is located, or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Initial Notes for use by
such Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any
9
option or other agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction.
"Moody's" means Moody's Investors Service, Inc. or any
successor to the rating agency business thereof.
"Net Income" means, with respect to any specified Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection with:
(a) any Asset Sale or (b) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration, including Designated Non-Cash
Consideration, deemed to be cash pursuant to Section 4.12, received in any Asset
Sale), net of the direct costs relating to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,
taxes paid or payable as a result of the Asset Sale, in each case, after taking
into account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness, other than Senior Debt, secured by a Lien on the asset or assets
that were the subject of such Asset Sale, and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness (other than the Notes) of the Company or any of
its Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the Company's stock or assets or the stock or
assets of any of the Company's Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means the Chief Executive Officer, the President,
the Chief Financial Officer, or any Senior Vice President of the Company.
"Officers' Certificate" means a certificate, in form and
substance reasonably satisfactory to the Trustee, signed by two Officers of the
Company, at least one of whom shall be the principal executive officer or
principal financial officer of the Company, and delivered to the Trustee.
10
"Opinion of Counsel" means a written opinion, in form and
substance reasonably satisfactory to the Trustee, from legal counsel who is
acceptable to the Trustee and which meets the requirements of Section 12.05
hereof. The counsel may be an employee of or counsel to the Company or the
Trustee.
"Parent" means Extendicare, Inc., a corporation organized
under the laws of Canada.
"Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream.
"Permitted Business" means the lines of business conducted by
the Company and its Restricted Subsidiaries on the date hereof and the
businesses reasonably related thereto within the healthcare services sector.
"Permitted Investments" means:
(1) any Investment in the Company or in one of its Wholly
Owned Restricted Subsidiaries;
(2) any Investment outstanding as of the date hereof;
(3) any Investment in Cash Equivalents;
(4) loans and advances to employees and officers of the
Company and its Restricted Subsidiaries in the ordinary course of business for
bona fide business purposes not in excess of $1.0 million at any one time
outstanding;
(5) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers' compensation, performance
and other similar deposits;
(6) any Investment by the Company or any of its Restricted
Subsidiaries in a Person engaged in a Permitted Business, if as a result of such
Investment:
(a) such Person becomes one of the Company's Wholly Owned
Restricted Subsidiaries; or
(b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or one of its Wholly Owned
Restricted Subsidiaries;
(7) any Investment made as a result of the receipt of non-cash
consideration (including Designated Non-Cash Consideration) from an Asset Sale
that was made pursuant to and in compliance with Section 4.12;
(8) any acquisition of assets, Equity Interests or other
securities solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company;
(9) any Investments received in compromise of obligations of
such Persons incurred in the ordinary course of trade creditors or customers
that were incurred in the ordinary course of business, including pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of any trade creditor or customer;
(10) Hedging Obligations;
(11) any Investment made in a Special Purpose Vehicle in
connection with a Securitization Transaction or to provide adequate capital to a
Special Purpose Vehicle in anticipation of one or more Securitization
Transactions; and
11
(12) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (12) that are at the time
outstanding, not to exceed $10.0 million.
"Permitted Liens" means:
(1) Liens securing Indebtedness under Credit Facilities,
including the Credit Agreement, where such Indebtedness was permitted by the
terms of this Indenture to be incurred;
(2) Liens in favor of the Company or the Subsidiary
Guarantors;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any of the
Company's Restricted Subsidiaries; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or such Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of
the property by the Company or any of its Restricted Subsidiaries; provided that
such Liens were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of Section 4.09
covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded; provided
that any reserve or other appropriate provision as is required in conformity
with GAAP has been made therefor;
(9) pledges or deposits in the ordinary course of business to
secure lease obligations or nondelinquent obligations under workers'
compensation, unemployment insurance or similar legislation;
(10) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business or assets of the Company
or any of its Subsidiaries incurred in the ordinary course of business;
(11) Liens to secure Hedging Obligations, including any
guarantees of such Hedging Obligations;
(12) Liens incurred in connection with a sale and leaseback
transaction permitted under Section 4.15 that do not exceed 5% of our
Consolidated Tangible Assets; and
(13) Liens incurred by the Company or any of its Restricted
Subsidiaries with respect to obligations that do not exceed $10.0 million at any
one time outstanding; provided that such amount shall be reduced by any amount
incurred under clause (12) above.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
12
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) either
(a) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes (including the Senior Subordinated Notes), such
Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and is subordinated in right of payment to,
the Notes on terms at least as favorable to the Holders of Notes as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; or
(b) with respect to only the Senior Subordinated Notes, at
the time of such incurrence the Company's Consolidated Senior Debt
Leverage Ratio would have been less than 2.75 to 1; provided that when
calculating such ratio, pro forma effect will be given to (A) the
incurrence of such Indebtedness and the application of the proceeds
therefrom, including to refinance the Senior Subordinated Notes and (B)
the acquisition (whether by purchase, merger or otherwise) or
disposition (whether by sale, merger or otherwise) of any company,
entity or business acquired or disposed of by the Company or any of its
Restricted Subsidiaries, as the case may be, since the first day of the
four-quarter period referred to in the definition of Consolidated
Senior Debt Leverage Ratio as if such acquisition or disposition had
occurred at the beginning of such four-quarter period; and
(4) such Indebtedness is incurred either by the Company or by
the Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture
except as otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Qualified Equity Offering" means any underwritten public or
any private offering of Capital Stock (excluding Disqualified Stock) of the
Company or any of Parent's Capital Stock (excluding Disqualified Stock), in the
latter case, only to the extent that the net cash proceeds therefrom are
contributed to the Company's common or non-redeemable preferred equity capital.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof, among the Company, the Subsidiary
Guarantors and the initial purchasers named therein, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means the global note in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with and registered in the name of the
13
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of Notes sold in reliance on Regulation S.
"Replacement Assets" means any properties or assets used or
useful in a Permitted Business.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture 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 Definitive Note" means one or more Definitive
Notes bearing the Private Placement Legend.
"Restricted Global Notes" means the 144A Global Note, the IAI
Global Note and the Regulation S Global Note.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated under the Securities
Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Transaction" means any sale, conveyance or
other disposition by the Company or any of its Restricted Subsidiaries of any
accounts receivable or any interest therein to a Special Purpose Vehicle.
"Senior Debt" means:
(1) all Indebtedness of the Company or of any Subsidiary
Guarantor outstanding under Credit Facilities and all Hedging Obligations with
respect thereto;
(2) any other Indebtedness of the Company or of any Subsidiary
Guarantor permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes or any
Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding,
Senior Debt will not include:
(1) any liability for federal, state, local or other taxes
owed or owing by the Company;
(2) any Indebtedness of the Company to any of its Subsidiaries
or other Affiliates;
(3) any trade payables; or
14
(4) the portion of any Indebtedness that is incurred in
violation of this Indenture.
"Senior Subordinated Note Indenture" means the Indenture,
dated as of December 2, 1997, by and among the Company, the guarantors signatory
thereto and The Bank of Nova Scotia Trust Company of New York, as Trustee,
governing the Company's Senior Subordinated Notes.
"Senior Subordinated Notes" means the 9.35% Senior
Subordinated Notes due 2007 of the Company.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Special Purpose Vehicle" means a bankruptcy-remote entity or
trust or other special purpose entity which is formed by the Company, any
Subsidiary of the Company or any other Person for the purpose of, and engages in
no material business other than, acting as a buyer in a Securitization
Transaction or other similar transactions of accounts receivable or other
similar assets, financing the purchases it makes as such a buyer and realizing,
directly or indirectly, on such accounts receivable or other similar assets.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness (including, without
limitation, a scheduled repayment or a scheduled sinking fund payment), the date
on which the payment of interest or principal was scheduled to be paid in the
original documentation governing such Indebtedness, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness (whether
outstanding on the date hereof or thereafter incurred, including the Senior
Subordinated Notes) that is subordinated or junior in right of payment to the
Notes or the Subsidiary Guarantees pursuant to a written agreement, executed by
the Person to whom such Indebtedness is owed, to that effect.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation, association or
other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person
or (b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee of the Notes by
each of the Subsidiary Guarantors pursuant to Article 10 and in the form of the
Guarantee attached as Exhibit E and any additional Guarantee of the Notes to be
executed by any Subsidiary of the Company pursuant to Section 4.19.
"Subsidiary Guarantors" means all of the Company's existing
and future domestic Significant Subsidiaries, all of the Company's existing and
future Domestic Subsidiaries that guarantee or incur any Indebtedness and any
other existing or future Significant Subsidiaries or Restricted Subsidiaries
that guarantee or otherwise provide direct credit support for Indebtedness of
the Company or any of its Domestic Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended.
15
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Definitive Notes" means one or more Definitive
Notes that do not and are not required to bear the Private Placement Legend.
"Unrestricted Global Notes" means one or more Global Notes, in
the form of Exhibit A attached hereto, that do not and are not required to bear
the Private Placement Legend and are deposited with and registered in the name
of the Depositary or its nominee.
"Unrestricted Subsidiary" means any Subsidiary of the Company
(or any successor to any of them) that is designated by the Board of Directors
of the Company as an Unrestricted Subsidiary pursuant to a Board Resolution, but
only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any of its Restricted Subsidiaries unless the
terms of any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that
is not a director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary will be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the preceding conditions and was
permitted by Section 4.10 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09,
the Company will be in default of such covenant. The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation will be deemed to be an incurrence of
Indebtedness by one of the Company's Restricted Subsidiaries of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under Section 4.09, calculated
on a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; (2) no Default or Event of Default would be in
existence following such designation; and (3) such Subsidiary executes and
delivers to the Trustee a supplemental indenture providing for a Subsidiary
Guarantee.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
16
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such
Indebtedness.
Section 1.02. OTHER DEFINITIONS.
-----------------
Defined in
Term Section
---- -------
"Affiliate Transaction".......................................4.14
"Asset Sale Offer"............................................3.09
"Authentication Order"........................................2.02
"Benefited Party".............................................10.01
"Change of Control Offer".....................................4.18
"Change of Control Purchase Price"............................4.18
"Covenant Defeasance".........................................8.03
"DTC".........................................................2.03
"Event of Default"............................................6.01
"Excess Proceeds".............................................4.12
"incur".......................................................4.09
"Legal Defeasance"............................................8.02
"losses"......................................................7.07
"Offer Amount"................................................3.09
"Offer Period"................................................3.09
"Paying Agent"................................................2.03
"Payment Default".............................................6.01
"Permitted Debt"..............................................4.09
"Purchase Date"...............................................3.09
"Registrar"...................................................2.03
"Restricted Payments".........................................4.10
"Security Register"...........................................4.18
Section 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
-------------------------------------------------
(a) Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this Indenture.
(b) The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
(c) All other terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
under the TIA have the meanings so assigned to them.
17
Section 1.04. RULES OF CONSTRUCTION.
---------------------
(a) Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined herein has
the meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the
plural include the singular;
(v) all references in this instrument to designated
"Articles," "Sections" and other subdivisions are to the designated
Articles, Sections and subdivisions of this instrument as originally
executed;
(vi) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
(vii) "including" means "including without limitation";
(viii) provisions apply to successive events and
transactions; and
(ix) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. FORM AND DATING.
---------------
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, which is
hereby incorporated in and expressly made part of this Indenture. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof. The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.
(b) FORM OF NOTES. The Notes shall be issued initially in
global form and shall be substantially in the form of Exhibit A attached hereto
(including the Global Note Legend thereon and the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of Interests
in the Global Note" attached thereto). Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
18
(c) BOOK-ENTRY PROVISIONS. This Section 2.01(c) shall only
apply to Global Notes deposited with the Trustee, as custodian for the
Depositary. Participants and Indirect Participants shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the
Depositary or by the Trustee as the custodian for the Depositary or under such
Global Note, and the Depositary shall be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company 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 Participants or Indirect Participants, the Applicable Procedures or the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Note.
Section 2.02. EXECUTION AND AUTHENTICATION.
----------------------------
(a) One Officer shall sign the Notes for the Company by manual
or facsimile signature.
(b) If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
(c) A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Note has been authenticated under this Indenture.
(d) The Trustee shall, upon a written order of the Company
signed by an Officer (an "AUTHENTICATION ORDER"), authenticate Notes for
original issue.
(e) The Trustee may appoint an authenticating agent acceptable
to the Company 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 agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
(f) The Company may issue Additional Notes from time to time
after the offering of the Initial Notes. The Initial Notes, the Exchange Notes
and any Additional Notes subsequently issued under this Indenture shall be
treated as a single class for all purposes under this Indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.
Section 2.03. REGISTRAR AND PAYING AGENT.
--------------------------
(a) The Company shall maintain an office or agency where Notes
may be presented for registration of transfer or for exchange ("REGISTRAR") and
an office or agency where Notes may be presented for payment ("PAYING AGENT").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
(b) The Company initially appoints The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.
19
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
-----------------------------------
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium, if any, or interest and Additional Interest, if
any, on the Notes, and shall notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. HOLDER LISTS.
------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each Interest Payment Date and at such other times as
the Trustee may request in writing, a list in such form and as of such date or
such shorter time as the Trustee may allow, as the Trustee may reasonably
require of the names and addresses of the Holders and the Company shall
otherwise comply with TIA ss. 312(a).
Section 2.06. TRANSFER AND EXCHANGE.
---------------------
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (1) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary or (2) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and deliver a written notice to such effect to the Trustee;
or (3) an Event of Default shall have occurred and be continuing. Upon the
occurrence of any of the preceding events in (1), (2) or (3) above, Definitive
Notes shall be issued in denominations of $1,000 or integral multiples thereof
and in such names as the Depositary shall instruct the Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or
in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06
or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either clause (i) or (ii) below, as applicable, as well as one
or more of the other following clauses, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Distribution
Compliance Period, transfers of beneficial interests in the Regulation
S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to
Persons who take delivery thereof in the form of a
20
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A)(1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and
(2) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be
credited with such increase or (B)(1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in
(B)(1) above. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter
of Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) Transfer of Beneficial Interests in a Restricted Global
Note to Another Restricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another
Restricted Global Note if the transfer complies with the requirements
of Section 2.06(b)(ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if
applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may
be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
21
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a broker-dealer pursuant to
the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this clause (D), if the
Registrar and the Company so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to clause (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
clause (B) or (D) above.
(v) Transfer or Exchange of Beneficial Interests in Unrestricted
Global Notes for Beneficial Interests in Restricted Global Notes
Prohibited. Beneficial interests in an Unrestricted Global Note cannot
be exchanged for, or transferred to Persons who take delivery thereof
in the form of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in
item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904, a certificate
22
to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in clauses (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3)(d) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall mail or deliver such Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a broker-dealer pursuant to
the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
23
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for an Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this clause (D), if the
Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company shall execute and
the Trustee shall authenticate and mail or deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination
or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall mail or
deliver such Definitive Notes to the Persons in whose names such Notes
are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall not
bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (2) thereof;
24
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in clauses (B) through (D) above,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3)(d) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case
of clause (B) above, the 144A Global Note, in the case of clause (C)
above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a broker-dealer pursuant to
the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof;
25
and, in each such case set forth in this clause (D), if the
Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the clauses in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of
the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Unrestricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
(iv) Transfer or Exchange of Unrestricted Definitive Notes to
Beneficial Interests in Restricted Global Notes Prohibited. An
Unrestricted Definitive Note cannot be exchanged for, or transferred
to Persons who take delivery thereof in the form of, beneficial
interests in a Restricted Global Note.
(v) Issuance of Unrestricted Global Notes. If any such exchange
or transfer from a Definitive Note to a beneficial interest is
effected pursuant to clauses (ii)(B), (ii)(D) or (iii) above at a time
when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
26
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) any such transfer is effected by a broker-dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof;
or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this clause (D), if the
Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Registrar and the Company to the
effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (A) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (B) Unrestricted Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes tendered for acceptance by Persons who made the
foregoing certification and accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and mail or deliver to the Persons designated by the Holders of
Restricted Definitive Notes so accepted Unrestricted Definitive Notes in the
appropriate principal amount.
27
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by clause (B) below, each Global
Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF (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" PURSUANT TO
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
PRIOR TO (A) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WERE THE OWNERS OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE)
AND (B) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE
"RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (I) TO THE COMPANY, (II) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (III) FOR SO LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (IV) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT OR (V) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, AND THE
REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (IV) OR (V) TO REQUIRE THAT AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE TRUSTEE
AND THE REGISTRAR IS COMPLETED AND DELIVERED BY THE TRANSFEROR. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. 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.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to clauses (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this
Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
28
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or cancelled in whole and not in part, each such Global Note shall be returned
to or retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate Global
Notes and Definitive Notes upon the Company's order or at the
Registrar's request.
(ii) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 4.12, 4.18 and
9.05 hereof).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(iv) Neither the Registrar nor the Company shall be required (A)
to issue, to register the transfer of or to exchange any Notes during
a period beginning at the opening of business 15 days before the day
of any selection of Notes for redemption under Section 3.02 hereof and
ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest
Payment Date.
(v) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
interest on such Notes and for
29
all other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section
2.06 to effect a registration of transfer or exchange may be submitted
by facsimile.
(viii) The Trustee is hereby authorized to enter into a letter
of representation with the Depositary in the form provided by the
Company and to act in accordance with such letter.
Section 2.07. REPLACEMENT NOTES.
-----------------
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.08. OUTSTANDING NOTES.
-----------------
(a) The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.
(b) If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced note is held by a bona fide purchaser.
(c) If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
(d) If the Paying Agent (other than the Company, a Subsidiary
or an Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. TREASURY NOTES.
--------------
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
30
Section 2.10. TEMPORARY NOTES.
---------------
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. CANCELLATION.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee upon direction by the Company and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirements of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12. DEFAULTED INTEREST.
------------------
If the Company defaults in a payment of interest or Additional
Interest, if any, on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Section 2.13. CUSIP OR ISIN NUMBERS.
---------------------
The Company in issuing the Notes may use "CUSIP" or "ISIN"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" or
"ISIN" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may 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 a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" or "ISIN" numbers.
Section 2.14. ADDITIONAL INTEREST.
-------------------
If Additional Interest is payable by the Company pursuant to
the Registration Rights Agreement and paragraph 1 of the Notes, the Company
shall deliver to the Trustee a certificate to that effect stating (i) the amount
of such Additional Interest that is payable and (ii) the date on which such
interest is payable. Unless and until a Responsible Officer of the Trustee
receives such a certificate or instruction or direction from the Holders in
accordance with the terms of the Indenture, the Trustee may assume without
inquiry that no Additional Interest is payable. The foregoing shall not
prejudice the rights of the Holders with respect to their entitlement to
Additional Interest as otherwise set forth in this Indenture or the Notes and
pursuing any action against the Company directly or otherwise directing the
Trustee to take any such action in accordance with the terms of this Indenture
and the Notes. If the Company has paid Additional Interest directly to the
persons entitled to it, the Company shall deliver to the Trustee a certificate
setting forth the particulars of such payment.
31
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. NOTICES TO TRUSTEE.
------------------
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. 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 among the Holders of the Notes
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. NOTICE OF REDEMPTION.
--------------------
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address, except that redemption notices may be mailed more than 60
days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes pursuant to Article 8 hereof or a satisfaction and
discharge of this Indenture pursuant to Article 11.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price or if the redemption is made pursuant
to Section 3.07(b) a calculation of the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest and Additional Interest, if any, on Notes called
for redemption ceases to accrue on and after the redemption date;
32
(g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days, or such shorter
period allowed by the Trustee, prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in this Section 3.03.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
------------------------------
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
---------------------------
On or before 11:00 a.m. on any redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest and Additional Interest, if any, on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest and Additional Interest, if any, on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest and Additional Interest,
if any, shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after an interest record date but on or
prior to the related Interest Payment Date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close
of business on such record date. If any Note called for redemption shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest and Additional Interest, if any,
shall be paid on the unpaid principal from the redemption date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
Section 3.06. NOTES REDEEMED IN PART.
----------------------
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.07. OPTIONAL REDEMPTION.
-------------------
(a) Except as set forth in clause (b) of this Section 3.07,
the Notes will not be redeemable at the option of the Company prior to July 1,
2006. Starting on July 1, 2006, the Company may redeem all or a part of the
Notes after giving the required notice under this Indenture. The Notes may be
redeemed at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Additional Interest, if
any, on the Notes redeemed, to the applicable redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant Interest Payment Date), if redeemed during the twelve-month period
beginning on July 1 of the years indicated below:
33
Year Percentage
---- ----------
2006.......................................................104.750%
2007.......................................................102.375%
2008 and thereafter........................................100.000%
(b) At any time and from time to time prior to July 1, 2005,
the Company may redeem up to 35% of the aggregate principal amount of the Notes
issued under this Indenture at a redemption price equal to 109.500% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date) with the net cash proceeds of any Qualified Equity
Offering of the Company's common stock; provided, however, that after giving
effect to any such redemption, at least 65% of the aggregate principal amount of
the Notes issued under this Indenture (excluding Notes held by the Company and
its Subsidiaries) remains outstanding immediately after the occurrence of such
redemption. Any such redemption shall be made within 90 days of the closing of
such Qualified Equity Offering.
(c) Any prepayment pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08. MANDATORY REDEMPTION.
--------------------
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
Section 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS
(a) In the event that, pursuant to Section 4.12 hereof, the
Issuer shall be required to commence an offer to all Holders to purchase Notes
(an "ASSET SALE OFFER"), it shall follow the procedures specified below.
(b) The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "OFFER PERIOD"). No
later than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Issuer shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.12 hereof (the "OFFER AMOUNT")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related Interest Payment Date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of the Asset Sale Offer, the Issuer
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.12 hereof and the length of time the Asset
Sale Offer shall remain open;
(ii) the Offer Amount, the purchase price and the Purchase Date;
(iii) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(iv) that, unless the Issuer defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest and Additional Interest, if any, after the
Purchase Date;
34
(v) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(vi) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Issuer,
a depositary, if appointed by the Issuer, or a Paying Agent at the
address specified in the notice at least three days before the
Purchase Date;
(vii) that Holders shall be entitled to withdraw their election
if the Issuer, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Note purchased;
(viii) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Issuer shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Issuer so that only
Notes in denominations of $1,000 or integral multiples thereof shall
be purchased); and
(ix) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Issuer shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Issuer in
accordance with the terms of this Section 3.09. The Issuer, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five Business Days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Issuer for purchase, and the Issuer shall
promptly issue a new Note, and the Trustee, upon written request from the Issuer
shall authenticate and mail or deliver such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Issuer to the
Holder thereof. The Issuer shall publicly announce the results of the Asset Sale
Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Section 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01. PAYMENT OF NOTES.
----------------
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest and Additional
Interest, if any, shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest and Additional Interest, if any, then due. The Company
shall pay Additional Interest, if any, in the same manner, on the dates and in
the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per
35
annum in excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful.
Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
-------------------------------
(a) The Company shall maintain an office or agency (which may
be an office or drop facility of the Trustee or an affiliate of the Trustee,
Registrar or co-registrar) where Notes may be presented or surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
(b) The Company 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. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
(c) The Company hereby designates the Corporate Trust Office
of the Trustee, as one such office, drop facility or agency of the Company in
accordance with Section 2.03.
Section 4.03. REPORTS.
-------
(a) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as
any Notes are outstanding the Company shall furnish to the Holders of the Notes,
within the time periods specified in the SEC's rules and regulations:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report on the annual financial statements by the Company's
certified independent accountants; and
(ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding clause (a) will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Company's Unrestricted Subsidiaries.
(c) In addition, following the consummation of the Exchange
Offer contemplated by the Registration Rights Agreement, whether or not required
by the SEC, the Company shall file a copy of all of the information and reports
referred to in clauses (a)(i) and (a)(ii) above with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
36
(d) For so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
Section 4.04. COMPLIANCE CERTIFICATE.
----------------------
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered to the Trustee pursuant to Section 4.03
above shall be accompanied by a written statement of the Company's independent
public accountants (who shall be a firm of established national reputation) that
in making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Articles 4 or 5 hereof or, if
any such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event that with the giving of notice and the lapse of time
would become an Event of Default, its status and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05. TAXES.
-----
The Company shall pay, and shall cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes; provided that
neither the Company nor any such Restricted Subsidiary shall 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 in accordance with GAAP.
Section 4.06. STAY, EXTENSION AND USURY LAWS.
------------------------------
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
37
Section 4.07. CORPORATE EXISTENCE.
-------------------
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.08. PAYMENTS FOR CONSENT.
--------------------
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to or for the
benefit of any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid or is paid to all Holders that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
----------------------------------------------------------
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR") any
Indebtedness (including any Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and
any of the Subsidiary Guarantors may incur Indebtedness, if the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.00 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
(b) Paragraph (a) of this Section 4.09 will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
(i) the incurrence by the Company of additional Indebtedness and
letters of credit under one or more Credit Facilities and Guarantees
thereof by the Subsidiary Guarantors; provided that the aggregate
principal amount of all Indebtedness of the Company and its Restricted
Subsidiaries incurred pursuant to this clause (i) (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and the Subsidiary Guarantors
thereunder) does not exceed an amount equal to $105.0 million less (A)
50% of all proceeds received from Securitization Transactions and (B)
the aggregate amount of Net Proceeds from an Asset Sale applied by the
Company and its Restricted Subsidiaries since the date hereof to repay
Indebtedness thereunder or to permanently reduce the availability of
revolving credit Indebtedness pursuant to Section 4.12;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented
by the Notes to be issued on the date hereof (and the related Exchange
Notes to be issued pursuant to the Registration Rights Agreement) and
the incurrence by the Subsidiary Guarantors of the Subsidiary
Guarantees of the Notes (and the related Exchange Notes);
38
(iv) the incurrence by the Company or any of the Subsidiary
Guarantors of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the Company's business or the business of such
Subsidiary Guarantor, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (iv), not to
exceed 3.5% of Consolidated Tangible Assets at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was incurred
under clause (a) of this Section 4.09 or clauses (ii), (iii), (iv) or
(x) of this Section 4.09(b);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness owed to the Company or any
of the Subsidiary Guarantors; provided, however, that:
(A) if the Company is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the
Notes;
(B) if a Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to
the prior payment in full in cash of such Subsidiary
Guarantor's Subsidiary Guarantee; and
(C) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by
a Person other than the Company or a Subsidiary Guarantor and
(2) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Subsidiary
Guarantor shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such
Subsidiary Guarantor, as the case may be, that was not
permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the normal
course of business for the purpose of fixing or hedging currency,
commodity or interest rate risk (including with respect to any
floating rate Indebtedness that is permitted by the terms hereof to be
outstanding in connection with the conduct of the Company's respective
businesses and not for speculative purposes);
(viii) the guarantee by the Company or any of the Subsidiary
Guarantors of Indebtedness of the Company or of one of its Restricted
Subsidiaries that was permitted to be incurred by another provision of
this covenant;
(ix) the incurrence by the Company's Unrestricted Subsidiaries
of Non-recourse Debt; provided, however, that if any such Indebtedness
ceases to be Non-recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (ix); and
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(x), not to exceed $25.0 million (which amount may be incurred, in
whole or in part, under any of the Credit Facilities); provided that
no more than $10.0 million of such additional Indebtedness shall be
incurred by Restricted Subsidiaries that are not Subsidiary
Guarantors.
39
(c) For purposes of determining compliance with this Section
4.09, in the event that an item of proposed Indebtedness meets the criteria of
more than one of the categories of Permitted Debt described in clauses (i)
through (x) of Section 4.09(b) as of the date of incurrence thereof or is
entitled to be incurred pursuant to clause (a) of this Section 4.09, the Company
shall, in its sole discretion, at the time the proposed Indebtedness is
incurred, (x) classify all or a portion of that item of Indebtedness on the date
of its incurrence under either the clause (a) of this Section 4.09 or under any
category of Permitted Debt, (y) reclassify at a later date all or a portion of
that or any other item of Indebtedness as being or having been incurred in any
manner that complies with this Section 4.09 and (z) elect to comply with this
Section 4.09 and the applicable definitions in any order.
(d) The Company shall not incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Senior Debt of the Company and not subordinate
or junior in right of payment to the Notes; provided, however, that no
Indebtedness of the Company will be deemed to be contractually subordinated in
right of payment solely by virtue of being unsecured. No Subsidiary Guarantor
will incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to the Senior
Debt of such Subsidiary Guarantor and not subordinate or junior in right of
payment to such Subsidiary Guarantor's Subsidiary Guarantee; provided, however,
that no Indebtedness of a Subsidiary Guarantor will be deemed to be
contractually subordinated in right of payment solely by virtue of being
unsecured.
(e) Indebtedness shall be deemed to have been incurred by the
survivor of a merger, at the time of such merger and, with respect to an
acquired Subsidiary, at the time of such acquisition.
Section 4.10. RESTRICTED PAYMENTS.
-------------------
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other payment or
distribution on account of the Company's Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Company) or to the direct or indirect holders of the Company's Equity
Interests in their capacity as such (other than dividends or distributions
payable solely in the Company's Equity Interests (other than Disqualified Stock)
or to the Company);
(b) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any of the Company's Equity Interests;
(c) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Subordinated
Indebtedness, except (i) a payment of interest or principal at the Stated
Maturity thereof or (ii) Subordinated Indebtedness acquired in anticipation of
satisfying a sinking fund obligation, principal installment or payment of
principal upon final maturity of such Subordinated Indebtedness, in each case
acquired within one year of the date of the sinking fund obligation, principal
installment or payment of principal upon maturity; or
(d) make any Restricted Investment,
(all such payments and other actions set forth in these clauses (a) through (d)
above being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the
time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment; and
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a); and
40
(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date hereof (excluding Restricted Payments permitted by
clauses (2) and (3) of the next paragraph), is less than the sum, without
duplication, of:
(i) 50% of the Company's Consolidated Net Income for the period
(taken as one accounting period) from April 1, 2002 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the
Company since the date hereof from the issue or sale of its Equity
Interests (other than Disqualified Stock) or Equity Interests of any
of the Company's parent entities (which proceeds are received as a
contribution to the Company's common or non-redeemable preferred
equity capital) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or exchanged
for such Equity Interests (other than Equity Interests or Disqualified
Stock or debt securities sold to a Subsidiary of the Company), plus
(iii) to the extent that any Restricted Investment that was made
after the date hereof is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (1) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition,
if any) and (2) the initial amount of such Restricted Investment.
So long as no Default has occurred and is continuing or would
be caused thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions hereof;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any Subordinated Indebtedness or of any of the Company's
Equity Interests by conversion into, or by an exchange for, shares of the
Company's Equity Interests (other than Disqualified Stock), or in exchange for,
or out of the net cash proceeds of the substantially concurrent sale (other than
to any of the Company's Restricted Subsidiaries) of, the Company's Equity
Interests (other than Disqualified Stock); provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded from clause (c)(ii)
of the preceding paragraph;
(3) the repurchase, retirement or redemption of any
Subordinated Indebtedness with the proceeds from an Asset Sale to the extent
required by the agreement governing such Subordinated Indebtedness, but only (x)
if the Company has complied with Section 4.12 and (y) to the extent of the
Excess Proceeds remaining after the offer made to Holders of the Notes pursuant
to the Asset Sale;
(4) the defeasance, redemption, repurchase or other
acquisition of Subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness; and
(5) other Restricted Payments in an aggregate amount since
June 28, 2002 not to exceed $10.0 million.
The amount of all Restricted Payments (other than cash) will
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.10 will be determined by the Board of Directors of the Company
whose resolutions with respect thereto will be delivered to the Trustee. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $5.0 million. Not later than the date
of making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted
41
Payment is permitted and setting forth the basis upon which the calculations
required by this Section 4.10 were computed, together with a copy of any
fairness opinion or appraisal required by this Indenture.
Section 4.11. LIENS.
-----
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt or
trade payables on any asset now owned or hereafter acquired or any proceeds
therefrom, or assign or convey any right to receive income therefrom, except
Permitted Liens.
Section 4.12. ASSET SALES.
-----------
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to consummate an Asset Sale unless:
(i) the Company or such Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise
disposed of (evidenced by a Board Resolution of the Board of Directors
of the Company set forth in an Officers' Certificate delivered to the
Trustee);
(ii) if the Company or such Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale greater
than $7.5 million, the fair market value of the assets sold or
otherwise disposed of is determined by Parent's Board of Directors
(such determination to be evidenced by a Board Resolution of Parent's
Board of Directors set forth in an Officers' Certificate delivered to
the Trustee) or in a written opinion issued by an independent
appraisal firm or financial advisor of national standing; and
(iii) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in the form of
cash, Cash Equivalents or Replacement Assets.
(b) For purposes of Section 4.12(a) only, each of the
following will be deemed to be cash:
(i) any liabilities of the Company or any of its Restricted
Subsidiaries, as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet (other than contingent
liabilities and liabilities that are by their terms subordinated to
the Notes or any Restricted Subsidiary's Subsidiary Guarantee) that
are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability; and
(ii) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash, to
the extent of the cash received in that conversion;
(iii) any Designated Non-Cash Consideration received by the
Company or any of its Restricted Subsidiaries in the Asset Sale.
(c) Within 365 days after the receipt of any Net Proceeds from
an Asset Sale, the Company and its Restricted Subsidiaries may apply those Net
Proceeds at their option:
(i) to repay Senior Debt and, if the Senior Debt repaid is
revolving credit Indebtedness, to correspondingly permanently reduce
commitments with respect thereto;
(ii) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business; or
(iii) to acquire other long-term assets that are used or useful
in a Permitted Business.
42
Pending the final application of any Net Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from Asset Sales that are not applied or
invested within such 365-day period as provided in Section 4.12(c) will
constitute "EXCESS PROCEEDS." When the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company shall make an Asset Sale Offer (which offer
may be made at any time within such 365-day period) to all Holders of Notes and
Additional Notes, if any, and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth herein
with respect to offers to purchase or redeem with the proceeds of sales of
assets to purchase, on a pro rata basis, the maximum principal amount of Notes
and Additional Notes, if any, and such other pari passu Indebtedness equal in
amount to the Excess Proceeds (and not just the amount thereof that exceeds
$15.0 million). The offer price in any Asset Sale Offer will be equal to 100% of
the principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, to the date of purchase, in accordance with the procedures set
forth herein, and shall be payable in cash. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use those Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and Additional Notes, if any, and other pari passu
Indebtedness surrendered by holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and Additional Notes and other pari
passu Indebtedness to be purchased as described in Article 3 hereof. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset
at zero.
(e) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
Asset Sale provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.12 by virtue of such conflict.
Section 4.13. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
------------------------------------------------------------
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(a) pay dividends or make any other distributions on or in
respect of its Capital Stock to the Company or any of its Restricted
Subsidiaries, or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Company or any
other of its Restricted Subsidiaries;
(b) make any loans or advances to the Company or any other of
its Restricted Subsidiaries;
(c) sell, lease or transfer any of its properties or assets to
the Company or any other of its Restricted Subsidiaries; or
(d) guarantee the Company's obligations.
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(i) agreements as in effect on the date hereof or subsequent
agreements relating to our Indebtedness or Indebtedness of any
Subsidiary Guarantor and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings of those agreements; provided that the amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the
date hereof;
43
(ii) this Indenture, the Notes and the Subsidiary Guarantees;
(iii) applicable law;
(iv) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent
such Indebtedness or Capital Stock was incurred in connection with or
in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets
of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(v) customary non-assignment provisions in leases entered into
in the ordinary course of business;
(vi) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that property
of the nature described in clause (c) of the preceding paragraph;
(vii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(viii) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(ix) Liens securing Indebtedness otherwise permitted to be
incurred under Section 4.11 that limit the right of the debtor to
dispose of the assets subject to such Liens; and
(x) provisions with respect to the disposition or distribution
of assets or property in joint venture agreements, asset sale
agreements, stock sale agreements and other similar agreements entered
into in the ordinary course of business.
Section 4.14. TRANSACTIONS WITH AFFILIATES.
----------------------------
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of their respective properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"),
unless:
(a) the Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with a Person that is not an Affiliate; and
(b) the Company delivers to the trustee:
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this covenant and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors of the Company or
Parent's Board of Directors, or, if there are no disinterested members
of the approving Board of Directors at the time, a written opinion
issued by an independent appraisal firm or financial advisor of
national standing that such Affiliate Transaction is fair to the
Company or such Restricted Subsidiary, as the case may be, from a
financial point of view; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, a written opinion issued by an independent
financial
44
advisor of national standing that such Affiliate Transaction is fair
to the Company or such Restricted Subsidiary, as the case may be,
from a financial point of view.
The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph:
(a) transactions between or among the Company and/or its
Restricted Subsidiaries;
(b) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest in such Person;
(c) advances to officers of the Company or any of the
Company's Restricted Subsidiaries in the ordinary course of business to provide
for the payment of reasonable expenses incurred by such persons in the
performance of their responsibilities to the Company or such Restricted
Subsidiary or in connection with any relocation;
(d) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company;
(e) fees and compensation paid to and indemnity provided on
behalf of directors, officers or employees of the Company or any Restricted
Subsidiary of the Company in the ordinary course of business;
(f) any employment agreement that is in effect on the date
hereof and any such employment agreement entered into by the Company or any of
its Restricted Subsidiaries after the date hereof in the ordinary course of
business;
(g) any Restricted Payment that is not prohibited by Section
4.10;
(h) any sale, conveyance or other transfer of accounts
receivable and other related assets customarily transferred in a Securitization
Transaction;
(i) payment of premiums to, and the receipt of proceeds of
insurance from, Laurier Indemnity Company and Laurier Indemnity Company, Ltd.;
(j) payments to or receipts from Extendicare Holdings, Inc.
pursuant to any tax sharing agreement entered into for the purpose of preparing
a consolidated tax return of Extendicare Holdings, Inc.;
(k) payments to or receipts from Virtual Care Provider, Inc.
in connection with the provision of technology services to third parties
pursuant to the terms of management, consulting or other similar agreements; and
(l) transactions pursuant to the services agreement between
the Company and Virtual Care Provider, Inc. relating to certain services
provided by the Company and Virtual Care Provider, Inc. to each other as in
effect on the date hereof.
Section 4.15. SALE AND LEASEBACK TRANSACTIONS.
-------------------------------
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that the Company or any Subsidiary Guarantor may enter into a sale and
leaseback transaction if:
(a) the Company or that Subsidiary Guarantor could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction under the Fixed Charge Coverage Ratio test
in the first paragraph of Section 4.09 and (b) incurred a Lien to secure such
Indebtedness pursuant to Section 4.11;
45
(b) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as determined in good
faith by the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the subject of
that sale and leaseback transaction; and
(c) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.12.
Section 4.16. ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES
---------------------------------------------------
The Company (a) shall not, and shall not permit any of its
Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any of its Restricted Subsidiaries to any Person (other
than to the Company or another one of its Restricted Subsidiaries), unless (i)
such transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Restricted Subsidiary and (ii) the Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in accordance
with Section 4.12; provided that this clause (a) shall not apply to any pledge
of Capital Stock of any Restricted Subsidiary of the Company securing
Indebtedness under Credit Facilities, including the Credit Agreement, or any
exercise of remedies in connection therewith, and (b) shall not permit any
Restricted Subsidiary of the Company to issue any of its Equity Interests (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares or ownership by foreign nationals) to any Person other than
the Company or another one of its Restricted Subsidiaries.
Section 4.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
-------------------------------------------------------
The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would
not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary properly
designated will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
the first paragraph of Section 4.10 or Permitted Investments, as determined by
the Company. That designation will only be permitted if the Investment would be
permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Company
may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default.
Section 4.18. REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL.
------------------------------------------------------------
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple of $1,000) of such Holder's Notes pursuant to
the offer described below (the "CHANGE OF CONTROL OFFER") at a purchase price
(the "CHANGE OF CONTROL PURCHASE PRICE") equal to 101% of the aggregate
principal amount of Notes repurchased, plus accrued and unpaid interest and
Additional Interest if any, on the Notes repurchased, to the purchase date
(subject to the right of Holders on the relevant record date to receive interest
due on the relevant Interest Payment Date).
Subject to clause (c) below, within 30 days following any
Change of Control, the Company shall mail a notice to the Trustee and each
Holder:
(i) send, by first-class mail, with a copy to the Trustee, to
each Holder, at such Holder's address appearing in the securities
register maintained in respect of the Notes by the Registrar (the
"SECURITY REGISTER"):
(A) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to Section 4.18 and that
all Notes timely tendered will be accepted for payment;
(B) the Change of Control Purchase Price and the purchase
date, which shall be, subject to any contrary requirements of
applicable law, a business day
46
no earlier than 30 days and no later than 60 days from the
date such notice is mailed;
(C) the circumstances and relevant facts regarding the
Change of Control (including information with respect to pro
forma historical income, cash flow and capitalization after
giving effect to the Change of Control); and
(D) the procedures that Holders must follow in order to
tender their Notes (or portions thereof) for payment, and the
procedures that Holders must follow in order to withdraw an
election to tender Notes (or portions thereof) for payment.
The Company will comply, to the extent applicable, with the
requirements of Rule 14(e)-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of the covenant
described hereunder, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
the covenant described hereunder by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company
shall, to the extent lawful:
(i) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent shall promptly mail to each Holder of Notes
properly tendered the Change of Control Payment for such Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book-entry)
to each Holder a new note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided that each new note will be in a
principal amount of $1,000 or an integral multiple of $1,000.
(c) Prior to complying with any of the provisions of this
Section 4.18, but in any event within 90 days following a Change of Control, the
Company shall either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by this covenant. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(d) The provisions described above that require us to make a
Change of Control Offer following a Change of Control will be applicable whether
or not any other provisions of the indenture are applicable. Except as described
above with respect to a Change of Control, this Indenture does not contain
provisions that permit the Holders of the Notes to require that the Company
repurchase or redeem the Notes in the event of a takeover, recapitalization or
similar transaction.
(e) The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes a Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer.
47
Section 4.19. ADDITIONAL SUBSIDIARY GUARANTEES
If the Company or any of its Restricted Subsidiaries acquires
or creates another domestic Significant Subsidiary or any other Domestic
Subsidiary that guarantees or incurs any Indebtedness or any other Significant
Subsidiary or Restricted Subsidiary that guarantees or otherwise provides direct
credit support for Indebtedness of the Company or any of the Company's Domestic
Subsidiaries after the date hereof, then that newly acquired or created
Significant Subsidiary, Domestic Subsidiary or other Restricted Subsidiary will
execute and deliver to the Trustee a supplemental indenture providing for a
Subsidiary Guarantee and deliver an Opinion of Counsel satisfactory to the
Trustee within 10 Business Days of the date on which it was acquired or created;
provided, however, that the foregoing shall not apply to Subsidiaries that have
properly been designated as Unrestricted Subsidiaries in accordance with this
Indenture for so long as they continue to constitute Unrestricted Subsidiaries.
Section 4.20. DESIGNATION AS "DESIGNATED SENIOR INDEBTEDNESS"
The Company hereby designates the Notes as "Designated Senior
Indebtedness" as that term is defined in the Senior Subordinated Note Indenture.
Section 4.21. BUSINESS ACTIVITIES.
-------------------
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Subsidiaries taken
as a whole.
ARTICLE 5.
SUCCESSORS
Section 5.01. MERGER, CONSOLIDATION, OR SALE OF PROPERTY.
------------------------------------------
The Company shall not, directly or indirectly (a) consolidate
or merge with or into another Person (whether or not the Company is the
surviving corporation) or (b) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person; unless:
(a) either: (x) the Company is the surviving corporation; or
(y) the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is a corporation organized or existing under the
laws of the United States, any state of the United States or the District of
Columbia;
(b) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes all
of the Company's obligations under the Notes, this Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture reasonably
satisfactory to the Trustee;
(c) immediately after such transaction no Default or Event of
Default exists;
(d) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition has been made shall, on
the date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09.
(e) the Company, or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition has been made,
48
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such transaction and any supplemental indenture
entered into in connection therewith complies with all of the terms of this
Section 5.01 and that all conditions precedent provided for in this Indenture
relating to such transaction or series of transactions have been complied with.
In addition, the Company may not, directly or indirectly,
lease all or substantially all of its properties or assets, in one or more
related transactions, to any other Person. The Person formed by or surviving any
consolidation or merger (if other than the Company) will succeed to, and be
substituted for, and may exercise every right and power of the Company under
this Indenture, but, in the case of a lease of all or substantially all the
assets of the Company, the Company will not be released from the obligation to
pay the principal of and interest on the Notes.
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
---------------------------------
The Surviving Person shall succeed to, and be substituted for,
and may exercise every right and power of the Company under this Indenture, but
the predecessor Company in the case of:
(a) a sale, transfer, assignment, conveyance or other
disposition (unless such sale, transfer, assignment, conveyance or other
disposition is of all the assets of the Company as an entirety or virtually as
an entirety), or
(b) a lease,
shall not be released from any of the obligations or covenants under this
Indenture, including with respect to the payment of the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
-----------------
Each of the following is an "Event of Default:"
(i) default for 30 days in the payment when due of interest on,
or Additional Interest with respect to, the Notes;
(ii) default in payment when due of the principal of or premium,
if any, on the Notes;
(iii) failure by the Company or any of its Restricted
Subsidiaries to comply with Section 4.09, Section 4.10 or Article 5;
(iv) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice to comply with Sections 4.12 or
4.18;
(v) failure by the Company or any of its Restricted Subsidiaries
for 60 days after notice to comply with any other covenant or
agreement in the Notes or in this Indenture;
(vi) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date
hereof, if that default:
49
(A) is caused by a failure to pay principal of, or interest
or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness
on the date of such default (a "PAYMENT DEFAULT"); or
(B) results in the acceleration of such Indebtedness prior
to its express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $20.0 million or more;
(vii) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments (to the extent not fully covered
by insurance) aggregating in excess of $20.0 million, which judgments
are not paid, discharged or stayed for a period of 60 consecutive
days;
(viii) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and
effect or any Subsidiary Guarantor, or any Person acting on behalf of
any Subsidiary Guarantor, shall deny or disaffirm its obligations
under its Subsidiary Guarantee; and
(ix) the Company or any of its Significant Subsidiaries pursuant
to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become due;
and
(x) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case; or
(B) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of
the property of the Company or any of its Significant
Subsidiaries; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02. ACCELERATION.
------------
If an Event of Default (other than an Event of Default
specified in clauses (ix) or (x) of Section 6.01 hereof, with respect to the
Company, any Subsidiary that is a Significant Subsidiary or any group of
Subsidiaries that, taken together would constitute a Significant Subsidiary),
shall have occurred and be continuing, the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Notes then outstanding may
50
declare to be immediately due and payable the principal amount of all the Notes
then outstanding, plus accrued but unpaid interest and Additional Interest, if
any, to the date of acceleration. In the case of an Event of Default specified
in clauses (ix) or (x) of Section 6.01 hereof, with respect to the Company, any
Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that,
taken together would constitute a Significant Subsidiary shall occur, such
amount with respect to all the Notes will become due and payable immediately
without any declaration or other act on the part of the Trustee or the Holders.
Holders may not enforce this Indenture or the Notes except as provided in this
Indenture. Subject to the limitations described in this Article 6, Holders of a
majority in aggregate principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal, premium, if any, or
interest or Additional Interest, if any) if it determines that withholding
notice is in their interest.
In the case of an Event of Default occurring by reason of any
willful action or inaction taken or not taken by the Company or on the Company's
behalf with the intention of avoiding payment of the premium that the Company
would have been required to pay if the Company had then elected to redeem the
Notes pursuant to Section 3.07 hereof, an equivalent premium will also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the Notes. If an Event of Default occurs prior to July 1, 2006,
by reason of any willful action or inaction taken or not taken by the Company or
on the Company's behalf with the intention of avoiding the prohibition on
redemption of the Notes prior to July 1, 2006, then the premium specified in
Section 3.07 will also become immediately due and payable to the extent
permitted by law upon acceleration of the Notes.
Section 6.03. OTHER REMEDIES.
--------------
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest and Additional Interest, if any, 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. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. WAIVER OF PAST DEFAULTS.
-----------------------
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium, if any, or interest or Additional
Interest on, the Notes; provided, however, that after any acceleration, but
before a judgment or decree based on acceleration is obtained by the Trustee,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding may rescind and annul such acceleration if all Events of Default,
other than the nonpayment of accelerated principal, premium or interest or
Additional Interest, have been cured or waived as provided in this Indenture.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. CONTROL BY MAJORITY.
-------------------
Subject to Section 7.01, in case an Event of Default shall
occur and be continuing, the Trustee will be under no obligation to exercise any
of its rights or powers under this Indenture at the request or direction of any
of the Holders, unless such Holders shall have offered to the Trustee reasonable
indemnity. Subject to Section 7.07, the Holders of a majority in aggregate
principal amount of the Notes then outstanding will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Notes.
51
Section 6.06. LIMITATION ON SUITS.
-------------------
No Holder will have any right to institute any proceeding with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any remedy thereunder, unless:
(a) such Holder has previously given to the Trustee written
notice of a continuing Event of Default,
(b) Holders of at least 25% in aggregate principal amount of
the Notes then outstanding have made written request and offered reasonable
indemnity to the Trustee to institute such proceeding as trustee, and
(c) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Notes then outstanding a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days.
The preceding limitations do not apply to a suit instituted by
a Holder for enforcement of payment of the principal of, and premium, if any, or
interest or Additional Interest on, a Note on or after the respective due dates
expressed in such Note.
A Holder may not use this Indenture to affect, disturb or
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder.
Section 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
------------------------------------
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal, premium, if any, and
interest and Additional Interest, if any, on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
--------------------------
If an Event of Default specified in clauses (i) or (ii) of
Section 6.01 occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal of, premium, if any, and interest and
Additional Interest, if any, remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest 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 is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to participate as a member, voting or otherwise, of any
official committee of creditors appointed in such matter and shall be entitled
and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
52
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, 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 6,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expenses
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest and Additional Interest, if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, and interest and
Additional Interest, if any,, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 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 by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, 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 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the
Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of
53
this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein or otherwise verify the contents thereof).
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05
hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
-----------------
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) 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 the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) 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.
54
(g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a Default or Event of Default is received by a Responsible Officer of the
Trustee at the Corporate Trust Office of the Trustee, and such notice references
the specific Default or Event of Default, the Notes and this Indenture.
(h) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
(i) The Trustee shall not be required to give any bond or
surety in respect of the performance of its power and duties hereunder.
(j) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants herein.
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 Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as Trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Section 7.10 and 7.11 hereof.
Section 7.04. TRUSTEE'S DISCLAIMER.
--------------------
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. NOTICE OF DEFAULTS.
------------------
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs unless such Default
or Event of Default has since been cured. Except in the case of a Default or
Event of Default in payment of principal of, premium, if any, or interest or
Additional Interest, if any, on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS.
-----------------------------
Within 60 days after each May 15 beginning with May 15, 2002,
and for so long as Notes remain outstanding, the Trustee shall mail to the
Holders a brief report dated as of such reporting date that complies with TIA
ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
55
Section 7.07. COMPENSATION AND INDEMNITY.
--------------------------
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder as agreed to in writing. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee or any predecessor
Trustee against any and all losses, claims, damages, penalties, fines,
liabilities or expenses, including incidental and out-of-pocket expenses and
reasonable attorneys fees ("LOSSES") incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such losses may be attributable to its gross
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim, and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld. The
Company need not reimburse any expense or indemnify against any loss liability
or expense incurred by the Trustee through the Trustee's own willful misconduct,
gross negligence or bad faith.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
premium, if any, and interest and Additional Interest, if any, on particular
Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in clauses (ix) or (x) of Section 6.01 hereof occurs,
the expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
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.
The Trustee may resign in writing at any time upon 30 days
prior notice to the Company and be discharged from the trust hereby created by
so notifying the Company. The Holders of a majority in principal amount of the
then outstanding Notes may remove the Trustee by so notifying the Trustee and
the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a custodian or public officer takes charge of the Trustee
or its property; or
56
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has
been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. Subject to the Lien provided for in Section 7.07 hereof,
the retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee; provided, however, that all sums owing to the Trustee
hereunder shall have been paid. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
-----------------------------
There shall at all times be a Trustee hereunder that is a
Person organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
-------------------------------------------------
The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
--------------------------------------------------------
The Company may, at its option and at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
57
Section 8.02. LEGAL DEFEASANCE AND DISCHARGE.
------------------------------
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Debt represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest and Additional Interest, if any,
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the
obligations of the Company and each of the Subsidiary Guarantors in connection
therewith and (d) this Article 8. If the Company exercises under Section 8.01
hereof the option applicable to this Section 8.02, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, payment of the Notes may not
be accelerated because of an Event of Default. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03. COVENANT DEFEASANCE.
-------------------
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.05, 4.06 and
4.08 through 4.18 hereof, and the operation of Section 5.01(d) hereof, with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the
Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. If the Company exercises under Section 8.01
hereof the option applicable to this Section 8.03, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, payment of the Notes may not
be accelerated because of an Event of Default specified in clauses (iii) and
(iv) (with respect to the covenants contained in Sections 4.05, 4.06 and 4.08
through 4.18 hereof), (v), (vi), (vii) and (viii) (but in the case of clauses
(ix) and (x) of Section 6.01 hereof, with respect to Significant Subsidiaries
only).
Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
------------------------------------------
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes.
The Legal Defeasance or Covenant Defeasance may be exercised
only if:
(a) the Company irrevocably deposits with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants, to
pay the principal of, or interest and premium and Additional Interest, if any,
58
on the outstanding Notes on the Stated Maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(b) in the case of Legal Defeasance, the Company delivers to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date hereof, there
has been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel will confirm that,
the Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of Covenant Defeasance, the Company delivers
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default has occurred and is
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(e) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any material
agreement or instrument (including, without limitation, the Credit Agreement,
but excluding the indenture) to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries may is bound;
(f) the Company delivers to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the Company's other creditors with the
intent of defeating, hindering, delaying or defrauding the Company's creditors
or others; and
(g) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Section 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
--------------------------------------------------------------
Subject to Section 8.06 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of all sums due and to become due thereon
in respect of principal, premium, if any, and interest and Additional Interest,
if any,, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or U.S. Government Obligations held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the
59
certification delivered under Section 8.04(b) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. REPAYMENT TO COMPANY.
--------------------
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest or Additional Interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest or
Additional Interest has become due and payable shall be paid to the Company on
its request or (if then held by the Company) shall be discharged from such
trust; and the Holder shall thereafter, as an unsecured creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
Section 8.07. REINSTATEMENT.
-------------
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest or Additional Interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders to receive such payment from the money
held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
-----------------------------------
Notwithstanding Section 9.02 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder to:
(a) cure any ambiguity, defect or inconsistency;
(b) provide for the assumption by a successor corporation of
the obligations of the Company under this Indenture in the case of a merger or
consolidation or sale of all or substantially all of the Company's assets;
(c) provide for uncertificated Notes in addition to or in
place of certificated Notes;
(d) make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any such Holder; or
(e) make any change to comply with any requirement of the SEC
in order to effect or maintain the qualification of this Indenture under the
TIA.
Upon the request of the Company accompanied by a Board
Resolution of the Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of any
60
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02. WITH CONSENT OF HOLDERS OF NOTES.
--------------------------------
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture and the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes, including Additional Notes, if any, then
outstanding voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (except a continuing Default or Event of Default in the payment of
interest or Additional Interest on, or the principal of, the Notes) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the Notes,
including Additional Notes, if any, then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes).
Upon the request of the Company accompanied by a Board
Resolution of the Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
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 or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders to such Holder's
address appearing in the Security Register a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such amended or supplemental Indenture or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal
amount of the Notes, including Additional Notes, if any, then outstanding voting
as a single class may waive compliance in a particular instance by the Company
with any provision of this Indenture or the Notes. Without the consent of each
Holder, an amendment or waiver under this Section 9.02 may not (with respect to
any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the Notes;
(c) make any change in the provisions of Sections 4.12 or
4.18;
61
(d) reduce the rate of or change the time for payment of
interest on any note,
(e) waive a Default or Event of Default in the payment of
principal of, or interest or premium, or Additional Interest, if any, on the
Notes (except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted from such acceleration);
(f) make any Note payable in money other than that stated in
the Note,
(g) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of, or interest or premium or Additional Interest,
if any, on the Notes;
(h) waive a redemption payment with respect to any Note;
(i) release any Subsidiary Guarantor from any of its
obligations under its Subsidiary Guarantee or this Indenture, except in
accordance with the terms hereof; or
(j) make any change in the preceding amendment and waiver
provisions.
Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
-----------------------------------
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder of a Note and
every subsequent Holder that evidences the same debt as the consenting Holder's
Note, 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 if the Trustee
receives written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
Section 9.05. NOTATION ON OR EXCHANGE OF NOTES.
--------------------------------
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
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 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon an Officer's Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture
is authorized or permitted by this Indenture and that such amended or
supplemental indenture is the legal, valid and binding obligations of the
Company enforceable against it in accordance with its terms, subject to
customary exceptions and that such amended or supplemental indenture complies
with the provisions hereof (including Section 9.03).
62
ARTICLE 10.
SUBSIDIARY GUARANTEES
Section 10.01. GUARANTEE.
---------
Subject to this Article 10, each of the Subsidiary Guarantors
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that: (a) the principal of, premium, if any, and interest on the Notes shall be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration pursuant to Section 6.02 hereof or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Subsidiary Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
Each Subsidiary Guarantor hereby agrees that its obligations
with regard to this Subsidiary Guarantee shall be joint and several,
unconditional, irrespective of the validity or enforceability of the Notes or
the obligations of the Company under this Indenture, the absence of any action
to enforce the same, the recovery of any judgment against the Company or any
other obligor with respect to this Indenture, the Notes or the Obligations of
the Company under this Indenture or the Notes, any action to enforce the same or
any other circumstances (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor further, to the extent permitted by law, waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims, rights
or remedies, including but not limited to: (a) any right to require any of the
Trustee, the Holders or the Company (each a "BENEFITED PARTY"), as a condition
of payment or performance by such Subsidiary Guarantor, to (1) proceed against
the Company, any other guarantor (including any other Subsidiary Guarantor) of
the Obligations under the Subsidiary Guarantees or any other Person, (2) proceed
against or exhaust any security held from the Company, any such other guarantor
or any other Person, (3) proceed against or have resort to any balance of any
deposit account or credit on the books of any Benefited Party in favor of the
Company or any other Person, or (4) pursue any other remedy in the power of any
Benefited Party whatsoever; (b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of the Company including
any defense based on or arising out of the lack of validity or the
unenforceability of the Obligations under the Subsidiary Guarantees or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Company from any cause other than payment in full of the
Obligations under the Subsidiary Guarantees; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon any Benefited Party's errors or omissions
in the administration of the Obligations under the Subsidiary Guarantees, except
behavior which amounts to bad faith; (e)(1) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of the
Subsidiary Guarantees and any legal or equitable discharge of such Subsidiary
Guarantor's obligations hereunder, (2) the benefit of any statute of limitations
affecting such Subsidiary Guarantor's liability hereunder or the enforcement
hereof, (3) any rights to set-offs, recoupments and counterclaims and (4)
promptness, diligence and any requirement that any Benefited Party protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentations, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of the Subsidiary Guarantees, notices of default under the Notes or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Obligations under the Subsidiary Guarantees or any agreement
related thereto, and notices of any extension of credit to the Company and any
right to consent to any thereof; (g) to the extent permitted under applicable
law, the benefits of any "One Action" rule and (h) any defenses or benefits that
may be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of the Subsidiary
Guarantees. Each Subsidiary Guarantor hereby covenants that its Subsidiary
Guarantee shall not
63
be discharged except by complete performance of the obligations contained in its
Subsidiary Guarantee and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Subsidiary Guarantors or any custodian,
trustee, liquidator or other similar official acting in relation to either the
Company or the Subsidiary Guarantors, any amount paid by either to the Trustee
or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 6.02 hereof for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby and
(y) in the event of any declaration of acceleration of such obligations as
provided in Section 6.02 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantors for
the purpose of this Subsidiary Guarantee. The Subsidiary Guarantors shall have
the right to seek contribution from any non-paying Subsidiary Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Subsidiary Guarantee.
Section 10.02. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
--------------------------------------------
Each Subsidiary Guarantor, and by its acceptance of Notes,
each Holder, hereby confirms that it is the intention of all such parties that
the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Subsidiary Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary
Guarantors hereby irrevocably agree that the obligations of such Subsidiary
Guarantor under this Article 10 shall be limited to the maximum amount as shall,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Subsidiary Guarantor that are relevant under such laws,
including, if applicable, its guarantee of all obligations under the Credit
Agreement, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
this Article 10, result in the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance.
Section 10.03. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
----------------------------------------------
To evidence its Subsidiary Guarantee set forth in Section
10.01 hereof, each Subsidiary Guarantor hereby agrees that a notation of such
Subsidiary Guarantee in substantially the form included in Exhibit E shall be
endorsed by an Officer of such Subsidiary Guarantor on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Subsidiary Guarantor by its President or one of its Vice Presidents.
Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 10.01 hereof shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantors.
64
Section 10.04. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
-------------------------------------------------------------
Except as otherwise provided in Section 10.05 hereof, no
Subsidiary Guarantor may consolidate with or merge with or into (whether or not
such Subsidiary Guarantor is the surviving Person) another Person whether or not
affiliated with such Subsidiary Guarantor unless:
(a) subject to Section 10.05 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Subsidiary Guarantor
or the Company) unconditionally assumes all the obligations of such Subsidiary
Guarantor, pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under this Indenture, the Subsidiary Guarantee and
the Registration Rights Agreement on the terms set forth herein or therein; and
(b) the Subsidiary Guarantor complies with the requirements of
Article 5 hereof.
In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Subsidiary Guarantor, such successor Person shall succeed to
and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary Guarantor. Such successor Person thereupon
may cause to be signed any or all of the Subsidiary Guarantees to be endorsed
upon all of the Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of such
Subsidiary Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Subsidiary
Guarantor with or into the Company or another Subsidiary Guarantor, or shall
prevent any sale or conveyance of the property of a Subsidiary Guarantor as an
entirety or substantially as an entirety to the Company or another Subsidiary
Guarantor.
Section 10.05. RELEASES FOLLOWING SALE OF ASSETS.
---------------------------------
In the event of a sale or other disposition of all of the
assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all to the capital stock of any
Subsidiary Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Subsidiary of the Company, then such
Subsidiary Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital stock of such
Subsidiary Guarantor) or the corporation acquiring the property (in the event of
a sale or other disposition of all or substantially all of the assets of such
Subsidiary Guarantor) shall be released and relieved of any obligations under
its Subsidiary Guarantee; provided that the net proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of this
Indenture, including without limitation Section 4.12 hereof. Upon delivery by
the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel
to the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.12 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Subsidiary Guarantor from its
obligations under its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations
under its Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of any
Subsidiary Guarantor under this Indenture as provided in this Article 10.
65
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01. SATISFACTION AND DISCHARGE.
--------------------------
This Indenture will be discharged and will cease to be of
further effect as to all Notes issued hereunder, when:
(a) either:
(i) all Notes that have been authenticated (except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company) have been delivered to the Trustee for
cancellation; or
(ii) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable
within one year and the Company has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars and non-callable
Government Securities, or a combination thereof, in such amounts as
will be sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the Notes
not delivered to the Trustee for cancellation for principal, premium,
if any, and accrued interest and Additional Interest, if any, to the
date of maturity or redemption;
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any
Subsidiary Guarantor is a party or by which the Company or any Subsidiary
Guarantor is bound;
(c) the Company has paid or caused to be paid all sums payable
by it under this Indenture; and
(d) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money and/or non-callable
Government Securities toward the payment of the Notes at maturity or the
redemption date, as the case may be.
The Company shall deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Section 11.02. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
-------------------------------------------------------
Subject to Section 11.03 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 11.02, the
"Trustee") pursuant to Section 11.01 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest and
Additional Interest, if any,, but such money need not be segregated from other
funds except to the extent required by law.
Section 11.03. REPAYMENT TO COMPANY.
--------------------
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest or Additional Interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest has become
due and payable shall be
66
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. TRUST INDENTURE ACT CONTROLS.
----------------------------
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.
Section 12.02. NOTICES.
-------
Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telecopier
or overnight air courier guaranteeing next-day delivery, to the other's address:
If to the Company:
Extendicare Health Services, Inc.
111 West Michigan Street
Milwaukee, WI 53203
Attention: Chief Financial Officer
Telecopier No.: (414) 908-8111
With a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202-5367
Attention: Russell E. Ryba
Telecopier No.: (414) 297-4900
If to the Trustee:
U.S. Bank, N.A.
1555 North RiverCenter Drive, Suite 301
Milwaukee, WI 53212
Attention: Steven J. Peterson
Telecopier No.: (414) 905-5049
The Company or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders and the Trustee) 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 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. All notices and
communications to the Trustee shall be deemed duly given and effective only upon
receipt.
67
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next-day delivery to its address shown on the
Security Register. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
-------------------------------------------------------------
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
Section 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
--------------------------------------------------
Upon any request or application by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable such Person
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 12.06. RULES BY TRUSTEE AND AGENTS.
---------------------------
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
68
Section 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
-----------------------------------------------------------
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Subsidiary Guarantor, as such,
shall have any liability for any obligations of the Company or of the Subsidiary
Guarantors under the Notes, this Indenture, the Subsidiary Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the SEC that such a waiver is
against public policy.
Section 12.08. GOVERNING LAW.
-------------
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
---------------------------------------------
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 12.10. SUCCESSORS.
----------
All covenants and agreements of the Company in this Indenture
and the Notes shall bind its successors. All covenants and agreements of the
Trustee in this Indenture shall bind its successors.
Section 12.11. SEVERABILITY.
------------
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 12.12. COUNTERPART ORIGINALS.
---------------------
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings in
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURE PAGE TO INDENTURE
SIGNATURE PAGE TO INDENTURE
69
SIGNATURES
Dated as of June 28, 2002
ISSUER:
EXTENDICARE HEALTH SERVICES, INC.
By: /s/ Mark W. Durishan
----------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer
and Treasurer
GUARANTORS:
EXTENDICARE HEALTH FACILITY HOLDINGS, INC.
EXTENDICARE HEALTH FACILITIES, INC.
COVENTRY CARE, INC.
NORTHERN HEALTH FACILITIES, INC.
EXTENDICARE HOMES, INC.
EXTENDICARE HEALTH NETWORK, INC.
THE PROGRESSIVE STEP CORPORATION
EXTENDICARE OF INDIANA, INC.
EDGEWOOD NURSING CENTER, INC.
ELDER CREST, INC.
HAVEN CREST, INC.
MEADOW CREST, INC.
OAK HILL HOME OF REST AND CARE, INC.
EXTENDICARE GREAT TRAIL, INC.
FIR LANE TERRACE CONVALESCENT CENTER, INC.
ADULT SERVICES UNLIMITED, INC.
ARBORS EAST, INC.
ARBORS AT TOLEDO, INC.
HEALTH POCONOS, INC.
MARSHALL PROPERTIES, INC.
COVENTRY CARE HOLDINGS, INC.
UNITED PROFESSIONAL SERVICES, INC.
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
70
INDIANA HEALTH AND REHABILITATION PARTNERSHIP
BY: EXTENDICARE HOMES, INC., AS GENERAL PARTNER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
BY: EXTENDICARE OF INDIANA, INC., AS GENERAL PARTNER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
CONCORDIA MANOR, LLC
FIRST COAST HEALTH AND REHABILITATION CENTER, LLC
JACKSON HEIGHTS REHABILITATION CENTER, LLC
TREASURE ISLE CARE CENTER, LLC
BY: EXTENDICARE HOMES, INC., AS SOLE MEMBER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
KAUFMAN STREET, WV, LLC
NEW CASTLE CARE, LLC
BY: FIR LANE TERRACE CONVALESCENT CENTER, INC., AS SOLE
MEMBER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
71
ALPINE HEALTH AND REHABILITATION CENTER, LLC
COLONIAL CARE, LLC
GREENBRIAR CARE, LLC
GREENBROOK CARE, LLC
HERITAGE CARE, LLC LADY
LAKE CARE, LLC
NEW HORIZON CARE, LLC
NORTH REHABILITATION CARE, LLC
PALM COURT CARE, LLC
RICHEY MANOR, LLC
ROCKLEDGE CARE, LLC
SOUTH HERITAGE HEALTH AND REHABILITATION CENTER, LLC
THE OAKS RESIDENTIAL AND REHABILITATION CENTER, LLC
WINTER HAVEN HEALTH AND REHABILITATION CENTER, LLC
BY: EXTENDICARE HEALTH FACILITIES, INC., AS SOLE MEMBER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
72
ARBORS AT TAMPA, LLC
ARBORS AT BAYONET POINT, LLC
ARBORS AT FAIRLAWN CARE, LLC
ARBORS AT FAIRLAWN REALTY OH, LLC
ARBORS AT SYLVANIA CARE, LLC
ARBORS AT SYLVANIA REALTY OH, LLC
ARBORS WEST CARE, LLC
ARBORS WEST REALTY OH, LLC
COLUMBUS REHABILITATION REALTY OH, LLC
JACKSONVILLE CARE, LLC
SAFETY HARBOR CARE, LLC
KISSIMMEE CARE, LLC
ORANGE PARK CARE, LLC
OREGON CARE, LLC
PORT CHARLOTTE CARE, LLC
SARASOTA CARE, LLC
SEMINOLE CARE, LLC
WINTER HAVEN CARE, LLC
BLANCHESTER CARE, LLC
CANTON CARE, LLC
COLUMBUS REHABILITATION CARE, LLC
DAYTON CARE, LLC
DELAWARE CARE, LLC
GALLIPOLIS CARE, LLC
HILLIARD CARE, LLC
LONDON CARE, LLC
MARIETTA CARE, LLC
ROCKMILL CARE, LLC
ROCKSPRINGS CARE, LLC
WATERVILLE CARE, LLC
WOODSFIELD CARE, LLC
BY: NORTHERN HEALTH FACILITIES, INC., AS SOLE MEMBER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
73
STONEBRIDGE CARE, LP
EDGEWOOD CARE, LP
ELDERCREST CARE, LP
HAVEN CARE, LP
MEADOW CARE, LP
OAK HILL CARE, LP
BY: COVENTRY CARE HOLDINGS, INC., AS GENERAL PARTNER
By: /s/ Mark W. Durishan
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
GREAT TRAIL CARE, LLC
BY: EXTENDICARE GREAT TRAIL, INC., AS SOLE MEMBER
By: /s/ Richard Bertrand
--------------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President - Development
FISCAL SERVICES GROUP, LLC
PARTNERS HEALTH GROUP, LLC
BY: EXTENDICARE HEALTH NETWORK, INC., AS SOLE MEMBER
By: /s/ Richard Bertrand
--------------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President - Development
MILFORD CARE, LLC
BY: MARSHALL PROPERTIES, INC., AS SOLE MEMBER
By: /s/ Richard Bertrand
--------------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President - Development
74
PARTNERS HEALTH GROUP - FLORIDA, LLC
PARTNERS HEALTH GROUP - LOUISIANA, LLC
PARTNERS HEALTH GROUP - TEXAS, LLC
BY: PARTNERS HEALTH GROUP, LLC
BY: EXTENDICARE HEALTH NETWORK, INC., AS SOLE MEMBER
By: /s/ Richard Bertrand
--------------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President - Development
75
TRUSTEE:
U.S. BANK, N.A.
By: /s/ Steven J. Peterson
----------------------------------------
Name: Steven J. Peterson
Title: Trust Officer
76
EXHIBIT A
(Face of Note)
9 1/2% SENIOR NOTES DUE 2010
CUSIP _____________
NO. _____ $_____________
EXTENDICARE HEALTH SERVICES, INC.
promises to pay to CEDE & CO., INC. or registered assigns, the principal sum of
_________________ Dollars ($______________) on July, 2010.
Interest Payment Dates: January 1 and July 1, commencing January 1, 2003.
Record Dates: December 15 and June 15.
Dated: ______________, 20__.
A-1
IN WITNESS WHEREOF, the Issuer has caused this Note to be
signed manually or by facsimile by its duly authorized officer.
EXTENDICARE HEALTH SERVICES, INC.
By:
--------------------------------------------------
Name: Mark W. Durishan
Title: Vice President, Chief Financial Officer and
Treasurer
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
[ ]
as Trustee
By:
---------------------------------
Authorized Signatory
Dated _____________, 20__
A-2
(Back of Note)
9 1/2% Senior Notes due 2010
[Insert the Global Note Legend, if applicable pursuant to the terms of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the terms of the
Indenture]
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Extendicare Health Services, Inc., a Delaware corporation
(the "ISSUER"), promises to pay interest on the principal amount of this Note at
9 1/2% per annum until maturity and shall pay Additional Interest, if any, as
provided in Section 5 of the Registration Rights Agreement. The Issuer shall pay
interest semi-annually on January 1 and July 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "INTEREST
PAYMENT DATE"). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided, however, that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be the first of January 1 or July 1 to
occur after the date of issuance, unless such January 1 or July 1 occurs within
one calendar month of such date of issuance, in which case the first Interest
Payment Date shall be the second of January 1 and July 1 to occur after the date
of issuance. The Issuer shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
interest rate then in effect under the Indenture and this Note; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Issuer shall pay interest on the Notes
(except defaulted interest) to the Persons who are Holders at the close of
business on the December 15 or June 15 next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes shall be payable as to principal,
premium, if any, and interest and Additional Interest, if any, at the office or
agency of the Issuer maintained for such purpose, or, at the option of the
Issuer, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the Security Register; provided, however, that payment by
wire transfer of immediately available funds shall be required with respect to
principal of and interest and Additional Interest, if any, and premium, if any,
on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Issuer or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank, N.A., the Trustee
under the Indenture, shall act as Paying Agent and Registrar. The Issuer may
change any Paying Agent or Registrar without notice to any Holder. The Issuer or
any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Issuer issued the Notes under an Indenture dated as
of June 28, 2002 ("INDENTURE") among the Issuer, the guarantors party thereto
(the "GUARANTORS") and the Trustee. 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 of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are obligations of the
Issuer unlimited in aggregate principal amount.
A-3
5. MATURITY. The principal on the Notes shall be due and payable on
July 1, 2010.
6. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Paragraph 6, the
Notes will not be redeemable at the option of the Issuer prior to July 1, 2006.
Starting on that date, the Issuer may redeem all or any portion of the Notes, at
once or over time, after giving the required notice under the Indenture. The
Notes may be redeemed at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest and
Additional Interest, if any, to the redemption date (subject to the right of
Holders on the relevant record date to receive interest due on the relevant
Interest Payment Date), if redeemed during the twelve-month period commencing on
July 1 of the years indicated below:
Year Percentage
- ---- ----------
2006........................................................ 104.750%
2007........................................................ 102.375%
2008 and thereafter......................................... 100.000%
(b) At any time and from time to time, prior to July 1, 2005,
the Issuer may redeem up to 35% of the aggregate principal amount of the Notes
issued under the Indenture at a redemption price equal to 109.500% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date (subject to the right of Holders on the
relevant record date to receive interest due on the relevant Interest Payment
Date) with the net cash proceeds of any Qualified Equity Offering of the
Issuer's common stock; provided, however, that after giving effect to any such
redemption, at least 65% of the aggregate principal amount of the Notes issued
under the Indenture remains outstanding. Any such redemption shall be made
within 90 days of the closing of such Qualified Equity Offering upon not less
than 30 nor more than 60 days' prior notice.
(c) Any prepayment pursuant to this paragraph shall be made
pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.
7. MANDATORY REDEMPTION. The Issuer shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
8. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder shall have
the right to require the Issuer to repurchase all or any part (equal to $1,000
or an integral multiple of $1,000) of such Holder's Notes (a "CHANGE OF CONTROL
OFFER") at a purchase price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Additional Interest, if any, to the purchase
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant Interest Payment Date).
(b) If the Issuer or one of its Restricted Subsidiaries consummates any
Asset Sales, when the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Issuer shall commence an offer to all Holders of Notes (an "ASSET SALE
OFFER") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Additional
Interest thereon, if any, to the date fixed for the closing of such offer in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including Additional Notes) tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Issuer (or such
Restricted Subsidiary) may use such deficiency for any purpose not otherwise
restricted by the Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Issuer prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
A-4
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuer may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuer need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuer need
not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Issuer and the Trustee may amend or supplement the Indenture or the Notes
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes voting as a single class, and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes voting as a single class. Without the consent of any Holder,
the Issuer and the Trustee may amend or supplement the Indenture or the Notes to
cure any ambiguity, defect or inconsistency, to provide for the assumption by a
successor corporation of the obligations of the Issuer under the Indenture in
the case of a merger or consolidation or sale of all or substantially all of the
assets of the Issuer, provide for uncertificated Notes in addition to or in
place of certificated Notes, to make any change that would provide any
additional rights or benefits to the Holders of Notes or that does not adversely
affect the legal rights under the Indenture of any such Holder, or to make any
change to comply with any requirement of the SEC in order to effect or maintain
the qualification of the Indenture under the TIA.
12. DEFEASANCE PRIOR TO MATURITY. Subject to certain conditions, the
Issuer at any time may terminate some or all of its obligations under the Notes
and the Indenture if the Issuer deposits with the Trustee for the benefit of the
Holders of the Notes, cash in U.S. dollars, non-callable Government Securities
or a combination of cash in U.S. dollars and non-callable Government Securities,
in amounts as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal of, and interest and
premium and Additional Interest, if any, on the Notes on the Stated Maturity or
on the applicable redemption date, as the case may be.
13. DEFAULTS AND REMEDIES. Each of the following is an Event of Default
under the Indenture: (1) default for 30 days in the payment when due of interest
on, or Additional Interest with respect to, the Notes; (2) default in payment
when due of principal of, or premium, if any, on the Notes; (3) failure by the
Issuer or any of its Restricted Subsidiaries to comply with Sections 4.09 or
4.10 or Article 5 of the Indenture; (4) failure by the Issuer or any of its
Restricted Subsidiaries for 30 days after notice to comply with Sections 4.12
and 4.18; (5) failure by the Issuer or any of its Restricted Subsidiaries for 60
days after notice to comply with any of its other agreements or covenants in the
Indenture or in the Notes; (6) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Issuer or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Issuer or
any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of the Indenture, if that default (A) is
caused by a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT"); or (B) results
in the acceleration of such Indebtedness prior to its express maturity; and in
each such case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$20.0 million or more; (7) failure by the Issuer or any of its Restricted
Subsidiaries to pay final judgments (to the extent not fully covered by
insurance) aggregating in excess of $20.0 million, which judgments
A-5
are not paid, discharged or stayed for a period of 60 consecutive days; (8)
except as permitted by the Indenture, any Subsidiary Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Subsidiary Guarantor, or any Person
acting on behalf of any Subsidiary Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee or (9) certain events of bankruptcy
or insolvency described in the Indenture with respect to the Issuer or any of
its Restricted Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency described in the Indenture, all
outstanding Notes shall become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest or Additional Interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest or
Additional Interest on, or the principal of, the Notes. The Issuer is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Issuer is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
14. TRUSTEE DEALINGS WITH ISSUER. The Trustee, 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.
15. DESIGNATED SENIOR DEBT. The Issuer hereby designates the Notes as
"Designated Senior Debt" as that term is defined in the Senior Subordinated Note
Indenture.
16. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Issuer or of any Subsidiary Guarantor, as
such, shall have any liability for any obligations of the Issuer or any
Subsidiary Guarantor under the Indenture, the Notes, the Subsidiary Guarantees
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; such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the SEC that such a waiver is
against public policy.
17. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Issuer shall furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Extendicare Health Services, Inc.
111 West Michigan Street
Milwaukee, WI 53203
Attention: Chief Financial Officer
A-6
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Issuer pursuant to
Section 4.12 or 4.18 of the Indenture, check the box below:
[ ] Section 4.12
[ ] Section 4.18
If you want to elect to have only part of the Note purchased by the Issuer
pursuant to Section 4.12 or Section 4.18 of the Indenture, state the amount you
elect to have purchased: $_____________________
Date:___________________ Your Signature:________________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:
------------------------------------------------
SIGNATURE GUARANTEE:
------------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
- ------------------------------------------------------------------------------
(Insert assignee's soc. sec. or other tax I.D. no.)
- -----------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
as agent to transfer this Note on the books of the Issuer. The agent may
substitute another to act for him.
- ------------------------------------------------------------------------------
Date: ______________
Your Signature:
----------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee:
----------------------------
A-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Principal Amount
Amount of of this Global Note Signature of
decrease in Amount of increase following such authorized signatory
Principal Amount in Principal Amount decrease (or of Trustee or
Date of Exchange of this Global Note of this Global Note increase) Note Custodian
---------------- ------------------- ------------------- --------- --------------