EXHIBIT (4)-1
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HEALTHSOUTH CORPORATION,
as Issuer,
and
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
as Trustee
INDENTURE
Dated as of May 22, 2002
7-5/8% Senior Notes due 2012, Series A
7-5/8% Senior Notes due 2012, Series B
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- --------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A
(a)(5) 7.10
(b) 7.08; 7.10; 10.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) 7.06
(b)(2) 7.06
(c) 7.06; 10.02
(d) 7.06
314(a) 4.02; 4.08; 10.02
(b) N.A.
(c)(1) 10.04; 10.05
(c)(2) 10.04; 10.05
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01; 7.02
(b) 7.05; 10.02
(c) 7.01
(d) 6.05; 7.01; 7.02
(e) 6.11
316(a) (last sentence) 2.08
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) 8.02
(b) 6.07
N.A. means Not Applicable
TIA Indenture
Section Section
- ------- --------
(c) 8.04
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
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NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS............................................................................................1
Section 1.01 Definitions....................................................................................1
Section 1.02 Other Definitions.............................................................................16
Section 1.03 Incorporation by Reference of Trust Indenture Act.............................................17
Section 1.04 Rules of Construction.........................................................................17
ARTICLE 2 THE NOTES.............................................................................................17
Section 2.01 Dating; Incorporation of Form in Indenture; Form of Notes.....................................17
Section 2.02 Execution and Authentication; Appointment of Authenticating Agent.............................18
Section 2.03 Registrar and Paying Agent....................................................................19
Section 2.04 Paying Agent To Hold Money in Trust...........................................................19
Section 2.05 Holder Lists..................................................................................20
Section 2.06 Replacement Notes.............................................................................20
Section 2.07 Outstanding Notes.............................................................................20
Section 2.08 Treasury Notes................................................................................20
Section 2.09 Temporary Notes...............................................................................21
Section 2.10 Cancellation..................................................................................21
Section 2.11 Defaulted Interest............................................................................21
Section 2.12 Deposit of Moneys; Payments...................................................................21
Section 2.13 "CUSIP" Number................................................................................22
Section 2.14 Depositary....................................................................................22
Section 2.15 Registration of Transfers and Exchanges.......................................................23
Section 2.16 Restrictive Legends...........................................................................30
ARTICLE 3 REDEMPTION............................................................................................31
Section 3.01 Notices to Trustee............................................................................31
Section 3.02 Selection of Notes To Be Redeemed.............................................................31
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
ARTICLE 4 COVENANTS.............................................................................................34
Section 4.01 Payment of Notes..............................................................................34
Section 4.02 Reports.......................................................................................34
Section 4.03 Waiver of Stay, Extension or Usury Laws.......................................................34
Section 4.04 Compliance Certificate; Notice of Default; Tax Information....................................34
Section 4.05 Payment of Taxes and Other Claims.............................................................35
Section 4.06 Corporate Existence...........................................................................35
Section 4.07 Maintenance of Office or Agency...............................................................36
Section 4.08 Compliance with Laws..........................................................................36
Section 4.09 Maintenance of Properties and Insurance.......................................................36
Section 4.10 Limitation on Restricted Payments.............................................................37
Section 4.11 Limitation on Additional Indebtedness and Subsidiary Preferred Stock..........................37
i
Section 4.12 Limitation on Asset Sales.....................................................................38
Section 4.13 Limitation on Transactions with Affiliates....................................................42
Section 4.14 Limitation on Liens Prior to the Fall-Away Event..............................................42
Section 4.15 Purchase of Notes upon a Change of Control Prior to the Fall-Away Event.......................43
Section 4.16 Limitation on Restrictions on Distributions from Subsidiaries.................................44
Section 4.17 Limitations on Layering Indebtedness..........................................................45
Section 4.18 Limitations on Liens After the Fall-Away Event................................................45
Section 4.19 Limitation on Sale and Leaseback Transactions.................................................46
ARTICLE 5 SURVIVING ENTITY......................................................................................46
Section 5.01 Limitations on Mergers and Consolidations Prior to the Fall-Away Event........................46
Section 5.02 Limitations on Mergers and Consolidations After the Fall-Away Event...........................47
Section 5.03 Successor Substituted.........................................................................47
ARTICLE 6 DEFAULTS AND REMEDIES.................................................................................47
Section 6.01 Events of Default.............................................................................47
Section 6.02 Acceleration..................................................................................48
Section 6.03 Other Remedies................................................................................49
Section 6.04 Waiver of Existing Defaults and Events of Default.............................................50
Section 6.05 Control by Majority...........................................................................50
Section 6.06 Limitation on Suits...........................................................................51
Section 6.07 Rights of Holders To Receive Payment..........................................................51
Section 6.08 Collection Suit by Trustee....................................................................51
Section 6.09 Trustee May File Proofs of Claim..............................................................51
Section 6.10 Priorities....................................................................................52
Section 6.11 Undertaking for Costs.........................................................................52
ARTICLE 7 TRUSTEE...............................................................................................52
Section 7.01 Duties of Trustee.............................................................................52
Section 7.02 Rights of Trustee.............................................................................53
Section 7.03 Individual Rights of Trustee..................................................................55
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........................................................................57
Section 7.09 Successor Trustee by Consolidation, Merger or Conversion......................................57
Section 7.10 Eligibility; Disqualification.................................................................58
Section 7.11 Preferential Collection of Claims Against Company.............................................58
ARTICLE 8 MODIFICATIONS, AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................................58
Section 8.01 Without Consent of Holders....................................................................58
Section 8.02 With Consent of Holders.......................................................................59
Section 8.03 Compliance with TIA...........................................................................60
Section 8.04 Revocation and Effect of Consents.............................................................60
Section 8.05 Notation on or Exchange of Notes..............................................................60
Section 8.06 Trustee To Sign Amendments, etc...............................................................61
ii
ARTICLE 9 DISCHARGE OF INDENTURE; DEFEASANCE....................................................................61
Section 9.01 Satisfaction and Discharge of Indenture.......................................................61
Section 9.02 Legal Defeasance..............................................................................62
Section 9.03 Covenant Defeasance...........................................................................62
Section 9.04 Conditions to Legal Defeasance or Covenant Defeasance.........................................63
Section 9.05 Application of Trust Money....................................................................64
Section 9.06 Repayment to the Company......................................................................64
Section 9.07 Reinstatement.................................................................................65
ARTICLE 10 MISCELLANEOUS........................................................................................65
Section 10.01 TIA Controls..................................................................................65
Section 10.02 Notices.......................................................................................65
Section 10.03 Communications by Holders with Other Holders..................................................66
Section 10.04 Certificate and Opinion as to Conditions Precedent............................................66
Section 10.05 Statements Required in Certificate and Opinion................................................67
Section 10.06 Rules by Trustee and Agents...................................................................67
Section 10.07 Business Days; Legal Holidays.................................................................67
Section 10.08 Governing Law.................................................................................67
Section 10.09 Waiver of Trial by Jury.......................................................................67
Section 10.10 Submission to Jurisdiction....................................................................67
Section 10.11 No Adverse Interpretation of Other Agreements.................................................68
Section 10.12 No Recourse Against Others....................................................................68
Section 10.13 Successors....................................................................................68
Section 10.14 Multiple Counterparts.........................................................................68
Section 10.15 Table of Contents, Headings, etc..............................................................68
Section 10.16 Separability..................................................................................68
Section 10.17 Translation...................................................................................68
EXHIBITS
Exhibit A Form of Initial Notes
Exhibit B Form of Exchange Notes
Exhibit C Form of Rule 144A Transfer Certificate
Exhibit D Form of Regulation S Transfer Certificate
Exhibit E Form of Rule 144 Transfer Certificate
Exhibit F Form of Accredited Investor Transfer Certificate
iii
INDENTURE, dated as of May 22, 2002, between HEALTHSOUTH CORPORATION, a
corporation incorporated in Delaware (the "Company"), as Issuer, and THE BANK OF
NOVA SCOTIA TRUST COMPANY OF NEW YORK, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of Series A
7-5/8% Senior Notes due 2012 and Series B 7-5/8% Senior Notes due 2012 and, to
provide therefor, the Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make the Notes, when duly issued and
executed by the Company, and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of the Company, have been done.
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders:
ARTICLE 1
DEFINITIONS
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Section 1.01 Definitions.
"Acquired Indebtedness" means (i) with respect to any Person that
becomes a Subsidiary of the Company after the Issue Date, Indebtedness of such
Person and its Subsidiaries existing at the time such Person becomes a
Subsidiary of the Company and (ii) with respect to the Company or any of its
Subsidiaries, any Indebtedness assumed by the Company or any of its Subsidiaries
in connection with the acquisition of an asset from another Person.
"Additional Interest" has the meaning provided to such term in the
Registration Rights Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent, co-Registrar, authenticating
agent or agent for service of notices and demands.
"Asset Sale" for any Person means the sale, lease, conveyance or other
disposition (including, without limitation, by merger or consolidation, and
whether by operation of law or otherwise) of any of that Person's assets
(including, without limitation, the sale or other disposition of Capital Stock
of any Subsidiary of such Person, whether by such Person or by such Subsidiary),
whether owned on the Issue Date or subsequently acquired, in one transaction or
a series of related transactions, in which such Person and/or its Subsidiaries
sell, lease, convey
or otherwise dispose of: (i) all or substantially all of the Capital Stock of
any of such Person's Subsidiaries; (ii) assets which constitute all or
substantially all of any division or line of business of such Person or any of
its Subsidiaries; or (iii) any other assets of such Person or any of its
Subsidiaries, other than in the ordinary course of business, provided, that the
Fair Market Value thereof shall be at least 1% of Consolidated Tangible Assets
at such time; provided, however, that the following shall not constitute Asset
Sales: (a) transactions between the Company and any of its Wholly Owned
Subsidiaries or among such Wholly Owned Subsidiaries; (b) any transaction not
prohibited by SECTION 4.10 hereof or that constitutes a Permitted Investment;
(c) any transfer of assets (including Capital Stock) that is governed by and in
accordance with ARTICLE 5 hereof or the creation of any Lien not prohibited by
SECTION 4.14 hereof; or (d) sales of damaged, worn-out or obsolete equipment or
assets that, in the Company's reasonable judgment, are no longer either used or
useful in the business of the Company or its Subsidiaries.
"Attributable Indebtedness" when used with respect to any Sale and
Leaseback Transaction means, as at the time of determination, the present value
(discounted at a rate equivalent to the interest rate implicit in the lease,
compounded on a semiannual basis) of the total obligations of the lessee for
rental payments, after excluding all amounts required to be paid on account of
maintenance and repairs, insurance, taxes, utilities and other similar expenses
payable by the lessee pursuant to the terms of the lease, during the remaining
term of the lease included in any such Sale and Leaseback Transaction or until
the earliest date on which the lessee may terminate such lease without penalty
or upon payment of a penalty (in which case the rental payments shall include
such penalty); provided, that the Attributable Indebtedness with respect to a
Sale and Leaseback Transaction shall be no less than the fair market value of
the property subject to such Sale and Leaseback Transaction.
"Bank Debt" means all obligations of the Company and its Subsidiaries,
now or hereafter existing under (i) the Credit Agreements, whether for
principal, interest, reimbursement of amounts drawn under letters of credit
issued pursuant thereto, guarantees in respect thereof, fees, expenses,
premiums, indemnities or otherwise, and (ii) any Indebtedness incurred by the
Company to extend, refund, supplement, refinance or replace, in whole or in
part, such Bank Debt, including any interest and premium on any such
Indebtedness.
"Board of Directors" means, with respect to any Person, the board of
directors or similar governing body of such Person or any duly authorized
committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such 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.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participation or other equivalents of or interest in (however designated) the
equity (including without limitation common stock, preferred stock and
partnership, joint venture and limited liability company interests) of such
Person (excluding any debt securities that are convertible into, or exchangeable
for, such equity).
2
"Capitalized Lease Obligations" of any Person means the obligation of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Certificated Note" means a Note issued in certificated form to a
Person other than the Depositary.
"Change of Control" means the occurrence at any time prior to the
occurrence of the Fall-Away Event of any of the following: (i) all or
substantially all of the Company's assets are sold as an entirety to any Person
or related group of Persons; (ii) there shall be consummated any consolidation
or merger of the Company (A) in which the Company is not the continuing or
surviving corporation (other than a consolidation or merger with a Wholly Owned
Subsidiary of the Company in which all shares of the Company's Common Equity
outstanding immediately prior to the effectiveness thereof are changed into or
exchanged for the same consideration) or (B) pursuant to which the Company's
Common Equity would be converted into cash, securities or other property, in
each case other than a consolidation or merger of the Company in which the
holders of the Company's Common Equity immediately prior to the consolidation or
merger have, directly or indirectly, at least a majority of the total voting
power of all classes of Capital Stock entitled to vote generally in the election
of directors of the continuing or surviving corporation immediately after such
consolidation or merger in substantially the same proportion as their ownership
of the Company's Common Equity immediately before such transaction; (iii) any
Person, or any Persons acting together which would constitute a "group" for
purposes of Section 13(d) of the Exchange Act, together with any affiliates
thereof, shall beneficially own (as defined in Rule 13d-3 under the Exchange
Act) at least 50% of the total voting power of all classes of Capital Stock of
the Company entitled to vote generally in the election of directors of the
Company; (iv) at any time during any consecutive two-year period, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of the Company
was approved by a vote of 66-2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (v) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, the body performing
such duties at the time.
"Common Equity" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to ARTICLE 5 hereof and
thereafter means such successor.
3
"Consolidated Amortization Expense" of any Person for any period means
the amortization expense of such Person and its Subsidiaries for such period (to
the extent included in the computation of Consolidated Net Income of such
Person), determined on a consolidated basis in accordance with GAAP.
"Consolidated Depreciation Expense" of any Person means the
depreciation expense of such Person and its Subsidiaries for such period (to the
extent included in the computation of Consolidated Net Income of such Person),
determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" of any Person means, with respect to any
determination date, Consolidated Net Income, plus (i) Consolidated Income Tax
Expense, plus (ii) Consolidated Depreciation Expense, plus (iii) Consolidated
Amortization Expense, plus (iv) Consolidated Interest Expense, plus (v) all
other unusual non-cash items or non-recurring non-cash items reducing
Consolidated Net Income of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, and less all non-cash items
increasing Consolidated Net Income of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, in each case, for
such Person's prior four full fiscal quarters for which financial results have
been reported immediately preceding the determination date.
"Consolidated Income Tax Expense" means, for any Person for any period,
the provision for taxes based on income and profits of such Person and its
Subsidiaries to the extent such provision for income taxes was deducted in
computing Consolidated Net Income of such Person for such period, determined on
a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" of any Person for any four-quarter
period means, without duplication, (i) the Interest Expense of such Person and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, plus (ii) (to the extent not otherwise included within the
definition of Interest Expense as imputed interest) one-third of the rental
expense on Attributable Indebtedness of such Person for such period determined
on a consolidated basis, plus (iii) the dividend requirements of such Person and
its Subsidiaries with respect to Disqualified Stock and with respect to all
other Preferred Stock of Subsidiaries of such Person (in each case whether in
cash or otherwise (except dividends payable solely in shares of Capital Stock
(other than Disqualified Stock) of such Person or such Subsidiary)) paid,
accrued or accumulated during such period times a fraction the numerator of
which is one and the denominator of which is one minus the then effective
consolidated Federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Net Income" of any Person for any period means the net
income (or loss) of such Person and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income (to the extent otherwise included therein),
without duplication:
(i) the net income (or loss) of any Person (other than a
Subsidiary of the referent Person) in which any Person other than the
referent Person has an ownership interest, except to the extent that
any such income has actually been received by the referent Person or
any of its Wholly Owned Subsidiaries in the form of dividends or
similar distributions during such period;
4
(ii) except to the extent includable in the consolidated net
income of the referent Person pursuant to the foregoing clause (i), the
net income (or loss) of any Person that accrues prior to the date that
(a) such Person becomes a Subsidiary of the referent Person or is
merged into or consolidated with the referent Person or any of its
Subsidiaries or (b) the assets of such Person are acquired by the
referent Person or any of its Subsidiaries;
(iii) the net income of any Subsidiary of the referent Person
(other than a Wholly Owned Subsidiary) to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary of that income is not permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary
during such period;
(iv) any gain (or loss), together with any related provisions
for taxes on any such gain, realized during such period by the referent
Person or any of its Subsidiaries upon (a) the acquisition of any
securities, or the extinguishment of any Indebtedness, of the referent
Person or any of its Subsidiaries or (b) any Asset Sale by the referent
Person or any of its Subsidiaries;
(v) any extraordinary gain or extraordinary loss, together
with any related provision for taxes or tax benefit resulting from any
such extraordinary gain or extraordinary loss, realized by the referent
Person or any of its Subsidiaries during such period; and
(vi) in the case of a successor to such Person by
consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets.
"Consolidated Net Worth" of any Person as of any date means the
stockholders' equity (including any preferred stock that is classified as equity
under GAAP, other than Disqualified Stock) of such Person and its Subsidiaries
(excluding any equity adjustment for foreign currency translation for any period
subsequent to the Issue Date) on a consolidated basis at such date, as
determined in accordance with GAAP, less all write-ups subsequent to the Issue
Date in the book value of any asset owned by such Person or any of its
Subsidiaries.
"Consolidated Tangible Assets" of the Company as of any date means the
total assets of the Company and its Subsidiaries (excluding any assets that
would be classified as "intangible assets" under GAAP) on a consolidated basis
at such date, as determined in accordance with GAAP, less all write-ups
subsequent to the Issue Date in the book value of any asset owned by the Company
or any of its Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at One Liberty Plaza, 23rd Floor, New York, New York 10006, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).
5
"Credit Agreements" mean (i) the Credit Agreement dated as of June 23,
1998 by and among the Company, as borrower, Bank of America, N.A. (as successor
to Nationsbank, National Association), as Administrative Agent and Arranger,
J.P. Morgan Securities Inc., Deutsche Bank AG and Scotiabanc, Inc., as
Syndication Agents and Co-Arrangers, and the other lenders party thereto from
time to time, together with the related documents thereto, including, without
limitation, any security documents, if any, and all exhibits and schedules
thereto, and (ii) any other credit agreement entered into by the Company or any
of its Subsidiaries for money borrowed from or guaranteed to persons, firms or
corporations which engage in the business of lending money, in order to provide
funding for the acquisition and development of healthcare facilities or to
provide for working capital needs and other corporate purposes, including, in
the case of clause (i) or (ii) above, any agreement or agreements relating to
any extension, refunding, refinancing, successor or replacement facility,
whether or not with the same lender, and whether or not the principal amount or
amount of letters of credit outstanding thereunder or the interest rate payable
in respect thereof shall be thereby increased, in each case as amended and in
effect from time to time.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Stated Maturity date of the Notes.
"DTC" means The Depository Trust Company, a New York corporation.
"DTC Letter of Representations" shall mean the Letter of
Representations, dated the Issue Date, among the Company, DTC and the Trustee.
"EBITDA Coverage Ratio" with respect to any four-quarter period means
the ratio of (i) Consolidated EBITDA of the Company to (ii) the aggregate amount
of Consolidated Interest Expense of the Company for such period; provided,
however, that if any calculation of the Company's EBITDA Coverage Ratio requires
the use of any quarter prior to the Issue Date, such calculation shall be made
on a pro forma basis, giving effect to the issuance of the Notes and the use of
the net proceeds therefrom as if the same had occurred at the beginning of the
four-quarter period used to make such calculation; and provided further that if
any such calculation requires the use of any quarter prior to the date that any
Asset Sale was consummated, or that any Indebtedness was incurred, or that any
acquisition of a hospital or other healthcare facility or any assets purchased
outside the ordinary course of business was effected, by the Company or any of
its Subsidiaries, such calculation shall be made on a pro forma basis, giving
effect to each such Asset Sale, incurrence of Indebtedness or acquisition, as
the case may be, and the use of any proceeds therefrom, as if the same had
occurred at the beginning of the four-quarter period used to make such
calculation.
6
"Eligible Investments" of any Person means Investments of such Person
in:
(i) direct obligations of, or obligations the payment of which
is guaranteed by, the United States of America or an interest in any
trust or fund that invests solely in such obligations or repurchase
agreements, properly secured, with respect to such obligations;
(ii) direct obligations of agencies or instrumentalities of
the United States of America having a rating of A or higher by S&P or
A2 or higher by Moody's;
(iii) a certificate of deposit issued by, or other
interest-bearing deposits with, a bank having its principal place of
business in the United States of America and having equity capital of
not less than $250,000,000;
(iv) a certificate of deposit issued by, or other
interest-bearing deposits with, any other bank organized under the laws
of the United States of America or any state thereof, provided that
such deposit is either (a) insured by the Federal Deposit Insurance
Corporation or (b) properly secured by such bank by pledging direct
obligations of the United States of America having a market value of
not less than the face amount of such deposits;
(v) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a rating of
A-1 or higher by S&P, or P-1 or higher by Moody's; or
(vi) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one year, in
each case having a rating of, or evidencing the full recourse
obligation of a person whose senior debt is rated, A or higher by S&P
or A2 or higher by Moody's.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Series B 7-5/8% Senior Notes due 2012 (the
terms of which are identical to the Initial Notes except that, unless any
Exchange Notes shall be issued as Private Exchange Notes (as defined in the
Registration Rights Agreement), the Exchange Notes shall be registered under the
Securities Act, and shall not contain the restrictive legend on the face of the
form of the Initial Notes), to be issued in exchange for the Initial Notes
pursuant to the registered Exchange Offer or a Private Exchange (as defined in
the Registration Rights Agreement).
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Notes to exchange all the Initial Notes held by
such Holder for the Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
7
"Exempted Debt" means the sum of the following as of any date of
determination: (i) Indebtedness of the Company and its Subsidiaries incurred
after the Issue Date and secured by Liens not otherwise permitted by SECTION
4.14 hereof or SECTION 4.18 hereof, as the case may be, and (ii) Attributable
Indebtedness of the Company and its Subsidiaries in respect of every Sale and
Leaseback Transaction entered into after the Issue Date.
"Existing Indebtedness" means all of the Indebtedness of the Company
and its Subsidiaries that is outstanding on the Issue Date.
"Fair Market Value" of any asset or items means the fair market value
of such asset or items as determined in good faith by the Board of Directors and
evidenced by a resolution of the Board of Directors.
"Fall-Away Event" means the Notes shall have been rated Investment
Grade and, if no Event of Default or Default shall have occurred and be
continuing at such time, the Company shall have delivered to the Trustee an
Officers' Certificate certifying as to the foregoing.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States of America, as from time to time in effect.
"guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down under letters of credit.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement relating to interest rates or foreign exchange
rates.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books or records.
"Indebtedness" of any Person at any date means, without duplication:
(i) all indebtedness of such Person for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof); (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto); (iv) all obligations of such
Person with respect to Hedging Obligations (other than those that fix the
interest rate on variable rate indebtedness otherwise permitted by this
Indenture or that protect the Company and/or its Subsidiaries against changes in
foreign exchange rates); (v) all obligations of such Person to pay the deferred
and unpaid purchase price
8
of property or services, except trade payables and accrued expenses incurred in
the ordinary course of business; (vi) all Capitalized Lease Obligations of such
Person; (vii) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person; (viii) all
Indebtedness of others guaranteed by such Person to the extent of such
guarantee; (ix) all Attributable Indebtedness; and (x) all Disqualified Stock of
such Person and its Subsidiaries and all other Preferred Stock of Subsidiaries
of such Person valued at the greater of (a) the voluntary or involuntary
liquidation preference of such Disqualified Stock or such Preferred Stock, as
the case may be, and (b) the aggregate amount payable upon purchase, redemption,
defeasance or payment of such Disqualified Stock or such Preferred Stock, as the
case may be. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations plus past due
interest as described above, the maximum liability of such Person for any such
contingent obligations at such date and, in the case of clause (vii), the amount
of the Indebtedness secured.
"Indenture" means this Indenture as amended, restated or supplemented
from time to time.
"Initial Notes" means the Series A 7-5/8% Senior Notes due 2012 of the
Company issued on the Issue Date and authenticated and delivered under this
Indenture pursuant to SECTION 2.02 of this Indenture and any other notes (other
than Exchange Notes) issued after the Issue Date in accordance with the fourth
paragraph of SECTION 2.02.
"Initial Purchasers" refers to UBS Warburg LLC, Deutsche Bank
Securities Inc., Banc of America Securities LLC, Scotia Capital (USA) Inc.,
First Union Securities, Inc., J.P. Morgan Securities Inc., Fleet Securities,
Inc., Salomon Smith Barney Inc., NatCity Investments, Inc. and Jefferies &
Company, Inc.
"Interest Expense" of any Person for any period means the aggregate
amount of interest which, in accordance with GAAP, would be set opposite the
caption "interest expense" or any like caption on an income statement for such
Person (including, without limitation or duplication, imputed interest included
in Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, the net costs associated with Hedging Obligations, amortization of
financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount and all other non-cash interest expense
other than interest amortized to cost of sales) plus the aggregate amount, if
any, by which such interest expense was reduced as a result of the amortization
of deferred debt restructuring credits for such period.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes as specified in the forms of Note attached hereto as
Exhibits A and B.
"Investment Grade" means (i) a rating of BBB- or above, in the case of
S&P (or its equivalent under any successor Rating Categories of S&P), and Baa3
or above, in the case of Moody's (or its equivalent under any successor Rating
Categories of Moody's), or (ii) the equivalent in respect of the Rating
Categories of any other Rating Agencies; provided, however, that if such rating
is BBB- in the case of S&P, or Baa3 in the case of Moody's (or the equivalent in
respect of the Rating Categories of any other Rating Agencies), then such rating
also shall not be accompanied by a negative outlook, negative credit watch or
review for possible downgrade (or the equivalent thereof), as the case may be.
9
"Investments" of any Person means: (i) all investments by such Person
in any other Person in the form of loans, advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business); (ii) all guarantees of Indebtedness or
other obligations of any other Person by such Person; (iii) all purchases (or
other acquisitions for consideration) by such Person of Indebtedness, Capital
Stock or other securities of any other Person; and (iv) all other items that
would be classified as investments (including, without limitation, purchases of
assets outside the ordinary course of business) on a balance sheet of such
Person prepared in accordance with GAAP.
"Issue Date" means May 22, 2002, the date the Initial Notes are
initially issued.
"Joint Venture" means any Person at least a majority of whose revenues
result from healthcare related businesses or facilities.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other similar encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including, without limitation, any conditional sale or other
title retention agreement, and any financing lease in the nature thereof, any
agreement to sell, and any filing of, or agreement to give, any financing
statement (other than notice filings not perfecting a security interest) under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Proceeds" with respect to any Asset Sale means (i) cash (in U.S.
dollars or freely convertible into U.S. dollars) received by the Company or any
of its Subsidiaries from such Asset Sale (including, without limitation, cash
received as consideration for the assumption or incurrence of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale or the transfer of the proceeds of such Asset Sale to the Company or any of
its Subsidiaries, (b) payment of all commissions and other fees and expenses
related to such Asset Sale and (c) deduction of an appropriate amount to be
provided by the Company or any of its Subsidiaries as a reserve, in accordance
with GAAP, against any liabilities associated with the assets sold or otherwise
disposed of in such Asset Sale and retained by the Company or any of its
Subsidiaries after such Asset Sale (including, without limitation, pension and
other post-employment benefit liabilities and liabilities related to
environmental matters) or against any indemnification obligations associated
with the sale or other disposition of the assets sold or otherwise disposed of
in such Asset Sale and (ii) all non-cash consideration received by the Company
or any of its Subsidiaries from such Asset Sales upon the liquidation or
conversion of such consideration into cash.
"Notes" means the Initial Notes and the Exchange Notes treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
10
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, Chief Accounting
Officer, Treasurer, President, any Vice President, secretary, assistant
secretary, director or other authorized signatory of such Person.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President or any Vice President and by the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company in their official (and
not individual) capacities; provided, however, that every Officers' Certificate
with respect to the compliance with a condition precedent to the taking of any
action under this Indenture shall include (i) a statement that the officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Indenture relating thereto and
(ii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"Opinion of Counsel" means a written opinion from legal counsel (such
counsel may be an employee of or counsel to the Company or the Trustee) that
complies with the requirements of this Indenture.
"Permitted Investments" means: (i) capital contributions, advances or
loans to the Company by any Subsidiary or by the Company or any of its
Subsidiaries to a Subsidiary of the Company; (ii) the acquisition and holding by
the Company and each of its Subsidiaries of receivables owing to the Company and
such Subsidiary, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; (iii) the
acquisition and holding by the Company and its Subsidiaries of cash and Eligible
Investments; (iv) Investments in any Person as a result of which such other
Person becomes a Subsidiary of the Company or is merged into or consolidated
with or transfers all or substantially all of its assets to the Company or any
of its Subsidiaries; and (v) the making of an Investment by the Company,
directly or through a Wholly Owned Subsidiary, in a Wholly Owned Subsidiary
formed solely for the purpose of insuring the healthcare business and facilities
owned or operated by the Company or a Subsidiary and any physician employed by
or on the staff of any such business or facility (the "Insurance Subsidiary"),
provided that the amount invested in such Insurance Subsidiary does not exceed
$15,000,000.
"Permitted Liens" means: (i) Liens for taxes, assessments or
governmental charges or claims that either (a) are not yet delinquent or (b) are
being contested in good faith by appropriate proceedings; (ii) statutory Liens
of landlords and carriers', warehousemen's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts that either (a) are not yet delinquent or
(b) are being contested in good faith by appropriate proceedings and as to which
appropriate reserves or other provisions have been made in accordance with GAAP;
(iii) Liens (other than any Lien imposed by the Employee Retirement Income
Security Act of 1974, as amended) incurred or deposits due in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, progress payments, government contracts and other
obligations of like nature (exclusive of obligations for the payment of borrowed
money), in each case, incurred in the ordinary course of
11
business; (v) attachment or judgment Liens not giving rise to a Default or an
Event of Default; (vi) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering with the ordinary conduct of the
business of the Company or any of its Subsidiaries; (vii) leases or subleases
granted to others not interfering with the ordinary conduct of the business of
the Company or any of its Subsidiaries; (viii) Liens with respect to any
Acquired Indebtedness; provided that such Liens only extend to assets that were
subject to such Liens prior to the acquisition of such assets by the Company or
its Subsidiaries and, with respect to Indebtedness other than Indebtedness
ranking pari passu with the Notes, not incurred in anticipation or contemplation
of such acquisition; (ix) Liens securing Bank Debt or Refinancing Indebtedness;
provided, in the case of Refinancing Indebtedness, that such Liens only extend
to the assets securing the Indebtedness being refinanced and such refinanced
Indebtedness was previously secured by such assets; (x) purchase money mortgages
(including Capitalized Lease Obligations); (xi) Liens existing on the Issue
Date; (xii) Liens on assets of any Subsidiary of the Company securing
Indebtedness of such Subsidiary; provided that such Indebtedness is permitted to
be incurred by the terms of this Indenture; (xiii) bankers' liens with respect
to the right of set-off arising in the ordinary course of business against
amounts maintained in bank accounts or certificates of deposit in the name of
the Company or any Subsidiary; (xiv) the interest of any issuer of a letter of
credit in any cash or Eligible Investment deposited with or for the benefit of
such issuer as collateral for such letter of credit; provided that the
Indebtedness so collateralized is permitted to be incurred by the terms of this
Indenture; (xv) any Lien consisting of a right of first refusal or option to
purchase the Company's ownership interest in any Subsidiary or to purchase
assets of the Company or any Subsidiary of the Company, which right of first
refusal or option is entered into in the ordinary course of business; and (xvi)
the Lien granted to the Trustee pursuant to the trust created pursuant to
ARTICLE 9 hereof and any substantially equivalent Lien granted to the respective
trustees under the indentures for other debt securities of the Company.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Preferred Stock" means with respect to any Person all Capital Stock of
such Person which has a preference in liquidation or a preference with respect
to the payment of dividends or distributions of operating profit or cash.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A.
"Rating Agencies" means (i) S&P and Moody's or (ii) if S&P or Moody's
or both of them are not making ratings of the Notes publicly available, a
nationally recognized U.S. rating agency or agencies, as the case may be,
selected by the Company, which will be substituted for S&P or Moody's or both,
as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories (any of which may include a "+" or "-"): AAA, AA, A, BBB, BB, B, CCC,
CC, C and D (or equivalent successor categories); (ii) with respect to Moody's,
any of the following categories (any of which may include a "1", "2" or "3"):
Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories);
and (iii) the equivalent of any such categories of S&P or Moody's used by
another Rating Agency, if applicable.
12
"Record Date" for interest payable on any Interest Payment Date (except
a date for payment of default interest) means the May 15 or November 15 (whether
or not a Business Day), as the case may be, immediately preceding such Interest
Payment Date.
"Redemption Date" when used with respect to any Note to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Note to be redeemed
means the price fixed for such redemption pursuant to this Indenture or such
Note.
"Refinancing Indebtedness" means Indebtedness incurred in exchange for,
or the net proceeds of which are applied to refund, refinance or extend, any
Indebtedness; provided that: (i) the Refinancing Indebtedness is the obligation
of the same Person (or if the Indebtedness being refinanced is an obligation of
one or more Subsidiaries of the Company, such Refinancing Indebtedness may be
incurred by the Company or one or more Subsidiaries of the Company) and is
subordinated to the Notes, if at all, to the same extent as the Indebtedness
being refunded, refinanced or extended; (ii) the Refinancing Indebtedness is
scheduled to mature no earlier than the Indebtedness being refunded, refinanced
or extended; (iii) the Refinancing Indebtedness has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is incurred that is equal to
or greater than the Weighted Average Life to Maturity of the portion of the
Indebtedness being refunded, refinanced or extended; (iv) the Refinancing
Indebtedness is secured only to the extent, if at all, and by the assets that
the Indebtedness being refunded, refinanced or extended is secured; and (v) such
Refinancing Indebtedness is in an aggregate principal amount that is equal to or
less than the aggregate principal amount then outstanding under the Indebtedness
being refunded, refinanced or extended (except for issuance costs and increases
in Attributable Indebtedness due solely to increases in the present value
calculations resulting from renewals or extensions of the terms of the
underlying leases in effect on the Issue Date).
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of May 22, 2002 among the Company and the Initial Purchasers.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Distribution Compliance Period" means, with respect to
any Note, the period of forty (40) consecutive days beginning on and including
the first day after the later of (i) the day on which such Note is first offered
to Persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the closing date of the offering of such Note.
"Restricted Payment" means with respect to any Person: (i) the
declaration of any dividend or the making of any other payment or distribution
of cash, securities or other property or assets in respect of such Person's
Capital Stock (except that a dividend payable solely in Capital Stock (other
than Disqualified Stock) of such Person shall not constitute a Restricted
Payment); (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of such Person's or such Person's Subsidiaries'
Capital Stock or any other
13
payment or distribution made in respect thereof, either directly or indirectly;
(iii) any payment on account of the purchase, redemption, retirement, defeasance
or other acquisition for value, prior to any scheduled principal payment,
sinking fund payment or Stated Maturity, of Subordinated Indebtedness of the
Company or its Subsidiaries; (iv) the incurrence, creation or assumption of any
guarantee of Indebtedness of any Affiliate (other than a Subsidiary of the
Company); or (v) the making of any Investment in any Person (other than
Permitted Investments); provided, however, that with respect to the Company and
its Subsidiaries, Restricted Payments shall not include any payment described in
clause (i), (ii) or (iii) above made (1) to the Company or any of its Wholly
Owned Subsidiaries by any of the Company's Subsidiaries or (2) by the Company to
any of its Wholly Owned Subsidiaries or (3) by any Subsidiary, provided that the
Company or another Subsidiary receives its proportionate share thereof.
"Restricted Security" means any Note (or beneficial interest therein)
other than an Exchange Note (or beneficial interest therein), until such time
as: (i) such Note (or beneficial interest therein) has been transferred pursuant
to an effective registration statement under the Securities Act; (ii) such Note
is a 144A Global Note and two years have passed since the Issue Date; (iii) such
Note is a Regulation S Global Note and the Regulation S Distribution Compliance
Period has expired; or (iv) the Private Placement Legend therefor has otherwise
been removed pursuant to SECTION 2.15(C) hereof or, in the case of a beneficial
interest in a Global Note, such beneficial interest has been exchanged for an
interest in a Global Note not bearing a Private Placement Legend.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"S&P" means Standard & Poor's Rating Services, a division of
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means, with respect to any Person, an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person or any of its Subsidiaries of any property or asset of such Person or any
of its Subsidiaries which has been or is being sold or transferred by such
Person or such Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such property or asset.
"Secretary's Certificate" means a certificate signed by the Secretary
or any Assistant Secretary of the Company in his or her official (and not
individual) capacity.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means a Subsidiary of the Company which at the
time of determination either (i) had tangible assets which, as of the Company's
most recent quarterly consolidated balance sheet, constituted at least 5% of
Consolidated Tangible Assets as of such date, or (ii) had revenues for the
12-month period ending on the date of the Company's most recent quarterly
consolidated statement of income which constituted at least 5% of the Company's
total consolidated revenues for such period.
14
"Stated Maturity" when used with respect to any security or any
installment of interest thereon, means that date specified in such security as
the fixed date on which the principal of such security or such installment of
interest is due and payable.
"Subordinated Indebtedness" of any Person means any Indebtedness of
such Person that is subordinated in right of payment to the Notes.
"Subsidiary" of any Person means (i) any corporation of which Common
Equity having ordinary voting power to elect a majority of the directors of such
corporation is owned by such Person directly or through one or more other
Subsidiaries of such Person and (ii) any entity other than a corporation in
which such Person, directly or indirectly, owns at least 50% of the Common
Equity of such entity and has the authority to manage such entity on a
day-to-day basis.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture
(except as provided in SECTION 8.03 hereof).
"Trust Officer" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant treasurer, trust officer or any
other officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such Person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"U.S. Government Obligations" means (a) securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or portion thereof at any date, the number of years obtained by
dividing (i) the then outstanding principal amount of such Indebtedness or
portion thereof (if applicable) into (ii) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking
15
fund, serial maturity or other required payment of principal, including payment
at final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment.
"Wholly Owned Subsidiary" of any Person means (i) a Subsidiary of which
100% of the Common Equity (except for director's qualifying shares or certain
minority interests owned by other Persons solely due to local law requirements
that there be more than one stockholder, but which interest is not in excess of
what is required for such purpose) is owned directly by such Person or through
one or more other Wholly Owned Subsidiaries of such Person and (ii) any entity
other than a corporation in which such Person, directly or indirectly, owns all
of the Common Equity of such entity.
Section 1.02 Other Definitions. The definitions of the following terms
may be found in the sections indicated as follows:
Term Defined in Section
---- ------------------
"Accredited Investors"................................................... 2.01
--------------------
"Affiliate Transaction".................................................. 4.13
---------------------
"Agent Members".......................................................... 2.14
-------------
"Applicable Procedures".................................................. 2.15
---------------------
"Asset Sale Offer"....................................................... 4.12
----------------
"Asset Sale Payment Amount".............................................. 4.12
-------------------------
"Asset Sale Purchase Price".............................................. 4.12
-------------------------
"Bankruptcy Law"......................................................... 6.01
--------------
"Business Day"........................................................... 10.07
------------
"Change of Control Offer"................................................ 4.15
-----------------------
"Change of Control Payment Date"......................................... 4.15
------------------------------
"Change of Control Purchase Price"....................................... 4.15
--------------------------------
"Clearstream"............................................................ 2.01
-----------
"Covenant Defeasance".................................................... 9.03
-------------------
"Depositary"............................................................. 2.14
----------
"Euroclear".............................................................. 2.01
---------
"Event of Default"....................................................... 6.01
----------------
"Excess Proceeds"........................................................ 4.12
---------------
"Excess Proceeds Payment Date"........................................... 4.12
----------------------------
"Global Notes"........................................................... 2.01
------------
"Legal Defeasance"....................................................... 9.02
----------------
"Legal Holiday".......................................................... 10.07
-------------
"Make-Whole Premium"..................................................... Exhibit A/Exhibit B
------------------
"Net Proceeds Deficiency"................................................ 4.12
-----------------------
"Other Debt"............................................................. 4.12
----------
"Paying Agent"........................................................... 2.03
------------
"Private Placement Legend"............................................... 2.16
------------------------
"Registrar".............................................................. 2.03
---------
"Regulation S Global Note"............................................... 2.01
------------------------
"Restricted Global Note"................................................. 2.01
----------------------
"Successor".............................................................. 5.01
---------
16
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the portion of such
provision required to be incorporated herein in order for this Indenture to be
qualified under the TIA is incorporated by reference in and made a part of this
Indenture. Unless otherwise specified, terms used in this Indenture that are
defined by the TIA, defined in the TIA by reference to another statute or
defined by Commission rule have the meanings therein assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it herein, whether
defined expressly or by reference;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) words used herein implying any gender shall apply to every
gender.
ARTICLE 2
THE NOTES
---------
Section 2.01 Dating; Incorporation of Form in Indenture; Form of Notes.
(a) Generally. The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A, and the Exchange Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit B, each of which is incorporated in and made part of this Indenture with
such appropriate insertions, substitutions and other variations as are required
or permitted by this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage all in a form
approved by the Company. Each Note shall be dated the date of its
authentication.
(b) Notes Sold Pursuant to Rule 144A. The Notes offered and sold in
their initial distribution in reliance on Rule 144A to Qualified Institutional
Buyers shall be issued in the form of a permanent global note (the "Restricted
Global Note") (which may be represented by more than one certificate, if so
required by the Depositary's rules regarding the maximum principal amount to be
represented by a single certificate), duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Restricted Global Note
shall be registered in the name of the Depositary or its nominee and deposited
with the Trustee, at its Corporate Trust Office, as custodian for the Depositary
on behalf of the purchasers of the Notes represented thereby.
17
(c) Notes Sold Pursuant to Regulation S. The Notes offered and sold in
their initial distribution in reliance on Regulation S shall be issued in the
form of a permanent global note (the "Regulation S Global Note" and, together
with the Restricted Global Note, the "Global Notes") (which may be represented
by more than one certificate, if so required by the Depositary's rules regarding
the maximum principal amount to be represented by a single certificate), duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Regulation S Global Note shall be registered in the name of the
Depositary or its nominee and deposited with the Trustee, at its Corporate Trust
Office, as custodian for the Depositary for credit to the respective accounts of
The Euroclear System ("Euroclear") and Clearstream Banking, societe anonyme
("Clearstream"). Prior to the termination of the Regulation S Distribution
Compliance Period, beneficial interests in the Regulation S Global Note may be
held only through Euroclear and Clearstream.
(d) Notes Sold to Institutional Accredited Investors. The Notes offered
and sold in their initial distribution in reliance on an exemption from
registration under the Securities Act (other than Rule 144A or Regulation S) to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act ("Accredited Investors")) shall be issued in
certificated, fully registered form without coupons and only in denominations of
$250,000 and integral multiples of $1,000 in excess thereof, duly executed by
the Company and authenticated by the Trustee as hereinafter provided.
Section 2.02 Execution and Authentication; Appointment of
Authenticating Agent. The Notes shall be executed on behalf of the Company by
one or more Officers of the Company. Such signature may be either manual or
facsimile.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue on
the Issue Date in the aggregate principal amount of $1,000,000,000, (ii)
pursuant to the Exchange Offer, Exchange Notes from time to time for issue only
in exchange for a like principal amount of Initial Notes, (iii) any other Notes
that have been executed by the Company in order to effect any transfer or
exchange in accordance with the provisions of SECTION 2.15 and (iv) any
additional Initial Notes issued by the Company after the Issue Date pursuant to
the next sentence of this paragraph. Initial Notes need not be issued at one
time and, unless otherwise provided, Initial Notes may also be issued by the
Company and authenticated and delivered under this Indenture after the Issue
Date on the same terms and conditions (other than the Issue Date and the issue
price) and with the same CUSIP number as the Initial Notes issued on the Issue
Date and in an aggregate principal amount, together with the Initial Notes
issued on the Issue Date, exceeding the amount set forth in clause (i) above.
18
Except as provided in SECTION 2.01(D), the Notes shall be issuable only
in definitive, fully registered form without coupons and only in minimum
denominations of $1,000 and integral multiples thereof.
The Trustee, with the approval of the Company, may appoint an
authenticating agent to authenticate Notes. Any such appointment shall be
evidenced by an instrument signed by an authorized officer of the Trustee, a
copy of which shall be furnished to the Company. 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, and shall comply with this Indenture. An authenticating agent has the
same right as an Agent to deal with the Company or an Affiliate.
Section 2.03 Registrar and Paying Agent. The Company shall maintain an
office or agency in the Borough of Manhattan, The City of New York where (a)
Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands in respect of Notes and this
Indenture may be served. The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Registrar shall provide the Company a current
copy of such register from time to time upon request of the Company. The Company
may have one or more co-Registrars and one or more additional Paying Agents. The
Company may change any Paying Agent, Registrar or co-Registrar without notice to
any Holder. The Company may not act as Paying Agent, but may act as Registrar or
co-Registrar.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall incorporate
the provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee in
writing of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, or agent for service of notices and
demands, or fails to give the foregoing notice, the Company shall notify the
Trustee and the Trustee shall to the extent that it is capable act as such for
so long as such failure continues.
The Company initially appoints the Trustee as Registrar and Paying
Agent in the Borough of Manhattan, The City of New York.
Section 2.04 Paying Agent To Hold Money in Trust. Before 10:00 A.M. New
York City time on each payment date of the principal of and/or interest on any
Notes, the Company shall deposit with the Paying Agent a sum sufficient to pay
such principal and interest so becoming due. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee together with a
complete accounting of such sums, and the Trustee may at any time during the
continuance of any Event of Default under SECTION 6.01(A) or (B) hereof, upon
written request to a Paying Agent, require such Paying Agent to forthwith pay to
the Trustee all sums so held in trust by such Paying Agent together with a
complete accounting of such sums. Upon doing so, the Paying Agent shall have no
further liability for the money. Funds deposited with the Paying Agent may be
invested as agreed from time to time by the Company and the Paying Agent. All
payments made hereunder shall be in U.S. legal tender.
19
Section 2.05 Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least five Business Days before each Interest
Payment Date and the Stated Maturity and at such other times as the Trustee may
reasonably request in writing, a list in such form and as of such date as the
Trustee may require of the names and addresses of Holders.
Section 2.06 Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder of a Note claims that a Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's requirements for replacement
are met. An indemnity bond may be required by the Company or the Trustee that is
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Note is replaced and evidence to their satisfaction of apparent loss,
destruction or theft of such Note may be required by the Company, the Trustee or
any Agent. The Company and the Trustee may charge for their reasonable
out-of-pocket expenses (including reasonable attorneys' fees and expenses and
any applicable taxes) in replacing a Note pursuant to this SECTION 2.06. In the
event any such mutilated, lost, destroyed or wrongfully taken Note has become
due and payable, the Company in its discretion may pay such Note instead of
issuing a new Note in replacement thereof. If after the delivery of such new
Note, a bona fide purchaser of the original Note in lieu of which such new Note
was issued presents for payment such original Note, the Company and the Trustee
shall be entitled to recover such new Note from the person to whom it was
delivered or any transferee thereof, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Company or the
Trustee in connection therewith.
Every replacement Note is an additional obligation of the Company.
Section 2.07 Outstanding Notes. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this SECTION 2.07 as not
outstanding.
A Note replaced pursuant to SECTION 2.06 hereof (other than a mutilated
Note surrendered for replacement) ceases to be outstanding unless and until the
Trustee receives proof satisfactory to it that such replaced Note is held by a
protected purchaser.
If a Paying Agent holds on a Redemption Date or at Stated Maturity U.S.
legal tender sufficient to pay the principal of, premium, if any, and accrued
interest on Notes (or portions thereof) payable on that date, then on and after
that date, such Notes (or portions thereof) cease to be outstanding and interest
on them ceases to accrue.
Section 2.08 Treasury Notes. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver,
consent or notice, Notes owned by the Company or any of its Affiliates shall be
considered as though they are 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 which a Trust Officer of the Trustee
actually knows are so owned shall be so considered. The Company shall notify the
Trustee, in writing, when it or any of its Affiliates repurchases or otherwise
acquires Notes and of the aggregate principal amount of such Notes so
repurchased or otherwise acquired.
20
Section 2.09 Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form, and shall carry all
rights and restrictions, of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes upon surrender of such temporary Notes at the
office or agency maintained pursuant to SECTION 2.03 hereof.
Section 2.10 Cancellation. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for transfer, exchange or payment.
The Trustee shall cancel all Notes surrendered for transfer, exchange, payment
or cancellation and, unless the Company instructs the Trustee in writing to
deliver the Notes to the Company, shall dispose of such Notes in accordance with
its normal practice. Subject to SECTION 2.06 hereof, the Company may not issue
new Notes to replace Notes in respect of which it has previously paid all
principal, premium, if any, and interest accrued thereon, or delivered to the
Trustee for cancellation. The Trustee shall provide the Company with a list of
all Notes that have been canceled from time to time as requested in writing by
the Company. If the Company shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this SECTION 2.10.
Section 2.11 Defaulted Interest. If the Company defaults in a payment
of principal or interest on the Notes, it shall pay interest on overdue
principal and on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate per annum
borne by the Notes, to the extent lawful.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, to the Persons who are Holders on a subsequent special
Record Date, which date shall be the fifteenth day next preceding the date fixed
by the Company for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special Record Date, the Company shall mail to each Holder, as of a
recent date selected by the Company, with a copy to the Trustee, a notice that
states the subsequent special Record Date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in SECTION 6.01(A) hereof shall be
paid to Holders as of the Record Date for the Interest Payment Date for which
interest has not been paid.
Section 2.12 Deposit of Moneys; Payments. Prior to 10:00 A.M., New York
City time, on the relevant Interest Payment Date, Stated Maturity, Redemption
Date, Change of Control Purchase Date and Excess Proceeds Payment Date, the
Company shall have deposited with the
21
Paying Agent in immediately available funds money sufficient to make all cash
payments due on such Interest Payment Date, Stated Maturity, Redemption Date,
Change of Control Purchase Date and Excess Proceeds Payment Date, as the case
may be (or if any such date is not a Business Day, the first preceding Business
Day). The principal and interest on Global Notes shall be payable to the
Depositary or its nominee, as the case may be, as the sole registered owner and
the sole holder of the Global Notes represented thereby. The principal and
interest on Certificated Notes, if any, shall be payable at the office of the
Paying Agents. The Paying Agents shall pay the Company any excess cash remaining
on deposit after all payments have been made with respect to a given Interest
Payment Date, Stated Maturity, Redemption Date, Change of Control Purchase Date
or Excess Proceeds Payment Date, as the case may be. All payments made hereunder
shall be in U.S. legal tender.
Section 2.13 "CUSIP" Number. The Company in issuing the Notes may use
"CUSIP" number(s) and the Trustee shall use the "CUSIP" numbers(s) in notices of
redemption or exchange as a convenience to Holders; provided that neither the
Company nor the Trustee shall have any responsibility for any defect in the
"CUSIP" number that appears on any Note, check, advice or payment or redemption
notice, and any such notice may state that no representation is made as to the
correctness or accuracy of the "CUSIP" number(s) printed in the notice or on the
Notes, and that reliance may be placed only on the other identification numbers
printed on the Notes and any such redemption or exchange shall not be affected
by any defect in or omission of such number(s). The Company shall promptly
notify the Trustee of any changes in "CUSIP" numbers.
Section 2.14 Depositary. (a) The Company hereby appoints DTC to act as
depositary (in such capacity, together with its successors in such capacity, the
"Depositary") with respect to the Global Notes. The Trustee shall act as
custodian of the Global Notes for the Depositary. So long as the Depositary or
its nominee, Cede & Co., is the registered owner of the Global Notes, it shall
be considered the Holder of the Notes represented thereby for all purposes
hereunder and under the Global Notes, and neither any members of, or
participants in, the Depositary ("Agent Members") nor any other Persons on whose
behalf Agent Members may act shall have any rights hereunder with respect to the
Global Notes or under the Global Notes. 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 its nominee, as the case may be, or
impair, as between the Depositary, its Agent Members and any other Person on
whose behalf an Agent Member may act, the operation of customary practices of
such Persons governing the exercise of the rights of a Holder of any Note.
(b) The Company may remove or replace DTC or any successor as
Depositary for any reason upon thirty (30) days' notice to DTC or such
successor. The Holders shall have no right to a depositary for the Notes.
(c) Notwithstanding any other provision of this Indenture or the Notes,
so long as DTC or its nominee is the registered owner of the Notes:
(i) the provisions of the DTC Letter of Representations shall
control over the provisions of this Indenture with respect to the
matters covered thereby;
22
(ii) presentation of Notes to the Trustee at redemption or at
maturity shall be deemed made to the Trustee when the right to exercise
ownership rights in the Notes through DTC or Agent Members is
transferred by DTC on its books; and
(iii) DTC may present notices, approvals, waivers or other
communications required or permitted to be made by Holders under this
Indenture on a fractionalized basis on behalf of some or all of those
Persons entitled to exercise ownership rights in the Notes through DTC
or Agent Members.
Section 2.15 Registration of Transfers and Exchanges. (a) Transfer and
Exchange Generally. (i) The Notes are transferable only upon the surrender
thereof for registration of transfer. When a Note is presented to the Registrar
with a duly executed instrument of assignment and transfer substantially in the
form of assignment attached to Exhibit A or B, as applicable, the Registrar
shall register the transfer as requested if such transfer complies with the
provisions hereof. Prior to the due presentation for registration of transfer of
any Note, the Person in whose name such Note is registered shall be treated as
the absolute owner of such Note for the purpose of receiving payment of
principal of, premium (if any) and interest on such Note (whether or not such
payment is overdue) and for all other purposes whatsoever, notwithstanding any
notice to the contrary. Registration of transfer of any Note by the Registrar
shall be deemed to be an acknowledgment of such transfer by the Company.
(ii) When Notes are presented to the Registrar with a written
request to exchange such Notes for Notes of any authorized
denominations and of a like aggregate principal amount, the Registrar
shall make the exchange as requested if such exchange complies with the
provisions of this SECTION 2.15(A).
(iii) Following any request for transfer or exchange of one or
more Notes made in compliance with clauses (i) or (ii), as the case may
be, of this SECTION 2.15(A), the Company shall execute, and the Trustee
shall authenticate and deliver, one or more new Notes of a like
principal amount and in such authorized denominations as may be
requested. Any exchange or transfer shall be without charge, except
that the Company may require payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation to a transfer or exchange other than any exchange pursuant to
SECTION 2.09, 3.06, 4.12, 4.15 or 8.05 hereof.
(iv) Transfers or exchanges of the Global Notes and beneficial
interests therein shall be subject to the provisions of SECTION 2.15(B)
and the rules of the Depositary. Transfers or exchanges of Certificated
Notes shall be subject to the provisions of SECTION 2.15(C).
(v) Except as otherwise provided herein, the Global Notes and
each Certificated Note shall bear the Private Placement Legend as set
forth in SECTION 2.16. By its acceptance of any Note bearing the
Private Placement Legend, whether upon original issuance or subsequent
transfer, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as
provided in this
23
Indenture. Upon the specific written request of a Holder to remove the
Private Placement Legend, the Registrar shall authenticate and deliver
a Note with an equivalent principal amount not bearing the Private
Placement Legend if there is provided to the Company evidence
reasonably satisfactory to the Company (which may, at the Company's
request, include an Opinion of Counsel) that neither the Private
Placement Legend nor the restrictions on transfer set forth therein are
required to ensure compliance with the Securities Act. Upon a written
request for the registration of transfer or exchange of a Note bearing
the Private Placement Legend pursuant to an effective registration
statement under the Securities Act and in accordance with any
applicable securities laws of any state of the United States, the
Registrar shall authenticate and deliver a Note with an equivalent
principal amount not bearing the Private Placement Legend. If the
Private Placement Legend has been removed from a Note as provided in
this clause (v), the transfer of such Note shall not be subject to the
restrictions on transfer set forth in the Private Placement Legend, and
no other Note issued in exchange for all or any part of such Note shall
bear the Private Placement Legend unless the Company has reasonable
cause to believe that such other Note is a Restricted Security and
instructs the Registrar in writing to cause the Private Placement
Legend to appear thereon.
(vi) None of the Company or the Trustee or the Registrar shall
be liable for any delay by the Depositary in identifying the beneficial
owners of the Notes, and each such Person may conclusively rely on, and
shall be protected in relying on, instructions from the Depositary for
all purposes (including with respect to the registration and delivery,
and the respective principal amounts, of any Notes to be issued).
(vii) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the Paying Agent, the
Registrar or any co-Registrar may deem and treat the Person in whose
name a Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, premium, if any, and
interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-Registrar shall be
affected by notice to the contrary. So long as the Depositary or its
nominee is the Holder of a Global Note, the Depositary or such nominee,
as the case may be, will be considered the sole owner or Holder of the
Notes represented by such Global Note for all purposes hereunder and
under the Notes. Any Holder of a Global Note, and each Person with an
interest in such Global Note, shall, by acceptance of such Global Note
or such interest, agree that transfers of the beneficial interests in
such Global Note may be effected only through a book-entry system
maintained by the Holder of such Global Note (or its agent) and that
ownership of a beneficial interest in such Global Note shall be
required to be reflected in a book entry.
(viii) Any Note issued upon any transfer or exchange pursuant
to this SECTION 2.15 will evidence the same debt and will be entitled
to the same benefits and, unless otherwise provided for in this
Indenture, subject to the same restrictions under this Indenture as the
Note or Notes surrendered upon such transfer or exchange.
24
(ix) The Registrar shall not be required to register the
transfer of or exchange any Note (A) selected for redemption in whole
or in part pursuant to ARTICLE 3, except the unredeemed portion of any
Note being redeemed in part, (B) for a period beginning fifteen (15)
days before the mailing of a notice of redemption of Notes and ending
on the date of such mailing or (C) between a Record Date and the next
succeeding Interest Payment Date.
(b) Transfers and Exchanges of the Global Notes and Beneficial
Interests Therein. (i) Subject to clauses (ii) through (viii) of this SECTION
2.15(B), transfers of the Global Notes shall be limited to transfers in whole,
but not in part, to the Depositary, its successors or their respective nominees.
So long as the Global Notes remain outstanding and are held by or on behalf of
the Depositary, transfers and exchanges of beneficial interests in the Global
Notes shall be made in accordance with the provisions of this SECTION 2.15(B)
and in accordance with the rules and procedures of the Depositary to the extent
applicable (the "Applicable Procedures").
(ii) No restrictions shall apply with respect to the transfer
or registration of transfer of (x) a beneficial interest in the
Restricted Global Note to a transferee that takes delivery in the form
of a beneficial interest in the Restricted Global Note or (y) a
beneficial interest in the Regulation S Global Note to a transferee
that takes delivery in the form of a beneficial interest in the
Regulation S Global Note; provided that any transfer described in this
clause (ii) shall be made in accordance with the Applicable Procedures.
(iii) Any transfer of a beneficial interest in the Restricted
Global Note to a transferee that will take delivery in the form of a
beneficial interest in the Regulation S Global Note prior to the
termination of the Regulation S Distribution Compliance Period shall be
registered, subject to the Applicable Procedures, only in accordance
with this clause (iii). At any time prior to the termination of the
Regulation S Distribution Compliance Period, upon (x) receipt by the
Registrar of (A) instructions given in accordance with the Applicable
Procedures from the Depositary or its nominee on behalf of an owner of
a beneficial interest in the Restricted Global Note to transfer such
beneficial interest to a Person that will take delivery in the form of
a beneficial interest in the Regulation S Global Note, (B) a written
order of the Depositary or its nominee given in accordance with the
Applicable Procedures containing account and other information with
respect to such transfer and (C) a certificate of the transferor of the
beneficial interest in the Restricted Global Note substantially in the
form of Exhibit D and (y) satisfaction of all other applicable
conditions imposed by this Indenture and the Applicable Procedures, the
Registrar shall (1) reflect in the register for the Notes a decrease in
the principal amount of the Restricted Global Note and an increase in
the principal amount of the Regulation S Global Note, each such
adjustment to be equal to the beneficial interest transferred pursuant
to this clause (iii) and (2) instruct the Depositary to make the
corresponding adjustment to its records and debit the account of the
appropriate Agent Members in accordance with the Applicable Procedures.
(iv) Any transfer of a beneficial interest in the Restricted
Global Note to a transferee that will take delivery in the form of a
beneficial interest in the Regulation S Global Note subsequent to the
termination of the Regulation S Distribution Compliance
25
Period shall be registered, subject to the Applicable Procedures, only
in accordance with this clause (iv). At any time subsequent to the
termination of the Regulation S Distribution Compliance Period, upon
(x) receipt by the Registrar of (A) instructions given in accordance
with the Applicable Procedures from the Depositary or its nominee on
behalf of an owner of a beneficial interest in the Restricted Global
Note to transfer such beneficial interest to a Person that will take
delivery in the form of a beneficial interest in the Regulation S
Global Note, (B) a written order of the Depositary or its nominee given
in accordance with the Applicable Procedures containing account and
other information with respect to such transfer and (C) a certificate
of the transferor of the beneficial interest in the Restricted Global
Note substantially in the form of Exhibit D (if transfer is made in
reliance on Regulation S) or Exhibit E (if transfer is made in reliance
on Rule 144) and (y) satisfaction of all other conditions imposed by
the Applicable Procedures, the Registrar shall (1) reflect in the
register for the Notes a decrease in the principal amount of the
Restricted Global Note and an increase in the principal amount of the
Regulation S Global Note, each such adjustment to equal the principal
amount of the beneficial interest transferred pursuant to this clause
(iv), and (2) instruct the Depositary to make the corresponding
adjustment to its records and debit and credit the accounts of the
appropriate Agent Members in accordance with the Applicable Procedures.
(v) Any transfer of a beneficial interest in the Regulation S
Global Note to a transferee that will take delivery in the form of a
beneficial interest in the Restricted Global Note, either prior or
subsequent to the termination of the Regulation S Distribution
Compliance Period, shall be registered, subject to the Applicable
Procedures, only in accordance with this clause (v). At any time upon
(x) receipt by the Registrar of (A) instructions given in accordance
with the Applicable Procedures from the Depositary or its nominee on
behalf of an owner of a beneficial interest in the Regulation S Global
Note to transfer such beneficial interest to a Person that will take
delivery in the form of a beneficial interest in the Restricted Global
Note, (B) a written order of the Depositary or its nominee given in
accordance with the Applicable Procedures containing account and other
information with respect to such transfer and (C) a certificate of the
transferor of the beneficial interest in the Regulation S Global Note
substantially in the form of Exhibit C and (y) satisfaction of all
other conditions imposed by the Applicable Procedures, the Registrar
shall (1) reflect in the register for the Notes a decrease in the
principal amount of the Regulation S Global Note and an increase in the
principal amount of the Restricted Global Note, each such adjustment to
equal the principal amount of the beneficial interest transferred
pursuant to this clause (v), and (2) instruct the Depositary to make
the corresponding adjustment to its records and debit and credit the
accounts of the appropriate Agent Members in accordance with the
Applicable Procedures.
(vi) Any transfer of a beneficial interest in the Restricted
Global Note to a transferee that will take delivery in the form of one
or more Certificated Notes shall be registered, subject to the
Applicable Procedures, only in accordance with this clause (vi). At any
time upon (x) receipt by the Registrar of (A) instructions given in
accordance with the Applicable Procedures from the Depositary or its
nominee on behalf of an owner of a beneficial interest in the
Restricted Global Note to transfer such beneficial interest to a Person
that will take delivery in the form of one or more
26
Certificated Notes, (B) a written order of the Depositary or its
nominee given in accordance with the Applicable Procedures containing
account and other information with respect to such transfer, (C) a
certificate of such Person substantially in the form of Exhibit F and
(D) unless the Restricted Global Note does not bear a Private Placement
Legend, an Opinion of Counsel to the effect that such transfer is in
compliance with the Securities Act, and (y) satisfaction of all other
applicable conditions imposed by this Indenture and the Applicable
Procedures, (1) the Registrar shall (A) reflect in the register for the
Notes a decrease in the principal amount of the Restricted Global Note
in an amount equal to the beneficial interest transferred pursuant to
this clause (vi) and (B) instruct the Depositary to make the
corresponding adjustment to its records and debit the account of the
appropriate Agent Member in accordance with the Applicable Procedures,
and (2) the Company shall execute and the Trustee shall authenticate
and deliver to or on behalf of such Person one or more Certificated
Notes of like tenor and amount and, unless the Restricted Global Note
does not bear a Private Placement Legend, bearing the Private Placement
Legend.
(vii) Any transfer of a beneficial interest in the Regulation
S Global Note to a transferee that will take delivery in the form of
one or more Certificated Notes prior to the termination of the
Regulation S Distribution Compliance Period shall be registered,
subject to the Applicable Procedures, only in accordance with this
clause (vii). At any time prior to the termination of the Regulation S
Distribution Compliance Period, upon (x) receipt by the Registrar of
(A) instructions given in accordance with the Applicable Procedures
from the Depositary or its nominee on behalf of an owner of a
beneficial interest in the Regulation S Global Note to transfer such
beneficial interest to a Person that will take delivery in the form of
one or more Certificated Notes, (B) a written order of the Depositary
or its nominee given in accordance with the Applicable Procedures
containing account and other information with respect to such transfer,
(C) a certificate of such Person substantially in the form of Exhibit F
and (D) an Opinion of Counsel to the effect that such transfer is in
compliance with the Securities Act and (y) satisfaction of all other
conditions imposed by the Applicable Procedures, (1) the Registrar
shall (A) reflect in the register for the Notes a decrease in the
principal amount of the Regulation S Global Note in an amount equal to
the beneficial interest transferred pursuant to this clause (vii) and
(B) instruct the Depositary to make the corresponding adjustment to its
records and debit the account of the appropriate Agent Member in
accordance with the Applicable Procedures, and (2) the Company shall
execute and the Trustee shall authenticate and deliver to or on behalf
of such Person one or more Certificated Notes of like tenor and amount
bearing the Private Placement Legend.
(viii) Notwithstanding any contrary provision contained
herein, Certificated Notes shall be issued in exchange for the
beneficial interests in a Global Note if at any time: (x) the Company
advises the Trustee in writing that the Depositary is unwilling or
unable to continue as depositary for such Global Note or is no longer
eligible to act as such and in each case a successor depositary is not
appointed by the Company within ninety (90) days of receipt by the
Company of notice of such inability; (y) the Company, at its option,
elects to terminate the book-entry system through the Depositary with
respect to such Global Note; or (z) after the occurrence of an Event of
Default, beneficial owners holding interests representing a majority of
the aggregate
27
principal amount of Notes represented by such Global Note advise the
Trustee in writing through the Depositary that the continuation of a
book-entry system through the Depositary is no longer in such
beneficial owners' best interests. Upon the occurrence of any of the
events set forth in clauses (x), (y) and (z) immediately above, the
Trustee, upon receipt of written notice thereof and a list of all
Persons that hold a beneficial interest in such Global Note, shall
notify, through the appropriate Agent Members at the expense of the
Company, all Persons that hold a beneficial interest in such Global
Note, of the issuance of Certificated Notes. Upon surrender by the
Trustee, as custodian for the Depositary, of such Global Note and
receipt from the Depositary of instructions for re-registration, the
Company shall execute and the Trustee, upon the written instructions of
the Company, shall authenticate and deliver Certificated Notes of like
tenor and amount and, unless such Global Note does not bear a Private
Placement Legend, bearing the Private Placement Legend. Certificated
Notes issued in exchange for beneficial interests in such Global Note
pursuant to this clause (viii) shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to
instructions from Agent Members or otherwise, shall instruct the
Trustee.
(c) Transfers and Exchanges of Certificated Notes. (i) Any transfer of
a Certificated Note bearing the Private Placement Legend to a transferee that
takes delivery in the form of one or more Certificated Notes shall be registered
only in accordance with this clause (i). Upon (x) surrender of any Certificated
Note bearing the Private Placement Legend at the office of the Registrar,
together with (A) an executed instrument of assignment of such Certificated Note
substantially in the form of assignment attached to such Certificated Note, (B)
a certificate of the transferee of such Certificated Note substantially in the
form of Exhibit F and (C) an Opinion of Counsel to the effect that such transfer
is in compliance with the Securities Act and (y) satisfaction of all other
applicable conditions imposed by this Indenture, (1) the Trustee shall register
such transfer and (2) the Company shall execute and the Trustee shall
authenticate and deliver in the name of the transferee one or more Certificated
Notes of any authorized denomination in the same aggregate principal amount and
of the same maturity as the transferred Certificated Note, each such new
Certificated Note bearing the Private Placement Legend; provided, however, that
Certificated Notes so delivered shall not be required to bear the Private
Placement Legend if there is provided to the Company evidence reasonably
satisfactory to the Company (which may, at the Company's request, include an
Opinion of Counsel) that neither the Private Placement Legend nor the
restrictions on transfer set forth therein are required to ensure compliance
with the Securities Act.
(ii) Any transfer of a Certificated Note not bearing the
Private Placement Legend to a transferee that takes delivery in the
form of one or more Certificated Notes shall be registered only in
accordance with this clause (ii). Upon (x) surrender of any
Certificated Note not bearing the Private Placement Legend at the
office of the Registrar, together with an executed instrument of
assignment of such Certificated Note substantially in the form of
assignment attached to such Certificated Note, and (y) satisfaction of
all other applicable conditions imposed by this Indenture, (A) the
Trustee shall register such transfer and (B) the Company shall execute
and the Trustee shall authenticate and deliver in the name of the
transferee one or more Certificated Notes of any authorized
denomination in the same aggregate principal amount and of the same
maturity as the transferred Certificated Note. Each such new
Certificated Note may at the request of the transferee, but shall not
be required to, bear the Private Placement Legend.
28
(iii) Any transfer of a Certificated Note bearing the Private
Placement Legend to a transferee that takes delivery in the form of a
beneficial interest in a Global Note shall be registered only in
accordance with this clause (iii). Upon (x) surrender of any
Certificated Note bearing the Private Placement Legend at the office of
the Registrar, together with (A) an executed instrument of assignment
of such Certificated Note substantially in the form of assignment
attached to such Certificated Note, (B) written instructions from the
transferor that such Certificated Note shall be registered in the name
of the Depositary or its nominee and (C) a certificate of the
transferor of such Certificated Note substantially in the form of
Exhibit D (if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note) or Exhibit C (if
the transferee will take delivery in the form of a beneficial interest
in the Restricted Global Note), and (y) satisfaction of all other
applicable conditions imposed by this Indenture and the Applicable
Procedures, the Registrar shall (1) register such transfer and cancel
such Certificated Note, (2) reflect in the register for the Notes an
increase in the appropriate Global Note in an amount equal to the
Certificated Note transferred pursuant to this clause (iii) and (3)
instruct the Depositary to make the corresponding adjustment to its
records and credit the account of the appropriate Agent Member in
accordance with the Applicable Procedures.
(iv) Any transfer of a Certificated Note not bearing the
Private Placement Legend to a transferee that takes delivery in the
form of a beneficial interest in a Global Note shall be registered only
in accordance with this clause (iv). Upon (x) surrender of a
Certificated Note not bearing the Private Placement Legend at the
office of the Registrar, together with (A) an executed instrument of
assignment of such Certificated Note substantially in the form of
assignment attached to such Certificated Note and (B) written
instructions from the transferor that such Certificated Note shall be
registered in the name of the Depositary or its nominee, and (y)
satisfaction of all other applicable conditions imposed by this
Indenture and the Applicable Procedures, the Registrar shall (1)
register such transfer and cancel such Certificated Note, (2) reflect
in the register for the Notes an increase in the Global Note in an
amount equal to the Certificated Note transferred pursuant to this
clause (iv) and (3) instruct the Depositary to make the corresponding
adjustment to its records and credit the account of the appropriate
Agent Member in accordance with the Applicable Procedures.
(v) Any exchange of a Certificated Note for one or more
Certificated Notes in different authorized denominations shall be
registered only in accordance with this clause (v). Upon (x) surrender
of a Certificated Note at the office of the Registrar, together with a
written request to exchange such Certificated Note for one or more
Certificated Notes in different authorized denominations, and (y)
satisfaction of all other applicable conditions imposed by this
Indenture, (A) the Registrar shall register such exchange and (B) the
Company shall execute and the Trustee shall authenticate and deliver in
the name of the registered owner one or more Certificated Notes in any
authorized denomination with the same aggregate principal amount and
maturity date.
29
(vi) Any exchange of a Certificated Note for a beneficial
interest in a Global Note shall be registered only in accordance with
this clause (vi). Upon (x) surrender of a Certificated Note at the
office of the Registrar, together with (A) a written request to
exchange such Certificated Note for a beneficial interest in a Global
Note, (B) written instructions from the registered owner that such
Certificated Note shall be registered in the name of the Depositary or
its nominee and (C) a certificate of the registered owner of such
Certificated Note substantially in the form of Exhibit D (if the
Certificated Note is being exchanged for a beneficial interest in the
Regulation S Global Note) or Exhibit C (if the Certificated Note is
being exchanged for a beneficial interest in the Restricted Global
Note) and (y) satisfaction of all other applicable conditions imposed
by this Indenture and the Applicable Procedures, the Registrar shall
(1) register such exchange and cancel such Certificated Note, (2)
reflect in the register for the Notes an increase in the Restricted
Global Note in an amount equal to the Certificated Note exchanged
pursuant to this clause (vi) and (3) instruct the Depositary to make
the corresponding adjustment to its records and credit the account of
the appropriate Agent Member in accordance with the Applicable
Procedures.
Section 2.16 Restrictive Legends. Each Note that constitutes a
Restricted Security shall bear the following legend (the "Private Placement
Legend") on the face thereof until May 22, 2004, unless otherwise agreed to by
the Company and the Holder thereof:
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM OR IN A
TRANSACTION NOT SUBJECT THERETO. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)(a) TO A PERSON THE SELLER 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 RESALE, PLEDGE OR
TRANSFER IS BEING MADE IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, PROVIDED THAT IN THE CASE OF A TRANSFER,
PLEDGE OR SALE PURSUANT TO THIS CLAUSE (d) SUCH TRANSFER IS SUBJECT TO THE
RECEIPT BY THE REGISTRAR (AND THE COMPANY, IF IT SO REQUESTS) OF A
30
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (ii) TO THE COMPANY OR
ITS AFFILIATES OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND THE INDENTURE GOVERNING THE NOTES AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Each Global Note shall also bear the following legend:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED
TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.15
OF THE INDENTURE.
ARTICLE 3
REDEMPTION
----------
Section 3.01 Notices to Trustee. If the Company elects to redeem any of
the Notes pursuant to paragraph 5 of the Notes, at least 60 days prior to the
Redemption Date or during such other period as the Trustee may agree to, the
Company shall notify the Trustee in writing of the Redemption Date, the
principal amount of Notes to be redeemed and the Redemption Price, and deliver
to the Trustee an Officers' Certificate stating that such redemption will comply
with the conditions contained herein and in the Notes, as appropriate.
Section 3.02 Selection of Notes To Be Redeemed. (a) In the event that
less than all of the Notes are to be redeemed at any time, selection of the
Notes to be redeemed shall be made by the Trustee on a pro rata basis, by lot or
by such method as the Trustee shall deem fair and equitable; provided, however,
that no Notes of a principal amount of $1,000 or less shall be redeemed in part.
The Trustee shall make the selection from the outstanding Notes not previously
called for redemption. The Trustee shall promptly notify the Company in writing
of
31
the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount of the Notes to be redeemed. In the
event of a partial redemption by lot, the Trustee shall select the particular
Notes to be redeemed not less than 30 nor more than 60 days prior to the
relevant Redemption Date from the Outstanding Notes not previously called for
redemption. The Company may redeem Notes in denominations of $1,000 only in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple of $1,000) of the principal of Notes that have denominations
larger than $1,000. A new Note in a principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon delivery
of the original Note to the Paying Agent and cancellation of the original Note.
On and after the Redemption Date, interest will cease to accrue on Notes or
portions thereof called for redemption as long as the Company has made a deposit
with the Paying Agent in U.S. legal tender in satisfaction of the applicable
Redemption Price pursuant to this Indenture.
(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of that Note which has been or is to be redeemed.
Section 3.03 Notice of Redemption. Notice of redemption shall be mailed
by first class mail at least 30 but not more than 60 calendar days before the
Redemption Date to each Holder of Notes to be redeemed at the registered address
of such Holder. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. If the Company elects to have the Trustee give
notice of redemption, the Trustee shall give notice in the name of the Company
and at the Company's expense; provided, however, that the Company shall furnish
the Trustee all information required to be contained in the notice.
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(3) whether or not the Company is redeeming all outstanding
Notes and if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after
the Redemption Date, upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion thereof will be
issued;
(4) the name, address and telephone number of the Paying
Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to collect the
Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the Redemption Price plus accrued
interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
32
(7) the subparagraph of the Notes pursuant to which the Notes
called for redemption are being redeemed;
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption; and
(9) the CUSIP or ISIN number, if any, listed in the notice or
printed on the Notes, and that no representation is made as to the
accuracy or correctness of such CUSIP or ISIN number.
Section 3.04 Effect of Notice of Redemption. Once the notice of
redemption described in SECTION 3.03 hereof is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption
Price, including any premium, plus accrued interest to the Redemption Date, if
any. Upon surrender to the Paying Agent, such Notes shall be paid at the
Redemption Price, including any premium, plus accrued interest to the Redemption
Date, if any; provided that if the Redemption Date is after a Record Date and on
or prior to the related Interest Payment Date, the accrued interest shall be
payable to the Holder of the redeemed Notes registered on the relevant Record
Date.
Section 3.05 Deposit of Redemption Price. On or prior to 10:00 a.m.,
New York City time, on the relevant Redemption Date, the Company shall have
deposited with the Paying Agent in immediately available funds U.S. legal tender
sufficient to pay the Redemption Price of and accrued interest, if any, on all
Notes to be redeemed on that date. The Paying Agent shall return to the Company
any money deposited with the Paying Agent by the Company in excess of the amount
necessary to pay the Redemption Price of and accrued interest, if any, on all
Notes to be redeemed.
On and after any Redemption Date, if U.S. legal tender sufficient to
pay the Redemption Price of and accrued interest, if any, on Notes called for
redemption shall have been made available in accordance with the preceding
paragraph, the Notes called for redemption will cease to accrue interest and the
only right of the Holders of such Notes will be to receive payment of the
Redemption Price of and, subject to the proviso in SECTION 3.04 hereof, accrued
and unpaid interest on such Notes to the Redemption Date, if any. If any Note
called for redemption shall not be so paid, interest will continue to accrue and
be paid, from the Redemption Date until such redemption payment is made, on the
unpaid principal of the Note and any interest not paid on such unpaid principal,
in each case, at the rate and in the manner provided for in SECTION 2.11 hereof.
Section 3.06 Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate,
at the expense of the Company, for a Holder a new Note equal in principal amount
to the unredeemed portion of the Note surrendered; provided that each new Note
will be in a principal amount of $1,000 or an integral multiple of $1,000.
33
ARTICLE 4
COVENANTS
---------
Section 4.01 Payment of Notes. The Company shall pay the principal of
and interest (including all Additional Interest as provided in the Registration
Rights Agreement) on the Notes on the dates and in the manner provided in the
Notes and this Indenture. An installment of principal or interest shall be
considered paid on the date it is due if the Trustee or Paying Agent holds, for
the benefit of the Holders, on that date money designated for and sufficient to
pay such installment in full and is not prohibited from paying such money to the
Holders pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal and interest on
overdue interest, to the extent lawful as provided for in SECTION 2.11 hereof.
Section 4.02 Reports. Whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the Company
shall file with the Commission, to the extent such filings are accepted by the
Commission, and shall furnish (within 15 days after such filing) to the Trustee
and to the Holders all quarterly and annual reports and other information,
documents and reports that would be required to be filed with the Commission
pursuant to Section 13 of the Exchange Act if the Company were required to file
under such section. In addition, the Company shall make such information
available to prospective purchasers of the Notes, securities analysts and
broker-dealers who request it in writing. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
Section 4.03 Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead (as a defense or otherwise) or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of, premium, if any, and/or interest
on the Notes as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture; and the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 4.04 Compliance Certificate; Notice of Default; Tax
Information. (a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, commencing with the fiscal year
ending December 31, 2002, an Officers' Certificate (one of the signers of which
shall be the principal executive officer, principal financial officer or
34
principal accounting officer of the Company) stating that to the best of his or
her knowledge no Default or Event of Default has occurred, listing all
Restricted Payments for such year, and if a Default or Event of Default shall
have occurred, describing all of 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. The Officers' Certificate shall also notify the
Trustee if the Company elects to change the manner in which it fixes its fiscal
year end.
(b) The annual financial statements delivered pursuant to SECTION 4.02
shall be accompanied by a written report addressed to the Trustee of the
Company's independent accountants (who shall be a firm of established national
reputation) that in conducting their audit of such financial statements nothing
has come to their attention that would lead them to believe that a Default or
Event of Default has occurred under this Indenture insofar as they relate to
accounting matters 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) If (i) any Default or Event of Default has occurred and is
continuing or (ii) any Holder seeks to exercise any remedy hereunder with
respect to a claimed default under this Indenture or the Holder's Notes, the
Company shall deliver to the Trustee, at its address set forth in SECTION 10.02
hereof, by registered or certified mail or by telegram or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such Default or Event of Default, notice or other action, the status
thereof and what action the Company is taking or proposes to take, which
Officers' Certificate shall be so delivered within five (5) Business Days of its
becoming aware of such occurrence.
Section 4.05 Payment of Taxes and Other Claims. The Company shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Subsidiaries or properties of it or any
of its Subsidiaries and (ii) all lawful claims for labor, materials and supplies
that, if unpaid, might by law become a Lien upon the property of it or any of
its Subsidiaries; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted for which adequate reserves, to the extent required under GAAP, have
been taken.
Section 4.06 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 limited liability company or other existence of each Subsidiary,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of each Subsidiary and the material rights (charter
and statutory), licenses and franchises of the Company and its Subsidiaries
except where the failure to preserve and keep in full force and effect any such
rights, licenses and franchises shall not have a material adverse effect on the
financial condition, business, operations or prospects of the Company and its
Subsidiaries taken as a whole; and provided that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
limited liability company, partnership or other existence of any of the
Subsidiaries, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole.
35
Section 4.07 Maintenance of Office or Agency. The Company shall
maintain an office or agency in the Borough of Manhattan, The City of New York,
where Notes may be surrendered for registration of transfer or exchange or for
presentation for payment 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 address of the Trustee as set forth in SECTION
10.02 hereof.
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 such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office of the Company in the Borough of Manhattan, The City
of New York.
Section 4.08 Compliance with Laws. The Company shall comply, and shall
cause each of its Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America and all
other sovereign nations, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and
its Subsidiaries taken as a whole.
Section 4.09 Maintenance of Properties and Insurance. (a) The Company
shall cause all material properties owned by or leased by it or any of its
Subsidiaries used or useful to the conduct of the Company's business or the
business of any of its Subsidiaries to be maintained and kept in normal
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in its judgment may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
SECTION 4.09 shall prevent the Company or any of its Subsidiaries from
discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors of the Company or of the Board of Directors of the
Subsidiary of the Company concerned, desirable in the conduct of the business of
the Company or any Subsidiary of the Company.
(b) The Company shall maintain, and shall cause the Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as, in the reasonable judgment of the Company, may be
necessary.
36
Section 4.10 Limitation on Restricted Payments. Prior to the occurrence
of the Fall-Away Event, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment if at the
time of such Restricted Payment: (i) a Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof; (ii) after
giving effect to the proposed Restricted Payment, the amount of such Restricted
Payment, when added to the aggregate amount of all Restricted Payments made
after September 25, 2000, exceeds the sum of: (a) 50% of the Company's
Consolidated Net Income accrued during the period (taken as a single period)
commencing on July 1, 1997 to and including the fiscal quarter ended immediately
prior to the date of such Restricted Payment (or, if such aggregate Consolidated
Net Income shall be a deficit, minus 100% of such aggregate deficit); (b) the
net cash proceeds from the issuance and sale of the Company's Capital Stock
(other than to a Subsidiary of the Company) that is not Disqualified Stock
during the period (taken as a single period) commencing with the Issue Date; and
(c) $50,000,000; or (iii) the Company would not be able to incur an additional
$1.00 of Indebtedness pursuant to the EBITDA Coverage Ratio test in SECTION
4.11(A) hereof.
Notwithstanding the foregoing, the Company may: (w) pay any dividend
within 60 days after the date of declaration thereof if the payment thereof
would have complied with the limitations of this SECTION 4.10 on the date of
declaration; (x) retire shares of the Company's Capital Stock or the Company's
or a Subsidiary of the Company's Indebtedness out of the proceeds of a
substantially concurrent sale (other than to a Subsidiary of the Company) of
shares of the Company's Capital Stock (other than Disqualified Stock); (y) make
Investments in Joint Ventures which, when added to the aggregate amount of all
such other Investments made after September 25, 2000 pursuant to this clause (y)
(or such other Investments as would have been made pursuant to this clause (y)
had such clause been in effect) do not exceed 5% of Consolidated Tangible Assets
at such time (with each such Investment being valued as of the date made and
without regard to subsequent changes in value); and (z) make Investments which,
when added to the aggregate amount of all such other Investments made after
September 25, 2000 pursuant to this clause (z) (or such other Investments as
would have been made pursuant to this clause (z) had such clause been in effect)
do not exceed 2.5% of Consolidated Tangible Assets at such time (with each such
Investment being valued as of the date made and without regard to subsequent
changes in value); provided, however, that each Restricted Payment described in
clause (w) or (x) above shall be taken into account for purposes of computing
the aggregate amount of all Restricted Payments pursuant to clause (ii) of the
immediately preceding paragraph.
Section 4.11 Limitation on Additional Indebtedness and Subsidiary
Preferred Stock. (a) After the Issue Date and prior to the occurrence of the
Fall-Away Event, (i) the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee, extend the Stated Maturity of, or otherwise become liable with
respect to (collectively, "incur"), any Indebtedness (including, without
limitation, Acquired Indebtedness) and (ii) the Company shall not permit any of
its Subsidiaries to issue (except to the Company or any of its Wholly Owned
Subsidiaries) or create any Preferred Stock or permit any Person (other than the
Company or a Wholly Owned Subsidiary) to own or hold any interest in
37
any Preferred Stock of any such Subsidiary; provided, however, that the Company
may incur Indebtedness and the Company may permit its Subsidiaries to issue or
create Preferred Stock if, after giving effect thereto, the Company's EBITDA
Coverage Ratio on the date thereof would be at least 2.5 to 1, determined on a
pro forma basis as if the incurrence of such additional Indebtedness or the
issuance of such Preferred Stock (declared to have an aggregate principal amount
equal to the aggregate liquidation value of such Preferred Stock), as the case
may be, and the application of the net proceeds therefrom, had occurred at the
beginning of the four-quarter period used to calculate the Company's EBITDA
Coverage Ratio.
(b) Notwithstanding the foregoing, and irrespective of the EBITDA
Coverage Ratio, in addition to Existing Indebtedness: (i) the Company may incur
Indebtedness pursuant to the Notes issued on the Issue Date and the Exchange
Notes issued in exchange for such Notes; (ii) the Company and its Subsidiaries
may incur Refinancing Indebtedness in exchange for, or the net proceeds of which
are applied to refund, refinance or extend, Existing Indebtedness or other
Indebtedness that was permitted by this Indenture to be incurred under this
SECTION 4.11 except for Indebtedness incurred under clause (iii) or (iv) of this
paragraph (b); (iii) the Company may incur any Indebtedness to any Subsidiary or
any Subsidiary may incur any Indebtedness to the Company or to any Subsidiary;
(iv) the Company and its Subsidiaries may incur any Indebtedness evidenced by
letters of credit which are used in the ordinary course of business of the
Company and its Subsidiaries to secure workers' compensation and other insurance
coverages; (v) the Company and its Subsidiaries may incur Capitalized Lease
Obligations and Attributable Indebtedness, in each case excluding Existing
Indebtedness but including all Refinancing Indebtedness incurred in exchange
for, or the net proceeds of which are applied to refund, refinance or extend,
any Indebtedness incurred pursuant to this clause (v), in an aggregate principal
amount at any one time outstanding not to exceed 10% of Consolidated Tangible
Assets at such time; and (vi) the Subsidiaries of the Company may incur
Indebtedness, including all Refinancing Indebtedness incurred in exchange for,
or the net proceeds of which are applied to refund, refinance or extend, any
Indebtedness incurred pursuant to this clause (vi), in an aggregate principal
amount at any time outstanding not to exceed $250,000,000, in addition to
Existing Indebtedness and other Indebtedness permitted to be incurred by
Subsidiaries of the Company pursuant to the foregoing clauses (ii) - (v).
(c) Notwithstanding the foregoing, the Company may permit any
Subsidiary which is a partnership formed to operate a single healthcare facility
to issue or create Preferred Stock; provided that the aggregate amount of all
such Preferred Stock outstanding after giving effect to such issuance or
creation shall not exceed 1% of Consolidated Tangible Assets as of the date of
such issuance or creation.
(d) Any limitations on the rights of the Company or its Subsidiaries
set forth in paragraph (b) or (c) of this SECTION 4.11 shall be of no force and
effect after the occurrence of the Fall-Away Event.
Section 4.12 Limitation on Asset Sales. (a) Prior to the occurrence of
the Fall-Away Event, the Company shall not, and shall not permit any of its
Subsidiaries to, consummate any Asset Sale unless (i) the Company or such
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the Fair Market Value of the assets included in such Asset Sale, (ii)
immediately before and immediately after giving effect to such Asset Sale, no
Default or
38
Event of Default shall have occurred and be continuing and (iii) at least 75% of
the consideration received by the Company or such Subsidiary therefor is in the
form of cash paid at the closing thereof, provided, however, that this clause
(iii) shall not apply if, after giving effect to such Asset Sale, the aggregate
principal amount of all notes or similar debt obligations and Fair Market Value
of all equity securities received by the Company from all Asset Sales since
September 25, 2000 (other than such notes or similar debt obligations and such
equity securities converted into or otherwise disposed of for cash and applied
in accordance with the second succeeding sentence) would not exceed 2.5% of
Consolidated Tangible Assets at such time. The amount (without duplication) of
any (x) Indebtedness (other than Subordinated Indebtedness) of the Company or
such Subsidiary that is expressly assumed by the transferee in such Asset Sale
and with respect to which the Company or such Subsidiary, as the case may be, is
unconditionally released by the holder of such Indebtedness and (y) any notes,
securities or similar obligations or items of property received from such
transferee that are immediately converted, sold or exchanged by the Company or
such Subsidiary for cash (to the extent of the cash actually so received), shall
be deemed to be cash for purposes of this SECTION 4.12. If at any time any
non-cash consideration received by the Company or such Subsidiary, as the case
may be, in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then the date of such conversion or disposition shall
be deemed to constitute the date of an Asset Sale hereunder and the Net Proceeds
thereof shall be applied in accordance with this SECTION 4.12. A transfer of
assets by the Company to a Wholly Owned Subsidiary or by a Wholly Owned
Subsidiary to the Company or to another Wholly Owned Subsidiary will not be
deemed to be an Asset Sale, and a transfer of assets that constitutes a
Restricted Payment and that is permitted under SECTION 4.10 hereof will not be
deemed to be an Asset Sale.
(b) Prior to the occurrence of the Fall-Away Event, if the Company or
any Subsidiary engages in an Asset Sale, the Company or such Subsidiary shall,
no later than 360 days after such Asset Sale, (i) apply all or any of the Net
Proceeds therefrom to repay Indebtedness that ranks pari passu with the Notes
and is secured by the assets disposed of in the Asset Sale or to repay Bank Debt
in accordance with the applicable provisions thereof, (ii) invest all or any
part of the Net Proceeds therefrom in the lines of business of the Company or
any of its Subsidiaries immediately prior to such investment or (iii) any
combination of clauses (i) and (ii) above. The amount of such Net Proceeds not
applied or invested as provided in this paragraph (b) will constitute "Excess
Proceeds."
(c) Prior to the occurrence of the Fall-Away Event, when the aggregate
amount of Excess Proceeds equals or exceeds $5,000,000, the Company shall be
required to make an offer to purchase (an "Asset Sale Offer") from all Holders,
an aggregate principal amount of Notes equal to the amount of such Excess
Proceeds as follows:
(i) The Company shall make an Asset Sale Offer to all Holders
in accordance with the procedures set forth in this SECTION 4.12 to
purchase the maximum principal amount (expressed as a multiple of
$1,000) of Notes that may be purchased out of the amount (the "Asset
Sale Payment Amount") of such Excess Proceeds.
(ii) The offer price for the Notes shall be payable in cash in
an amount equal to 100% of the principal amount of the Notes tendered
pursuant to such Asset Sale
39
Offer, plus accrued and unpaid interest and Additional Interest, if
any, to the date such Asset Sale Offer is consummated (the "Asset Sale
Purchase Price"), in accordance with the procedures set forth in this
SECTION 4.12. To the extent that the aggregate Asset Sale Purchase
Price of Notes tendered pursuant to an Asset Sale Offer is less than
the Asset Sale Payment Amount relating thereto (such shortfall
constituting a "Net Proceeds Deficiency"), the Company may use such Net
Proceeds Deficiency, or a portion thereof, for general corporate
purposes.
(iii) If the aggregate Asset Sale Purchase Price of Notes
validly tendered and not withdrawn by holders thereof exceeds the Asset
Sale Payment Amount, Notes to be purchased shall be selected on a pro
rata basis.
(iv) Upon completion of such Asset Sale Offer in accordance
with the foregoing provisions, the amount of Excess Proceeds with
respect to which such Asset Sale Offer was made shall be deemed to be
zero.
In the event that any other Indebtedness of the Company which ranks
pari passu with the Notes ("Other Debt") requires an offer to purchase to be
made to repurchase such Other Debt upon the consummation of an Asset Sale, the
Company may apply the Excess Proceeds to both purchase such Other Debt and to
make an Asset Sale Offer, provided, that the purchase price of such Other Debt
does not exceed 100% of the aggregate principal amount or accreted value thereof
plus interest thereon. With respect to any Excess Proceeds, the Company shall
make the Asset Sale Offer in respect thereof at the same time as the analogous
offer to purchase is made pursuant to any Other Debt and the purchase date in
respect thereof shall be the same as the purchase date in respect thereof
pursuant to any Other Debt.
With respect to any Asset Sale Offer effected pursuant to this SECTION
4.12, to the extent the aggregate principal amount of Notes and Other Debt, if
any, tendered pursuant to such Asset Sale Offer and the concurrent offer to
purchase with respect to such Other Debt exceeds the Excess Proceeds, such Notes
and Other Debt, if any, shall be purchased pro rata based on the aggregate
principal amount of such Notes and such Other Debt tendered by each holder
thereof.
(d) If the Company is required to make an Asset Sale Offer, the Company
shall, within 30 days following the date specified in clause (c) above, notify
the Trustee thereof and give written notice of such Asset Sale Offer to each
Holder by first-class mail, postage prepaid, at the address of such Holder
appearing in the register maintained by the Registrar, stating:
(1) that an Asset Sale Offer is being made pursuant to this
SECTION 4.12;
(2) that such Holders have the right to require the Company to
apply the Excess Proceeds to repurchase the Notes at a purchase price
in cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the purchase date which shall be no earlier
than 30 days and not later than 60 days from the date such notice is
mailed (the "Excess Proceeds Payment Date");
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
40
(4) that any Notes accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Excess Proceeds
Payment Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to the Asset Sale Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Excess Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their acceptance
of the Asset Sale Offer if the Paying Agent receives, not later than
the close of business on the third Business Day preceding the Excess
Proceeds Payment Date, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes
delivered for purchase and a statement that such Holder is withdrawing
his or her election to have such Notes purchased;
(7) that if the aggregate principal amount of Notes
surrendered by Holders exceeds the amount of Excess Proceeds, the
Company shall select the Notes to be purchased on a pro rata basis so
that the aggregate amount of Notes so purchased equals the amount of
Excess Proceeds (with such adjustments as may be deemed appropriate by
the Company so that only Notes in denominations of $1,000 or integral
multiples thereof shall be purchased);
(8) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered; provided that each Note purchased and
each such new Note issued shall be in an original principal amount of
$1,000 or an integral multiple thereof;
(9) the calculations used in determining the amount of Excess
Proceeds to be applied to the purchase of such Notes;
(10) any other procedures that a Holder must follow to accept
an Asset Sale Offer or effect withdrawal of such acceptance; and
(11) the name and address of the Paying Agent.
On the Excess Proceeds Payment Date, the Company shall, to the extent
lawful, (1) accept for payment, on a pro rata basis to the extent necessary,
Notes or portions thereof tendered pursuant to the Asset Sale Offer, (2) deposit
with the Paying Agent US legal tender sufficient to pay the purchase price plus
accrued and unpaid interest, if any, on the Notes to be purchased or portions
thereof, (3) deliver or cause to be delivered to the Trustee Notes so accepted
together with an Officers' Certificate stating that such Notes or portions
thereof were accepted for payment by the Company in accordance with the terms of
this SECTION 4.12. The Paying Agent shall promptly mail to each Holder of Notes
so accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and make available for delivery to such Holder, a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered; provided that each
Note purchased and each such new Note issued shall be in an original principal
amount of $1,000 or an integral multiple thereof.
41
(e) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with this SECTION
4.12, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
SECTION 4.12 by virtue thereof.
Section 4.13 Limitation on Transactions with Affiliates. Prior to the
occurrence of the Fall-Away Event, neither the Company nor any of its
Subsidiaries shall, directly or indirectly, in one transaction or a series of
transactions, make any loan, advance, guarantee or capital contribution to, or
for the benefit of, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, any Affiliate of the Company or any
of its Subsidiaries or any Person (or any Affiliate of such Person) holding 10%
or more of the Common Equity of the Company or any of its Subsidiaries, other
than transactions in the ordinary course between the Company and its
Subsidiaries or among Subsidiaries of the Company (an "Affiliate Transaction"),
unless: (i) the terms of such Affiliate Transaction are fair and reasonable to
the Company or such Subsidiary, as the case may be, and are at least as
favorable as the terms which could be obtained by the Company or such
Subsidiary, as the case may be, in a comparable transaction made on an
arm's-length basis between unaffiliated parties; (ii) with respect to any such
Affiliate Transaction involving aggregate payments in excess of $5,000,000, the
Company delivers an Officers' Certificate to the Trustee certifying that such
Affiliate Transaction complies with clause (i) above and a Secretary's
Certificate which sets forth and authenticates a resolution that has been
adopted by a vote of a majority of the disinterested members of the Board of
Directors approving such Affiliate Transaction; and (iii) with respect to any
such Affiliate Transaction involving aggregate payments in excess of
$25,000,000, the Company delivers to the Trustee the certificates specified in
clause (ii) above and an opinion of an independent investment banking firm of
national standing in the United States, stating that such Affiliate Transaction
is fair from a financial point of view to the Company or such Subsidiary, as the
case may be; provided, however, that the foregoing clauses (ii) and (iii) shall
not apply to transactions between the Company or any of its Subsidiaries and
MedCenterDirect, Inc. or Source Medical Solutions, Inc.
Section 4.14 Limitation on Liens Prior to the Fall-Away Event. Prior to
the occurrence of the Fall-Away Event, the Company will not create or suffer to
exist any Lien (other than Permitted Liens) on any of its assets, unless
contemporaneously therewith:
(i) in the case of any Lien securing an obligation that ranks
pari passu with the Notes, effective provision is made to secure the
Notes at least equally and ratably with or prior to such obligation
with a Lien on the same collateral; and
(ii) in the case of any Lien securing an obligation that is
subordinated in right of payment to the Notes, effective provision is
made to secure the Notes with a Lien on the same collateral that is
prior to the Lien securing such subordinated obligation.
42
Notwithstanding the above, the Company may, without securing the Notes,
create or assume any Indebtedness which is secured by a Lien which would
otherwise be subject to the foregoing restrictions, provided that after giving
effect thereto, the Exempted Debt then outstanding does not exceed 10% of the
total Consolidated Tangible Assets at such time.
Section 4.15 Purchase of Notes upon a Change of Control Prior to the
Fall-Away Event. (a) Upon the occurrence of a Change of Control and if the
Fall-Away Event has not occurred prior to the expiration of the 30-day period
immediately after the occurrence of such Change of Control, the Company shall be
obligated to make an offer to purchase (the "Change of Control Offer") the
outstanding Notes of each Holder in whole or in part in integral multiples of
$1,000, at a purchase price (the "Change of Control Purchase Price") in cash in
an amount equal to 101% of the principal amount thereof, plus accrued interest,
if any, to the date of purchase (the "Change of Control Purchase Date"),
pursuant to the procedures set forth below.
(b) Within 30 days following any Change of Control, and if the
Fall-Away Event has not occurred within the 30-day period immediately after the
occurrence of such Change of Control, the Company shall notify the Trustee
thereof and give written notice of such Change of Control to each Holder by
first-class mail, postage prepaid, at the address of such Holder appearing in
the register maintained by the Registrar, stating, among other things:
(1) that the Change of Control Offer is being made pursuant to
this SECTION 4.15;
(2) that such Holders have the right to require the Company to
repurchase such Notes at the Change of Control Purchase Price on the
Change of Control Purchase Date which shall be no earlier than 30 days
and not later than 60 days from the date such notice is mailed;
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that, unless the Company defaults in its payment of the
Change of Control Purchase Price, any Note accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Change of Control Purchase Date;
(6) that Holders will be entitled to withdraw their acceptance
of the Change of Control Offer if the Paying Agent receives, not later
than the close of business on the third Business Day preceding the
Change of Control Purchase Date, a telegram, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Notes delivered for purchase and a statement that such Holder is
withdrawing his or her election to have such Notes purchased;
43
(7) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(8) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (2) deposit with the Paying Agent U.S. legal tender
sufficient to pay the purchase price of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company pursuant to this
SECTION 4.15. The Paying Agent shall promptly mail to each Holder of Notes so
accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and mail to such Holder, a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; provided that each such new Note shall be
issued in an original principal amount of $1,000 or an integral multiple
thereof.
(c) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with this SECTION
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
SECTION 4.15 by virtue thereof.
Section 4.16 Limitation on Restrictions on Distributions from
Subsidiaries. Prior to the occurrence of the Fall-Away Event, the Company shall
not, and shall not permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
(other than encumbrances or restrictions imposed by law or by judicial or
regulatory action or by provisions in leases or other agreements that restrict
the assignability thereof) on the ability of any Subsidiary of the Company to
(i) pay dividends or make any other distributions on its Capital Stock or any
other interest or participation in, or measured by, its profits, owned by the
Company or any of its other Subsidiaries, or pay interest on or principal of any
Indebtedness owed to the Company or any of its other Subsidiaries, (ii) make
loans or advances to the Company or any of its other Subsidiaries or (iii)
transfer any of its properties or assets to the Company or any of its other
Subsidiaries, in each case except for encumbrances or restrictions existing
under or by reason of (a) applicable law, (b) the Credit Agreements, (c)
Existing Indebtedness, (d) any restrictions under any agreement evidencing any
Acquired Indebtedness that was permitted to be incurred pursuant to this
Indenture and which was not incurred in anticipation or contemplation of the
related acquisition, provided that such restrictions and encumbrances only apply
to assets that were subject to such restrictions and encumbrances prior to the
acquisition of such assets by the Company or its Subsidiaries, (e) restrictions
or encumbrances replacing those permitted by clause (b), (c) or (d) above which,
taken as a whole, are not materially more restrictive, (f) this Indenture, (g)
any restrictions and encumbrances arising in connection with Refinancing
Indebtedness; provided, however, that any restrictions or encumbrances of the
type described in this clause (g) that arise under such Refinancing Indebtedness
are not, taken as a whole, materially more restrictive than those under
44
the agreement creating or evidencing the Indebtedness being refunded or
refinanced, (h) any restrictions with respect to a Subsidiary of the Company
imposed pursuant to an agreement that has been entered into for the sale or
other disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary, (i) any agreement restricting the sale or other disposition of
property securing Indebtedness if such agreement does not expressly restrict the
ability of a Subsidiary of the Company to pay dividends or make loans or
advances and (j) customary restrictions in purchase money debt or leases
relating to the property covered thereby.
Section 4.17 Limitations on Layering Indebtedness. Prior to the
occurrence of the Fall-Away Event, the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, incur any Indebtedness that
purports to be by its terms subordinated to any other Indebtedness of the
Company or such Subsidiary, as the case may be, unless such Indebtedness is also
expressly subordinated to the Notes to the same extent and in the same manner as
such Indebtedness is subordinated to such other Indebtedness.
Section 4.18 Limitations on Liens After the Fall-Away Event. After the
occurrence of the Fall-Away Event, the Company shall not, nor shall it permit
any Subsidiary to, directly or indirectly, create or incur any Lien of any kind
securing Indebtedness for money borrowed upon any assets, whether now owned or
hereafter acquired, of the Company or any such Subsidiary without equally and
ratably securing the Notes by a Lien ranking ratably with and equally to such
secured Indebtedness, except that the foregoing restriction shall not apply to:
(i) Liens on assets of any corporation existing at the time such corporation
becomes a Subsidiary; (ii) Liens on assets existing at the time of acquisition
thereof, or to secure the payment of the purchase price of such assets, or to
secure Indebtedness incurred or guaranteed by the Company or a Subsidiary for
the purpose of financing the purchase price of such assets or improvements or
construction thereon, which Indebtedness is incurred or guaranteed prior to, at
the time of or within 360 days after such acquisition (or in the case of real
property, completion of such improvement or construction or commencement of full
operation of such property, whichever is later); (iii) Liens on any assets of a
corporation existing at the time such corporation is merged into or consolidated
with the Company or a Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an entirety or
substantially as an entirety by the Company or a Subsidiary; (iv) Liens on any
assets of the Company or a Subsidiary in favor of the United States of America
or any state thereof, or in favor of any other country, or in favor of any
political subdivision of any of the foregoing, to secure certain payments
pursuant to any contract or statute or to secure any Indebtedness incurred or
guaranteed for the purpose of financing all or any part of the purchase price
(or, in the case of real property, the cost of construction) of the assets
subject to such Liens (including, but not limited to, Liens incurred in
connection with industrial revenue or similar financing involving a political
subdivision, agency or authority thereof); (v) Liens relating to accounts
receivable of the Company or any of its Subsidiaries which have been sold,
assigned or otherwise transferred to another Person in a transaction classified
as a sale of accounts receivable in accordance with GAAP (to the extent the sale
by the Company or the applicable Subsidiary is deemed to give rise to a Lien in
favor of the purchaser thereof in such accounts receivable or the proceeds
thereof); or (vi) any other Permitted Lien.
Notwithstanding the above, the Company or any Subsidiary may, without
securing the Notes, create or assume any Indebtedness which is secured by a Lien
that would otherwise be
45
subject to the foregoing restriction, provided that after giving effect thereto
the Exempted Debt (not including Attributable Indebtedness in respect of Sale
and Leaseback Transactions involving leases not exceeding five years) then
outstanding does not exceed 10% of the total Consolidated Tangible Assets at
such time.
Section 4.19 Limitation on Sale and Leaseback Transactions. After the
occurrence of the Fall-Away Event, neither the Company nor any Subsidiary shall,
directly or indirectly, enter into a Sale and Leaseback Transaction (except such
transactions involving leases not exceeding five years) in respect of any of
their assets unless (i) the Company or such Subsidiary would be entitled
pursuant to clauses (i) through (vi) contained in SECTION 4.18 to create, incur
or permit to exist a lien on the assets to be leased in an amount at least equal
to the Attributable Debt in respect of such transaction without equally and
ratably securing the Notes, or (ii) the proceeds from the sale of the assets to
be leased are at least equal to their fair market value and the proceeds are
applied to the purchase or acquisition (or, in the case of real property, the
construction) of assets or to the retirement of indebtedness.
ARTICLE 5
SURVIVING ENTITY
----------------
Section 5.01 Limitations on Mergers and Consolidations Prior to the
Fall-Away Event. Prior to the occurrence of the Fall-Away Event, the Company
shall not consolidate or merge with or into, or sell, lease, convey or otherwise
dispose of all or substantially all of its assets, or assign any of its
obligations under the Notes or this Indenture, to any Person unless: (i) the
Person formed by or surviving such consolidation or merger (if other than the
Company), or to which such sale, lease, conveyance or other disposition or
assignment shall be made (collectively, the "Successor"), is a corporation
organized and existing under the laws of the United States or any State thereof
or the District of Columbia, and the Successor assumes by supplemental indenture
in a form satisfactory to the Trustee all of the obligations of the Company
under the Notes and this Indenture; (ii) immediately after giving effect to such
consolidation, merger, sale, lease, conveyance or other disposition or
assignment and the use of any net proceeds therefrom on a pro forma basis, no
Default or Event of Default shall have occurred and be continuing; (iii)
immediately after giving effect to such consolidation, merger, sale, lease,
conveyance or other disposition or assignment and the use of any net proceeds
therefrom on a pro forma basis, the Consolidated Net Worth of the Company or the
Successor, as the case may be, would be at least equal to the Consolidated Net
Worth of the Company immediately prior to such transaction; (iv) immediately
after giving effect to such consolidation, merger, sale, lease, conveyance or
other disposition or assignment and the use of any net proceeds therefrom on a
pro forma basis, the EBITDA Coverage Ratio of the Company or the Successor, as
the case may be, would be such that the Company or the Successor, as the case
may be, would be entitled to incur at least $1.00 of additional Indebtedness
under the EBITDA Coverage Ratio test in SECTION 4.11(A) hereof; and (v) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale, lease,
conveyance or other disposition or assignment complies with the provisions of
this Indenture.
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Section 5.02 Limitations on Mergers and Consolidations After the
Fall-Away Event. After the occurrence of the Fall-Away Event, the Company shall
not consolidate with or merge into any other Person, or convey, transfer or
lease its properties and assets substantially as an entirety to any other
Person, and the Company shall not permit any other Person to consolidate with or
merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless (a) either the Company shall
be the continuing corporation, or the successor entity (if other than the
Company) formed by such consolidation or merger or into which the properties and
assets of the Company substantially as an entirety are transferred or leased
shall be a corporation, partnership, limited liability company or trust
organized and existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in a form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and this Indenture, (b) immediately after giving effect to such transaction and
treating any Indebtedness that becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Default or Event
of Default shall have occurred and be continuing and (c) the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, sale, lease, conveyance or other
disposition or assignment complies with the provisions of this Indenture.
Section 5.03 Successor Substituted. Upon any consolidation, merger,
conveyance or any transfer of all or substantially all of the assets of the
Company in accordance with SECTION 5.01 or SECTION 5.02 hereof, the surviving
entity formed by such consolidation or into which the Company or any such
Subsidiary is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Subsidiary, as the case may be, under this Indenture with the same effect as if
such surviving entity had been named as the Company or such Subsidiary, as the
case may be, herein, and thereafter the predecessor entity shall be relieved of
all obligations and covenants under this Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
Section 6.01 Events of Default. An "Event of Default" means any one of
the following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any installment of interest upon
any of the Notes as and when the same shall become due and payable, and
continuance of such default for a period of 30 days;
(b) default in the payment of all or any part of the
principal, or premium, if any, on any of the Notes as and when the same
shall become due and payable either at its Stated Maturity, upon any
redemption, by declaration or otherwise;
47
(c) failure by the Company to comply with its then applicable
obligations or covenants described under SECTION 4.12, SECTION 4.15 or
ARTICLE 5 hereof;
(d) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Notes or this Indenture (other than the covenants
referred to in clauses (a), (b) and (c) above) for a period of 60 days
after the date on which written notice specifying such failure, stating
that such notice is a "Notice of Default" under this Indenture and
demanding that the Company remedy the same, shall have been given by
registered or certified mail, return receipt requested, to the Company
by the Trustee, or to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the outstanding Notes;
(e) default under any bond, debenture, note or other evidence
of indebtedness for money borrowed by the Company or any Subsidiary of
the Company or 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 Subsidiary of the
Company, whether such Indebtedness now exists or shall hereafter be
created, if (i) such default results in such Indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise become due and payable, (ii) the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness which has been so accelerated, aggregates $25,000,000 or
more at any one time outstanding and (iii) such Indebtedness is not
discharged, or such acceleration is not rescinded or annulled, within a
period of 10 days after there shall have been given to the Company by
the Trustee or to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the outstanding Notes a
written notice specifying such default and requiring the Company to
cause such Indebtedness to be discharged or cause such acceleration to
be rescinded or annulled;
(f) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary for any substantial part of its or their property or
ordering the winding up or liquidation of its or their affairs, and
such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(g) the Company or any Significant Subsidiary shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Company or any Significant Subsidiary or for any substantial part of
its or their property, or make any general assignment for the benefit
of creditors.
Section 6.02 Acceleration. If an Event of Default (other than an Event
of Default specified in SECTION 6.01(F) or 6.01(G) hereof relating to the
Company) shall have occurred and
48
be continuing under this Indenture, the Trustee, by written notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding by written notice to the Company and the Trustee, may
declare all amounts owing under the Notes to be due and payable. Upon
effectiveness of such acceleration, the aggregate principal of, premium, if any,
and interest on the outstanding Notes shall immediately become due and payable.
At any time after such acceleration but before a judgment or decree based on
such acceleration is obtained by the Trustee, or any Holder, the Holders of a
majority in aggregate principal amount of outstanding Notes, by written notice
to the Company and the Trustee, may rescind and annul such acceleration if:
(a) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(1) all overdue interest on the Notes;
(2) all unpaid principal of and premium, if any, on any of the
outstanding Notes that has become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by
the Notes;
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate borne
by the Notes; and
(4) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
(b) all Events of Default, other than the non-payment of amounts of
principal of, premium, if any, or interest on the Notes that have become due
solely by such declaration of acceleration, have been cured or waived; and
(c) in the event of the cure or waiver of an Event of Default with
respect to the Company of the type described in SECTION 6.01(F) or 6.01(G)
hereof, the Trustee shall have received an Officers' Certificate and an Opinion
of Counsel that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
In case an Event of Default with respect to the Company of the type
described in SECTION 6.01(F) or 6.01(G) hereof shall occur, the aggregate
principal of, premium, if any, and interest on the outstanding Notes shall
immediately become due and payable without any declaration or other act on the
part of the Trustee or the Holders.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, or premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture and may take any necessary action requested of it as
Trustee to settle, compromise, adjust or otherwise conclude any proceedings to
which it is a party.
49
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. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
Section 6.04 Waiver of Existing Defaults and Events of Default. Subject
to SECTIONS 2.08, 6.02, 6.07 and 8.02 hereof, the Holders of a majority in
principal amount of the Notes then outstanding have the right to waive existing
Defaults under or compliance with any provision of this Indenture or the Notes
except a continuing Default in the payment of the principal of, or interest or
premium, if any, on any Note as specified in clauses (a) and (b) of SECTION 6.01
hereof or in respect of a covenant or a provision which cannot be modified or
amended without the consent of all Holders as provided for in SECTION 8.02
hereof. The Company shall deliver to the Trustee an Officers' Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attach copies of such consents. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Notes, respectively. This paragraph of this SECTION 6.04
shall be in lieu of ss. 316(a)(1)(B) of the TIA and such ss. 316(a)(1)(B) of the
TIA is hereby expressly excluded from this Indenture and the Notes, as permitted
by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 6.05 Control by Majority. Subject to SECTION 2.08 hereof, the
Holders of a majority in principal amount of the then outstanding Notes shall
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee by this Indenture. The Trustee, however, may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines in its reasonable judgment may be unduly prejudicial to
the rights of another Holder not taking part in such direction, and the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, determines that the action so directed may not
lawfully be taken or if the Trustee in good faith shall, by a Trust Officer,
determine that the proceedings so directed may involve it in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. In the event the Trustee takes
any action or follows any direction pursuant to this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction. This SECTION 6.05 shall be in lieu of Section 316(a)(1)(A) of the
TIA, and such Section 316(a)(1)(A) of the TIA is hereby expressly excluded from
this Indenture and the Notes, as permitted by the TIA.
50
Section 6.06 Limitation on Suits. Subject to SECTION 6.07 hereof, no
Holder has any right to institute any proceeding with respect to this Indenture
or any remedy hereunder unless:
(1) the Holder gives the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the outstanding Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss, liability or
expense which may be incurred in compliance with such request;
(4) the Trustee fails to institute such proceeding within 60
calendar days after receipt of such notice and the offer of indemnity;
and
(5) the Trustee has not received directions inconsistent with
such written request during such 60-day period by the Holders of a
majority in aggregate principal amount of such then outstanding Notes.
A Holder may not use this Indenture to 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 of, or premium, if any, or accrued interest on any Note held by such
Holder on or after the respective due dates expressed in such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
is absolute and unconditional (subject to the terms of this Indenture) and shall
not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee. If an Event of Default occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of unpaid
principal, premium, if any, and accrued interest remaining unpaid, together
with, to the extent that payment of such interest is lawful, interest on overdue
principal and interest on overdue installments of interest, in each case at the
rate set forth in the Notes, and such further amounts as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09 Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and 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 collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same after deduction of its charges and expenses to the
extent that any such charges and expenses are not paid out of the estate in any
such proceedings and any custodian in any such judicial proceeding
51
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.
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 Holder's
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceedings.
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 for amounts due under SECTION 7.07
hereof;
SECOND: if the Holders are forced to proceed against the
Company directly without the Trustee, to Holders for their collection
costs; and
THIRD: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes.
The Trustee, upon prior written notice to the Company, 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 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 Notes then outstanding.
ARTICLE 7
TRUSTEE
-------
Section 7.01 Duties of Trustee. (a) If an Event of Default actually
known to a Trust Officer of the Trustee has occurred and is continuing, the
Trustee shall exercise such rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of a Default or an Event of Default:
52
(1) The Trustee need perform only those duties and obligations
that are specifically set forth in this Indenture.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, but, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability 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 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer of the Trustee, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts.
(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 6.02, 6.04 or 6.05 hereof.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
reasonably satisfactory to it against such risk, liability, loss, fee or expense
which might be incurred by it in compliance with such request or direction.
(e) Whether or not expressly so provided, the provisions of the TIA and
paragraphs (a), (b), (c) and (d) of this SECTION 7.01 shall govern every
provision of this Indenture that in any way relates to the Trustee.
(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 the law or as otherwise agreed to in writing by the Trustee
and the Company.
(g) Unless otherwise specifically provided in this Indenture, any
demand, request direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
Section 7.02 Rights of Trustee. Subject to SECTION 7.01 hereof:
53
(1) The Trustee may conclusively rely on any document believed
by it in good faith 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.
(2) Before the Trustee acts or refrains from acting with
respect to any matters contemplated by this Indenture or the Notes it
may require an Officers' Certificate or an Opinion of Counsel, or both,
which shall conform to the provisions of SECTION 10.05 hereof. The
Trustee shall be fully protected and 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.
(3) The Trustee may act through agents, attorneys, custodians
or nominees and shall not be responsible for the misconduct or
negligence of any agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers under this Indenture.
(5) Before the Trustee acts or refrains from acting with
respect to any matters contemplated by this Indenture or the Notes, the
Trustee may consult with counsel of its selection, and the advice or
opinion of such counsel, accountant, appraiser or other expert adviser
whether retained or employed by the Company or the Trustee shall be
full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in
good faith and in reliance thereon.
(6) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and if the
Trustee shall determine in good faith to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(7) In no event shall the Trustee be liable for the selection
of investments or for investment losses incurred thereon. The Trustee
shall have no liability in respect of losses incurred as a result of
the liquidation of any such investment prior to its Stated Maturity or
the failure of the party directing such investment to provide timely
written investment direction. The Trustee shall have no obligation to
invest or reinvest any amounts held hereunder in the absence of
specific written investment direction.
(8) The rights, privileges, immunities and protections
afforded to the Trustee pursuant to this Indenture (including, without
limitation, the right to be indemnified) shall also be afforded to the
Trustee in each of its capacities hereunder and each Paying Agent,
Registrar, Co-Registrar, Custodian, transfer agent or tender agent and
each agent or other Person employed to act hereunder.
54
(9) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is
in fact such a default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Notes and
this Indenture.
(10) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed
by any person authorized to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded.
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 make loans to, accept deposits from, perform services for or otherwise deal
with the Company, or any Affiliates thereof, with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. The Trustee,
however, shall be subject to SECTIONS 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 or any recitals therein, it shall not be accountable for the
Company's use of the proceeds from the sale of Notes or any money paid to the
Company pursuant to the terms of this Indenture and it shall not be responsible
for any statement in the Notes other than its certificate of authentication.
Section 7.05 Notice of Defaults. If a Default or an Event of Default
occurs and is continuing and is known to a Trust Officer of the Trustee, the
Trustee shall mail to each Holder notice of the uncured Default or Event of
Default within 7 days after obtaining knowledge thereof. Except in the case of a
Default or an Event of Default in payment of principal of, premium, if any, or
interest on, any Note, including an accelerated payment and the failure to make
payment on the Change of Control Payment Date pursuant to a Change of Control
Offer or on the Excess Proceeds Payment Date pursuant to an Asset Sale Offer,
and except in the case of a failure to comply with ARTICLE 5 hereof, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of the
Holders. This SECTION 7.05 shall be in lieu of the proviso to Section 315(b) of
the TIA, and such proviso of Section 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.
Section 7.06 Reports by Trustee to Holders. If required by TIA Section
313(a), within 60 days after May 15 of any year, commencing on May 15, 2003, the
Trustee shall transmit by mail to each Holder a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply with
the reporting requirements of TIA Sections 313(b), (c) and (d).
55
A copy of each such report at the time of such mailing to Holders shall
be mailed to the Company and, if the Notes are listed on a stock exchange, filed
with the Commission and each stock exchange on which the Notes are listed as
provided by TIA Section 313(d). The Company shall promptly notify the Trustee
when the Notes are listed on any stock exchange and any delisting thereof.
Section 7.07 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as may from time to time be agreed
in writing between the Company and the Trustee for its services hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). Except as otherwise provided
herein, the Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in connection with
its duties under this Indenture, including the reasonable compensation,
disbursements and expenses of the Trustee's agents, counsel, custodians and
nominees, except for any such disbursement or expense as may result from the
Trustee's negligence, bad faith or willful misconduct.
The Company shall indemnify each of the Trustee and its officers,
directors, employees and agents and any predecessor Trustee and its officers,
directors, employees and agents for, and hold it or them harmless against, any
and all loss, damage, claim, liability or reasonable expense, including taxes
(other than franchise taxes and taxes based on the income of the Trustee)
incurred by it or them in connection with the acceptance or performance of its
duties under this Indenture and any other documents and transactions in
connection therewith including the reasonable costs and expenses of 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 or their powers or duties hereunder (including, without limitation,
settlement costs, provided any settlement with respect to which indemnification
is sought shall have been consented to by the Company). The Trustee shall notify
the Company in writing promptly of any claim asserted against the Trustee for
which it may seek indemnity. However, the failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder except to
the extent the Company is prejudiced thereby. This SECTION 7.07 shall survive
the termination of this Indenture and the earlier resignation or removal of the
Trustee.
Notwithstanding the foregoing, the Company need not reimburse the
Trustee for any expense or indemnify it against any loss, damage, claim or
liability incurred by the Trustee as a result of its negligence, bad faith or
willful misconduct. To secure the payment obligations of the Company in this
SECTION 7.07, the Trustee shall have a lien prior to the Notes on all money or
property held or collected by the Trustee except such money or property held in
trust to pay principal of and interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in SECTION 6.01(F) or 6.01(G) hereof occurs, the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any Federal or state bankruptcy, insolvency or similar law.
The obligation of the Company under this SECTION 7.07 shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.
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Section 7.08 ______ Replacement of Trustee. The Trustee may resign by
so notifying the Company in writing. The Holders of a majority in principal
amount of the then outstanding Notes may remove the Trustee by notifying the
removed Trustee and the Company in writing and may appoint a successor Trustee
with the Company's written consent. The Company may remove the Trustee at its
election if:
(1) the Trustee fails to comply with SECTION 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a receiver or other public officer takes charge or control
of the Trustee or its property or affairs; or
(4) the Trustee otherwise 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.
No resignation or removal of the Trustee shall become effective until
the acceptance of appointment by the successor Trustee. 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 a majority in
principal amount of the outstanding Notes may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with SECTION 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee if the Trustee fails after written
request thereof by such Holder to comply with such SECTION 7.10.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery, the resignation or removal of the retiring Trustee shall become
effective and the retiring Trustee shall, subject to its rights under SECTION
7.07 hereof, transfer all property held by it as Trustee to the successor
Trustee, and the successor Trustee, after any and all amounts then due and owing
the Trustee hereunder have been paid in full, shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder. 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 Consolidation, Merger or Conversion.
If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust assets to, another corporation, subject
to SECTION 7.10 hereof, the successor corporation without any further act shall
be the successor Trustee. In case at the time such successor or successors by
merger, conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall
57
not have been authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any such successor to the Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which, under any provision of the Notes
or in this Indenture, the certificate of the Trustee shall have.
Section 7.10 Eligibility; Disqualification. This Indenture shall always
have a Trustee which shall be eligible to act as Trustee under TIA Sections
310(a)(1) and 310(a)(2). The Trustee, together with any other Person that owns,
directly by such Person or through one or more other Wholly Owned Subsidiaries
of such Person, all of the Common Equity of the Trustee, shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. If the Trustee has or shall acquire any
"conflicting interest" within the meaning of TIA Section 310(b), the Trustee and
the Company shall comply with the provisions of TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this SECTION 7.10, the Trustee shall resign
immediately in the manner and with the effect hereinbefore specified in this
ARTICLE 7.
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
MODIFICATIONS, AMENDMENTS, SUPPLEMENTS AND WAIVERS
--------------------------------------------------
Section 8.01 Without Consent of Holders. The Company, when authorized
by a Board Resolution of the Company, and the Trustee may modify, amend or
supplement this Indenture or the Notes without notice to or consent of any
Holder:
(1) to cure any ambiguity, or to correct or supplement any
provision in this Indenture or the Notes or make any other provisions
with respect to matters or questions arising under this Indenture or
the Notes; provided that, in each case, such provisions shall not
adversely affect the interest of the Holders;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(3) to provide for the assumption by a successor corporation
of the Company's obligations under this Indenture;
(4) to add guarantees with respect to the Notes;
(5) to secure the Notes;
58
(6) to add to the covenants of the Company or the Events of
Default for the benefit of Holders;
(7) to surrender any right or power conferred on the Company;
or
(8) to make any other change that does not adversely affect
the rights of any Holder or to comply with any requirement of the
Commission in connection with the qualification of this Indenture under
the Trust Indenture Act.
Section 8.02 With Consent of Holders. Subject to SECTION 6.07 hereof,
the Company and the Trustee may modify, amend or supplement this Indenture or
the Notes with the written consent of the Holders of a majority in principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes). Subject
to SECTIONS 6.04 and 6.07 hereof, the Holders of a majority in principal amount
of the then outstanding Notes may waive compliance by the Company with any
provision of this Indenture or the Notes. However, without the consent of each
Holder affected (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Notes), a modification, amendment,
supplement or waiver, including a waiver pursuant to SECTION 6.04 hereof, may
not:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, such Note or alter the optional redemption
provisions thereof;
(2) reduce the principal amount of, or premium, if any, or
interest on, such Note or extend the time of payments under the Notes;
(3) modify the ranking of the Notes in a manner adverse to the
Holder;
(4) change the place or currency of payment of principal of,
or premium, if any, or interest on, such Note;
(5) alter the provisions with respect to the obligation of the
Company to make a Change of Control Offer in accordance with SECTION
4.15 hereof or to make an Asset Sale Offer in accordance with SECTION
4.12 hereof;
(6) impair the right to institute suit for the enforcement of
any payment on or with respect to such Note; or
(7) reduce the percentage in principal amount of the
outstanding Notes, the consent of whose Holders is required for
modification or amendment of this Indenture or for waiver of compliance
with certain provisions of this Indenture or for waiver of certain
Defaults or Events of Default.
After an amendment, supplement or waiver under this SECTION 8.02
becomes effective, the Company shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
59
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the
consent of the Holders as aforesaid and upon receipt by the Trustee of the
documents described in SECTION 8.06 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture, in which case the Trustee may in its own discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
SECTION 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
Section 8.03 Compliance with TIA. Every amendment to or supplement of
this Indenture or the Notes shall comply with the TIA as then in effect.
Section 8.04 Revocation and Effect of Consents. Until an amendment,
waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. Subject to the
following paragraph, any such Holder or subsequent Holder may revoke the consent
as to such Holder's Note or portion of such Note by notice to the Trustee or the
Company received before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a Record Date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such Record Date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons shall continue to be Holders after such Record Date. No such consent
shall be valid or effective for more than 90 days after such Record Date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of SECTION 8.02 hereof, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not, without
the consent of such Holder, impair or affect the right of any Holder to receive
payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates.
Section 8.05 Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may request the
Holder to deliver it to the Trustee. In such case, the Trustee shall place an
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so
60
determine, in exchange for the Note the Company shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 8.06 Trustee To Sign Amendments, etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this ARTICLE 8 is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
Section 9.01 Satisfaction and Discharge of Indenture. This Indenture
shall be discharged and shall cease to be of further effect (except those
obligations referred to in the penultimate paragraph of this SECTION 9.01) and
the Trustee, on written demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when either:
(a) all Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in SECTION 2.06 hereof and (ii) Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the
Trustee for cancellation; or
(b) (i) either (A) pursuant to ARTICLE 3 hereof, the Company
shall have given notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the Notes under
arrangements satisfactory to the Trustee for the giving of such notice
or (B) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable; (ii) the Company has
irrevocably deposited or caused to be deposited with the Trustee in
trust for the purpose an amount in U.S. legal tender sufficient to pay
and discharge the entire Indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for the principal of,
premium, if any, and interest to the date of such deposit; (iii) no
Default or Event of Default with respect to this Indenture or the Notes
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 material instrument to which the Company is a party or by which
it is bound (other than a Default or Event of Default resulting from
the incurrence of Indebtedness, all or a portion of which will be used
to defease the Notes concurrently with such incurrence); (iv) the
Company has paid or caused to be paid all other sums payable hereunder
by the Company; and (v) the Company has delivered to the Trustee (A)
irrevocable instructions to apply the deposited
61
money toward payment of the Notes at the Stated Maturity thereof, and
(B) an Officers' Certificate and an Opinion of Counsel each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with
and that such satisfaction and discharge does not result in a default
under any material agreement or instrument then known to such counsel
which binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
ARTICLE 2 and SECTIONS 4.01, 4.07, 7.07 and 8.06 hereof shall survive until the
Notes are no longer outstanding pursuant to the last paragraph of SECTION 2.07
hereof. After the Notes are no longer outstanding pursuant to SECTION 2.07
hereof, the Company's obligations under SECTIONS 7.07 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations specified
above.
Section 9.02 Legal Defeasance. (a) The Company may, at its option by a
Board Resolution of the Board of Directors of the Company, at any time, elect to
have this SECTION 9.02 be applied to all outstanding Notes upon compliance with
the conditions set forth in SECTION 9.04 hereof.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in SECTION 9.04 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 Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of SECTION 9.05 hereof and the other Sections of this Indenture
referred to in clauses (i) and (ii) 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: (i) the rights of
Holders of outstanding Notes to receive, solely from the trust fund described in
SECTION 9.05 hereof and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due on the Stated Maturity thereof (or, upon redemption, if
applicable), (ii) the Company's obligations with respect to such Notes under
ARTICLE 2 and SECTION 4.07 hereof, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (iv) this ARTICLE 9. Subject to compliance with this ARTICLE 9,
the Company may exercise its option under this SECTION 9.02 notwithstanding the
prior exercise of its option under SECTION 9.03 below with respect to the Notes.
Section 9.03 Covenant Defeasance. (a) The Company may, at its option by
a Board Resolution of the Board of Directors of the Company, at any time, elect
to have this SECTION 9.03 be applied to all outstanding Notes upon compliance
with the conditions set forth in SECTION 9.04 hereof.
62
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in SECTION 9.04 hereof, be released
from its obligations under the covenants contained in SECTIONS 4.05 and 4.08
through 4.19, inclusive, and ARTICLE 5 hereof with respect to the outstanding
Notes on and after the date the conditions set forth below 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. For this purpose, such 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
or Default under SECTION 6.01(C) or 6.01(D) hereof, but, except as specified
above, the remainder of this Indenture, and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (b), subject to the satisfaction of the
conditions set forth in SECTION 9.04 hereof, SECTIONS 6.01(C) and 6.01(D)
(solely to the extent the operation of such Sections relates to the failure by
the Company to comply with, or otherwise to observe or perform, its then
applicable obligations or covenants described under any of SECTIONS 4.05 and
4.08 through 4.19, inclusive, and ARTICLE 5 hereof) shall not constitute Events
of Default.
Section 9.04 Conditions to Legal Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of either SECTION 9.02 or
9.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit or cause to be
deposited with the Trustee, as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders, cash in U.S. dollars, or U.S. Government Obligations, or in
the case of Covenant Defeasance, corporate obligations rated at least
"A" by S&P or at least "A" by Moody's or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay and discharge
the principal of, premium, if any, and interest on the outstanding
Notes on the Stated Maturity thereof (or upon redemption, if
applicable) of such principal, premium, if any, or installment of
interest;
(b) no Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit or,
insofar as an event of bankruptcy under clause (f) or (g) of SECTION
6.01 hereof is concerned, at any time during the period ending on the
91st day after the date of such deposit;
63
(c) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any material agreement or instrument to which the Company
is a party or by which it is bound;
(d) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or since the Issue Date, there has been a change in
applicable federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the Holders of the
outstanding Notes of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred; and
(e) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of outstanding Notes of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred; and
(f) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for herein relating to either the Legal
Defeasance or the Covenant Defeasance, as the case may be, have been
complied with.
Section 9.05 Application of Trust Money. All money and U.S. Government
Obligations deposited with the Trustee pursuant to SECTION 9.01 or 9.04 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 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 accrued interest, but such
money need not be segregated from other funds except to the extent required by
law.
Anything in this ARTICLE 9 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon a written request of
the Company in the form of an Officers' Certificate any money or U.S. Government
Obligations held by it as provided in SECTION 9.01 or 9.04 hereof which, in the
opinion of a nationally-recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.06 Repayment to the Company. Subject to SECTIONS 9.01, 9.02,
9.03, 9.04, 9.05 and 9.07, the Trustee and the Paying Agent shall promptly pay
to the Company upon request any excess U.S. legal tender or U.S. Government
Obligations held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the
64
payment of principal, premium, if any, or interest that remains unclaimed for
two years (or such shorter period for the return of such moneys to the Company
under applicable abandoned property laws); provided that the Trustee or such
Paying Agent, before being required to make any payment, may at the expense of
the Company cause to be published once in a newspaper of general circulation in
the City of New York or mail to each Holder entitled to such money notice that
such money remains unclaimed, and that after a date specified therein which
shall be at least 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person.
Section 9.07 Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with SECTION 9.01,
9.02 or 9.03 hereof by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this ARTICLE 9 until such time as the Trustee or Paying
Agent is permitted to apply all such money and U.S. Government Obligations in
accordance with SECTION 9.01 hereof; provided, however, that if the Company has
made any payment of principal of, premium, if any, or accrued interest on any
Notes because of the reinstatement of their obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money and U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 10
MISCELLANEOUS
-------------
Section 10.01 TIA Controls. If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the required provision shall control.
Section 10.02 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to the Company:
HEALTHSOUTH Corporation
One HealthSouth Parkway
Birmingham, Alabama 35243
Telephone No.: (205) 969-4977
Facsimile No.: (205) 969-4730
Attention: William W. Horton
65
If to the Trustee:
The Bank of Nova Scotia Trust Company of New York
One Liberty Plaza, 23rd Floor
New York, NY 10006
Facsimile No.: (212) 225-5436
Attention: Corporate Trust Office
The Company or the Trustee by written notice to the other may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication to the Company or the Trustee, shall be deemed to have
been given or made when actually received.
Any notice or communication mailed to a Holder shall be mailed by
first-class mail, postage prepaid, at the address shown on the register kept by
the Registrar.
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 to a Holder is mailed in the manner provided above, it shall be
deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 10.03 Communications by Holders with Other Holders. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
Section 10.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in SECTION 10.05 hereof) stating that, in the
opinion of the signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel (which shall include the statements
set forth in SECTION 10.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with.
66
Section 10.05 Statements Required in Certificate and Opinion. Each
certificate and opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition and the definitions
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, it or he
has made such examination or investigation as is reasonably necessary
to enable such person to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such covenant or condition has been complied with; provided,
however, that with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
Section 10.06 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at meetings of Holders. The Registrar and
Paying Agent may make reasonable rules for their functions.
Section 10.07 Business Days; Legal Holidays. A "Business Day" is a day
that is not a Legal Holiday. A "Legal Holiday" is a Saturday, a Sunday, a
federally-recognized holiday or a day on which banking institutions are not
required to be open in the State of New York. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 10.08 Governing Law. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 10.09 Waiver of Trial by Jury. The Company hereby irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to this Indenture.
Section 10.10 Submission to Jurisdiction. The Company hereby consents
to the non-exclusive jurisdiction of a state or federal court situated in New
York, New York in connection with any dispute arising hereunder or under the
Notes. The Company hereby irrevocably waives, to the fullest extent permitted by
applicable law, any objection which it may now or hereafter have to the laying
of venue of any such proceeding brought in such a court and any claim that such
proceeding brought in such a court has been brought in an inconvenient forum.
67
Section 10.11 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan, security or debt
agreement of the Company or any Subsidiary thereof. No such indenture, loan,
security or debt agreement may be used to interpret this Indenture.
Section 10.12 No Recourse Against Others. No incorporator, director,
officer, employee, stockholder or controlling person, as such, of the Company
shall have any liability for any obligations of the Company under the Notes or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
Section 10.13 Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the
Trustee, any additional trustee and any Paying Agents in this Indenture shall
bind its successor.
Section 10.14 Multiple Counterparts. The parties may sign multiple
counterparts of this Indenture. Each signed counterpart shall be deemed an
original, but all of them together represent one and the same agreement.
Section 10.15 Table of Contents, Headings, etc. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 10.16 Separability. Each provision of this Indenture shall be
considered separable and if for any reason any provision 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 to the
extent allowed by law.
Section 10.17 Translation. The original and controlling version of this
Indenture and any related agreements shall be the English language version. All
translations of this Indenture or any agreements related hereto into other
languages shall be for the convenience of the parties only, and shall not
control the meaning or application of this Indenture. All notices and other
communications required or permitted by this Indenture or any other
transactional agreement must be in English or accompanied by an English
translation, and the interpretation and application of such notices and other
communications shall be based solely upon the English language version thereof.
68
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed all as of the date and year first written above.
Company:
-------
HEALTHSOUTH CORPORATION
By: /s/ William T. Owens
-------------------------------------------------
Name: William T. Owens
Title: President and Chief Operating Officer
Trustee:
-------
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, as
Trustee
By: /s/ Warren A. Goshine
-------------------------------------------------
Name: Warren A. Goshine
Title: Vice President
S-1
EXHIBIT A
---------
[FORM OF SERIES A NOTE]
CUSIP No.:
HEALTHSOUTH CORPORATION
7-5/8% SENIOR NOTE DUE 2012
No. $
HEALTHSOUTH CORPORATION, a corporation incorporated in Delaware (the
"Company," which term includes any successor entity), for value received
promises to pay to __________________ or registered assigns, the principal sum
of $______________ on June 1, 2012.
Interest Payment Dates: June 1 and December 1, commencing December 1,
2002.
Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized directors, officers or other
authorized signatories.
HEALTHSOUTH CORPORATION
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
Date: May 22, 2002
This is one of the 7-5/8% Senior Notes due 2012 referred to in the
within-mentioned Indenture.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By:
--------------------------------------
Name:
Title:
A-2
(REVERSE OF SECURITY)
7-5/8% SENIOR NOTE DUE 2012
1. Interest. HEALTHSOUTH CORPORATION, a corporation incorporated in
Delaware (the "Company"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or duly provided for,
or if no interest has been paid, from the date of the original issuance of the
Notes. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing December 1, 2002. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on May 15 or November 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
canceled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in U.S. legal tender;
provided, however, that the Company may pay principal, premium, if any, and
interest by check payable in U.S. legal tender. The Company may deliver any such
interest payment by check mailed to the address of the Person entitled thereto
as such address will appear on the security register.
3. Paying Agents and Registrar. Initially, The Bank of Nova Scotia
Trust Company of New York (the "Trustee"), will act as Paying Agent and the
Trustee will act as Registrar. The Company may change any Paying ------- Agents,
Registrar or co-Registrar without notice to the Holders. Neither the Company nor
any of its Subsidiaries or Affiliates may act as Paying Agent but may act as
Registrar or co-Registrar.
4. Indenture. The Company issued this Note under an Indenture, dated as
of May 22, 2002 (the "Indenture"), by and between the Company and the Trustee.
This Note is one of a duly authorized issue of Initial Notes of the Company
designated as its 7-5/8% Senior Notes due 2012 (the "Notes"). The Notes include
the Initial Notes and the Exchange Notes issued pursuant to the Indenture. The
Initial Notes and the Exchange Notes are treated as a single class of securities
under the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and the TIA for a statement of them. The Notes are
general unsecured obligations of the Company.
A-3
5. Redemption. The Notes will be redeemable, in whole or in part, at
the option of the Company at any time at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed plus any applicable Make-Whole
Premium (together, the "Redemption Price") plus accrued interest thereon to the
date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of the principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.50%.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains three or fewer such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Make-Whole Premium" means, for any Note to be redeemed, a premium
equal to the excess (if any) of (i) as determined by a Quotation Agent, the sum
of the present values of the remaining scheduled payments of principal and
interest on such Note discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate over (ii) 100% of the unpaid principal amount of such Note. If a
redemption date does not fall on an interest payment date, then, with respect to
the interest payment immediately succeeding the redemption date, only the
unaccrued portion of such interest payment as of the redemption date shall be
included in the calculation pursuant to clause (i) above.
"Quotation Agent" means one of the Reference Treasury Dealers appointed
by the Company.
"Reference Treasury Dealer" means each of UBS Warburg LLC, Deutsche
Bank Securities Inc. and Banc of America Securities LLC and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
such Reference Treasury Dealer, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing by such Reference Treasury Dealer at 5:00 p.m. on the third
business day preceding such redemption date.
If less than all of the Notes are to be redeemed at any time, selection
of the Notes to be redeemed will be made by the Trustee from among the
outstanding Notes on a pro rata basis, by lot or by any other method permitted
in the Indenture. On and after the redemption date, interest will cease to
accrue on the Notes or portions thereof called for redemption.
A-4
The Notes will not be entitled to any sinking fund.
6. Notice of Redemption. Notice of redemption under paragraph 5 of this
Note will be mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then the Notes called for redemption
will cease to bear interest from and after such Redemption Date and the only
right of the Holders of such Notes will be to receive payment of the Redemption
Price plus interest accrued through the Redemption Date, if any.
7. Offers to Purchase. Prior to the occurrence of the Fall-Away Event
(as defined in the Indenture), the Indenture provides that, after certain Asset
Sales (as defined in the Indenture) or upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
8. Registration Rights. Pursuant to the Registration Rights Agreement
by and between the Company and the Initial Purchasers, the Company will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Note shall have the right to exchange this Note for the Company's Series B
7-5/8% Senior Notes due 2012 (the "Exchange Notes"), at such time as the
Exchange Notes shall have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects to the
Initial Notes (except that such Exchange Notes will not contain terms with
respect to transfer restrictions or additional interest). The Holders of the
Initial Notes shall be entitled to receive certain Additional Interest payments
in the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the Registration
Rights Agreement.
9. Denominations; Transfer; Exchange. The Notes are in definitive,
fully registered form, without coupons, in minimum denominations of $1,000 and
in integral multiples of $1,000 in excess thereof. A Holder shall register the
transfer or exchange of Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange of any Notes or portions
thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of such Note for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years (or such shorter period for the return of such
moneys to the Company under applicable abandoned property laws), the Trustee and
the Paying Agent will pay the money back to the Company. After that, Holders
entitled to money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another person.
A-5
12. Legal Defeasance and Covenant Defeasance. If the Company at any
time deposits with the Trustee U.S. legal tender or other obligations of the
types set forth in the Indenture sufficient to pay the principal of and interest
on the Notes to Stated Maturity or redemption, if applicable, and complies with
the other provisions of the Indenture relating to Legal Defeasance or Covenant
Defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. Amendments, Supplements, and Waivers. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate outstanding
principal amounts of the Notes, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, make
payments in respect of its Capital Stock, incur additional Indebtedness, make
certain investments, sell assets, enter into transactions with Affiliates,
create Liens, merge or consolidate with or into any other Person or sell, lease,
convey or otherwise dispose of all or substantially all of its assets or create
dividend or other payment restrictions affecting Subsidiaries of the Company.
Such limitations are subject to a number of important qualifications and
exceptions and, in certain instances upon the occurrence of certain events,
cease to be binding upon the Company and its Subsidiaries. The Company must
report on an annual basis to the Trustee on compliance with such limitations.
15. Successor. When a Successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, and immediately before and thereafter no Default exists and certain
other conditions are satisfied, the predecessor entity will be released from
those obligations.
16. Defaults and Remedies. Events of Default are set forth in the
Indenture. If an Event of Default (other than an Event of Default with respect
to the Company pursuant to SECTION 6.01(F) or 6.01(G) of the Indenture) shall
have occurred and be continuing, then the Trustee by written notice to the
Company, or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding by written notice to the Company and the Trustee, may
declare to be immediately due and payable the entire principal amount of all the
Notes then outstanding plus accrued interest to the date of acceleration;
provided, however, that after such acceleration but before a judgment or decree
based on such acceleration is obtained by the Trustee, the Holders of a majority
in aggregate principal amount of the outstanding Notes by written notice to the
Company and the Trustee may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default with respect to the Company specified in SECTION 6.01(F) or
A-6
6.01(G) of the Indenture occurs, the principal amount, together with premium, if
any, and interest with respect to all of the Notes, shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of the Notes.
17. Trustee Dealings with Company. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company, and may otherwise deal with the Company,
its Subsidiaries or their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No incorporator, director, officer,
employee, stockholder or controlling person, as such, of the Company shall have
any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
19. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Multiple Counterparts. The parties may sign multiple counterparts
of this Note. Each signed counterpart shall be deemed an original but all of
them together represent one and the same Note.
21. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
22. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note 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).
23. CUSIP Numbers. The Company has caused CUSIP numbers to be printed
on the Notes as a convenience to the Holders. No representation is made as to
the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: HEALTHSOUTH
Corporation, One HealthSouth Parkway, Birmingham, Alabama 35243, Telephone No.
(205) 969-4977, Facsimile No. (205) 969-4730, Attention: William W. Horton.
A-7
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
-------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Signed:
----------------------------- ---------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in every
particular without alteration or
enlargement or any change
whatsoever and be guaranteed by
the endorser's bank or broker.
Medallion Guarantee:
---------------------------
A-8
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to SECTION 4.12 or SECTION 4.15 of the Indenture, check the appropriate
box:
Section 4.12 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to SECTION 4.12 or SECTION 4.15 of the Indenture, state the
amount you elect to have purchased:
$
--------------------------
Date:
----------------------
- ------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
A-9
EXHIBIT B
---------
[FORM OF SERIES B NOTE]
CUSIP No.:
HEALTHSOUTH CORPORATION
7-5/8% SENIOR NOTE DUE 2012
No. $
HEALTHSOUTH CORPORATION, a corporation incorporated in Delaware (the
"Company," which term includes any successor entity), for value received
promises to pay to ___________________ or registered assigns, the principal sum
of $_______________ on June 1, 2012.
Interest Payment Dates: June 1 and December 1, commencing December 1,
2002.
Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
B-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized directors, officers or other
authorized signatories.
HEALTHSOUTH CORPORATION
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
Date:
This is one of the 7-5/8% Senior Notes due 2012 referred to in the
within-mentioned Indenture.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By:
---------------------------------------
Authorized Signatory
B-2
(REVERSE OF SECURITY)
7-5/8% SENIOR NOTE DUE 2012
1. Interest. HEALTHSOUTH CORPORATION, a corporation incorporated in
Delaware (the "Company"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or duly provided for,
or if no interest has been paid, from the date of the original issuance of the
Notes. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing December 1, 2002. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on May 15 or November 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
canceled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in U.S. legal tender;
provided, however, that the Company may pay principal, premium, if any, and
interest by check payable in U.S. legal tender. The Company may deliver any such
interest payment by check mailed to the address of the Person entitled thereto
as such address will appear on the security register.
3. Paying Agents and Registrar. Initially, The Bank of Nova Scotia
Trust Company of New York (the "Trustee"), will act as Paying Agent and the
Trustee will act as Registrar. The Company may change any Paying Agents,
Registrar or co-Registrar without notice to the Holders. Neither the Company nor
any of its Subsidiaries or Affiliates may act as Paying Agent but may act as
Registrar or co-Registrar.
4. Indenture. The Company issued this Note under an Indenture, dated as
of May 22, 2002 (the "Indenture"), by and between the Company and the Trustee.
This Note is one of a duly authorized issue of Exchange Notes of the Company
designated as its 7-5/8% Senior Notes due 2012 (the "Notes"). The Notes include
the Initial Notes and the Exchange Notes issued pursuant to the Indenture. The
Initial Notes and the Exchange Notes are treated as a single class of securities
under the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and the TIA for a statement of them. The Notes are
general unsecured obligations of the Company.
B-3
5. Redemption. The Notes will be redeemable, in whole or in part, at
the option of the Company at any time at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed plus any applicable Make-Whole
Premium (together, the "Redemption Price") plus accrued interest thereon to the
date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of the principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.50%.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains three or fewer such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Make-Whole Premium" means, for any Note to be redeemed, a premium
equal to the excess (if any) of (i) as determined by a Quotation Agent, the sum
of the present values of the remaining scheduled payments of principal and
interest on such Note discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate over (ii) 100% of the unpaid principal amount of such Note. If a
redemption date does not fall on an interest payment date, then, with respect to
the interest payment immediately succeeding the redemption date, only the
unaccrued portion of such interest payment as of the redemption date shall be
included in the calculation pursuant to clause (i) above.
"Quotation Agent" means one of the Reference Treasury Dealers appointed
by the Company.
"Reference Treasury Dealer" means each of UBS Warburg LLC, Deutsche
Bank Securities Inc. and Banc of America Securities LLC and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
such Reference Treasury Dealer, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing by such Reference Treasury Dealer at 5:00 p.m. on the third
business day preceding such redemption date.
If less than all of the Notes are to be redeemed at any time, selection
of the Notes to be redeemed will be made by the Trustee from among the
outstanding Notes on a pro rata basis, by lot or by any other method permitted
in the Indenture. On and after the redemption date, interest will cease to
accrue on the Notes or portions thereof called for redemption.
B-4
The Notes will not be entitled to any sinking fund.
6. Notice of Redemption. Notice of redemption under paragraph 5
of this Note will be mailed at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then the Notes called for redemption
will cease to bear interest from and after such Redemption Date and the only
right of the Holders of such Notes will be to receive payment of the Redemption
Price plus interest accrued through the Redemption Date, if any.
7. Offers to Purchase. Prior to the occurrence of the Fall-Away Event
(as defined in the Indenture), the Indenture provides that, after certain Asset
Sales (as defined in the Indenture) or upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
8. Denominations; Transfer; Exchange. The Notes are in definitive,
fully registered form, without coupons, in minimum denominations of $1,000 and
in integral multiples of $1,000 in excess thereof. A Holder shall register the
transfer or exchange of Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange of any Notes or portions
thereof selected for redemption.
9. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of such Note for all purposes.
10. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years (or such shorter period for the return of such
moneys to the Company under applicable abandoned property laws), the Trustee and
the Paying Agent will pay the money back to the Company. After that, Holders
entitled to money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another person.
11. Legal Defeasance and Covenant Defeasance. If the Company at any
time deposits with the Trustee U.S. legal tender or other obligations of the
types set forth in the Indenture sufficient to pay the principal of and interest
on the Notes to Stated Maturity or redemption, if applicable, and complies with
the other provisions of the Indenture relating to Legal Defeasance or Covenant
Defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
12. Amendments, Supplements, and Waivers. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders
B-5
of at least a majority in aggregate outstanding principal amounts of the Notes,
and any existing Default or Event of Default or noncompliance with any provision
may be waived with the written consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency or
make any other change that does not adversely affect in any material respect the
rights of any Holder of a Note.
13. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, make
payments in respect of its Capital Stock, incur additional Indebtedness, make
certain investments, sell assets, enter into transactions with Affiliates,
create Liens, merge or consolidate with or into any other Person or sell, lease,
convey or otherwise dispose of all or substantially all of its assets or create
dividend or other payment restrictions affecting Subsidiaries of the Company.
Such limitations are subject to a number of important qualifications and
exceptions and, in certain instances upon the occurrence of certain events,
cease to be binding upon the Company and its Subsidiaries. The Company must
report on an annual basis to the Trustee on compliance with such limitations.
14. Successor. When a Successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, and immediately before and thereafter no Default exists and certain
other conditions are satisfied, the predecessor entity will be released from
those obligations.
15. Defaults and Remedies. Events of Default are set forth in the
Indenture. If an Event of Default (other than an Event of Default with respect
to the Company pursuant to SECTION 6.01(F) or 6.01(G) of the Indenture) shall
have occurred and be continuing, then the Trustee by written notice to the
Company, or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding by written notice to the Company and the Trustee, may
declare to be immediately due and payable the entire principal amount of all the
Notes then outstanding plus accrued interest to the date of acceleration;
provided, however, that after such acceleration but before a judgment or decree
based on such acceleration is obtained by the Trustee, the Holders of a majority
in aggregate principal amount of the outstanding Notes by written notice to the
Company and the Trustee may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default with respect to the Company specified in SECTION 6.01(F) or 6.01(G) of
the Indenture occurs, the principal amount, together with premium, if any, and
interest with respect to all of the Notes, shall be due and payable immediately
without any declaration or other act on the part of the Trustee or the Holders
of the Notes.
16. Trustee Dealings with Company. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company, and may otherwise deal with the Company,
its Subsidiaries or their respective Affiliates as if it were not the Trustee.
B-6
17. No Recourse Against Others. No incorporator, director, officer,
employee, stockholder or controlling person, as such, of the Company shall have
any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
18. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
19. Multiple Counterparts. The parties may sign multiple counterparts
of this Note. Each signed counterpart shall be deemed an original but all of
them together represent one and the same Note.
20. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
21. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note 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).
22. CUSIP Numbers. The Company has caused CUSIP numbers to be printed
on the Notes as a convenience to the Holders. No representation is made as to
the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: HEALTHSOUTH
Corporation, One HealthSouth Parkway, Birmingham, Alabama 35243, Telephone No.
(205) 969-4977, Facsimile No. (205) 969-4730, Attention: William W. Horton.
B-7
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
-------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Signed:
----------------------------- --------------------------------
(Sign exactly as your name
appears on the other side of this
Note)
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in every
particular without alteration or
enlargement or any change
whatsoever and be guaranteed by
the endorser's bank or broker.
Medallion Guarantee:
--------------------------
B-8
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to SECTION 4.12 or SECTION 4.15 of the Indenture, check the appropriate
box:
Section 4.12 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to SECTION 4.12 or SECTION 4.15 of the Indenture, state the
amount you elect to have purchased:
$
------------------------
Date:
--------------------
- ------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
B-9
EXHIBIT C
---------
[FORM OF RULE 144A TRANSFER CERTIFICATE]
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of May 22, 2002,
between HEALTHSOUTH Corporation, as Issuer (the "Company"), and The Bank of Nova
Scotia Trust Company of New York, as Trustee. Capitalized terms used but not
defined herein shall have the respective meanings given to such terms in the
Indenture or Rule 144A, as the case may be.
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(VI):
This certificate relates to US$___________ principal amount of Notes
which are held in the form of a beneficial interest in the Restricted Global
Note (CUSIP No. ______________ ) with the Depositary in the name of [insert name
of transferor] (the "Transferor"). The Transferor has requested a transfer of
such beneficial interest for one or more Certificated Notes to be registered in
the name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(V):
This certificate relates to US$___________ principal amount of Notes
which are held in the form of a beneficial interest in the Regulation S Global
Note (CUSIP No. ______________ ) with the Depositary in the name of [insert name
of transferor] (the "Transferor"). The Transferor has requested a transfer of
such beneficial interest for a beneficial interest in the Restricted Global Note
to be registered in the name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(C)(III):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of one or more Certificated Notes registered in the
name of [insert name of transferor (the "Transferor"). The Transferor has
requested a transfer of such Certificated Notes for a beneficial interest in the
Restricted Global Note (CUSIP No. _____________ ) to be held [with the
Depositary in the name of [insert name of Transferee] (the "Transferee").]
In connection with such request for transfer and in respect of such
Notes, the Transferor does hereby certify that such transfer is being effected
in accordance with the transfer restrictions set forth in the Indenture and the
Notes and pursuant to and in accordance with Rule 144A, and accordingly the
Transferor does hereby certify:
(1) the Transferee is a person that the Transferor and any person
acting on behalf of the Transferor reasonably believe is purchasing such Notes
for its own account, or for one or more accounts with respect to which the
Transferee exercises sole investment discretion, and the Transferee and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A;
C-1
(2) the Transferor and any person acting on its behalf has taken
reasonable steps to ensure that the Transferee is aware that the Transferor may
be relying on Rule 144A in connection with the transaction; and
(3) the transaction satisfies all other requirements of Rule 144A and
of any applicable securities laws of any state of the United States or any other
jurisdiction.
You and the Company are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
--------------------------------------
Name:
Title:
C-2
EXHIBIT D
---------
[FORM OF REGULATION S TRANSFER CERTIFICATE]
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of May 22, 2002,
between HEALTHSOUTH Corporation, as Issuer (the "Company"), and The Bank of Nova
Scotia Trust Company of New York, as Trustee. Capitalized terms used but not
defined herein shall have the respective meanings given to such terms in the
Indenture or Regulation S, as the case may be.
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(III) or 2.15(B)(IV):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of a beneficial interest in the Restricted Global
Note (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for a beneficial interest in the Regulation S Global Note
(CUSIP No.__________) to be held [[include the following for any transfer made
pursuant to SECTION 2.15(B)(III): with [Euroclear] [Clearstream] (Common Code
No.__________)] through the Depositary in the name of [insert name of
transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(C)(III):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of one or more Certificated Notes registered in the
name of [insert name of transferor) (the "Transferor"). The Transferor has
requested a transfer of such Certificated Notes for a beneficial interest in the
Regulation S Global Note (CUSIP No.__________) to be held [with [Euroclear]
[Clearstream]] through the Depositary in the name of [insert name of transferee]
(the "Transferee").]
In connection with such request for transfer and in respect of such
Notes, the Transferor does hereby certify that such transfer is being effected
in accordance with the transfer restrictions set forth in the Indenture and the
Notes and pursuant to and in accordance with Regulation S, and accordingly the
Transferor does hereby certify:
(1) the offer of such Notes was not made to a person in the United
States;
(2) either (A) at the time the buy order for such Notes was originated,
the Transferee was outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the Transferee was outside the
United States or (B) the transaction was executed in, or through the facilities
of, a designated offshore securities market and neither the Transferor nor any
person acting on its behalf knew that the transaction was pre-arranged with a
buyer in the United States,
D-1
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or 904(b) of the Securities
Act, as applicable, and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
[Add the following for transfers made during the Regulation S
Distribution Compliance Period:
In addition, (A) if the provisions of Rule 903(c)(3) or Rule 904(c)(1)
of the Securities Act are applicable to the transaction, the Transferor hereby
certifies that the transfer is being made in accordance with the requirements of
Rule 903(c)(3) or Rule 904(c)(1), as the case may be, and (B) upon completion of
the transaction, the Transferee will hold the transferred beneficial interest
through Euroclear or Clearstream.]
You and the Company are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
----------------------------------------
Name:
Title:
D-2
EXHIBIT E
---------
[FORM OF RULE 144 TRANSFER CERTIFICATE]
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of May 22, 2002,
between HEALTHSOUTH Corporation, as Issuer (the "Company"), and The Bank of Nova
Scotia Trust Company of New York, as Trustee. Capitalized terms used but not
defined herein shall have the respective meanings given to such terms in the
Indenture or Rule 144, as the case may be.
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(III):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of a beneficial interest in the Restricted Global
Note (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for a beneficial interest in the Regulation S Global Note
(CUSIP No.__________) to be held with the Depositary in the name of [insert name
of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(VI):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of a beneficial interest in the Restricted Global
Note (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for one or more Certificated Notes to be registered in the
name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(VII):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of a beneficial interest in the Regulation S Global
Note (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for one or more Certificated Notes to be registered in the
name of [insert name of transferee] (the "Transferee").]
In connection with such request for transfer and in respect of such
Notes, the Transferor does hereby certify that such transfer has been effected
in accordance with the transfer restrictions set forth in the Indenture and the
Notes, and that the Notes are being transferred in a transaction permitted by
Rule 144 under the Securities Act.
E-1
You and the Company are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
-----------------------------------------
Name:
Title:
E-2
EXHIBIT F
---------
[FORM OF ACCREDITED INVESTOR TRANSFER CERTIFICATE]
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of May 22, 2002
between HEALTHSOUTH Corporation, as Issuer (the "Company"), and The Bank of Nova
Scotia Trust Company of New York, as Trustee. Capitalized terms used but not
defined herein shall have the respective meanings given to such terms in the
Indenture or Regulation D, as the case may be.
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(VI):
This certificate relates to US$__________ principal amount of Notes
which are held in the form of a beneficial interest in the Restricted Global
Note (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for a beneficial interest in one or more Certificated Notes
(CUSIP No.__________) to be held with the Depositary in the name of [insert name
of transferee] (the "Transferee"].
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(B)(VII) of the Indenture:
This certificate relates to US$__________ principal amount of Notes
which are held in the form of a beneficial interest in the Regulation S Global
Note (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for one or more Certificated Notes to be registered in the
name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to
SECTION 2.15(C)(I) of the Indenture:
This certificate relates to US$__________ principal amount of Notes
which are held in the form of one or more Certificated Notes registered in the
name of [insert name of transferor] (the "Transferor"). The Transferor has
requested a transfer of such Certificated Notes for one or more Certificated
Notes to be registered in the name of [insert name of transferee] (the
"Transferee").]
The undersigned represents and warrants to you that:
(1) We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"))
F-1
purchasing for our own account or for the account of such an institutional
"accredited investor", and we are acquiring the Notes not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act or other applicable securities law and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes and invest in or purchase
securities similar to the Notes in the normal course of our business. We and any
accounts for which we are acting are each able to bear the economic risk of our
investment.
(2) We understand and acknowledge that the Notes have not been
registered under the Securities Act or any other applicable securities law and,
unless so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account for
which we are purchasing Notes to offer, sell or otherwise transfer such Notes
prior to the date which is two (2) years after the later of the date of original
issue and the last date on which the Company or any Affiliate of the Company was
the owner of such Notes (or any predecessor thereto) (such later date, the
"Resale Restriction Termination Date") only (a) to a Person we reasonably
believe 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 resale, pledge or
transfer is being made in a transaction meeting the requirements of Rule 144A
under the Securities Act, (b) in a transaction meeting the requirements of Rule
144 under the Securities Act, (c) outside the United States to a foreign person
in a transaction meeting the requirements of Rule 904 of Regulation S under the
Securities Act or (d) in accordance with another exemption from the registration
requirements of the Securities Act, provided that in the case of a transfer,
pledge or sale pursuant to this clause (d) such transfer is subject to the
receipt by the Registrar (and the Company, if it so requests) of a certification
of the transferor and an Opinion of Counsel to the effect that such transfer is
in compliance with the Securities Act, (e) to the Company or its Affiliates or
(f) pursuant to an effective registration statement under the Securities Act
and, in each case, in accordance with any applicable securities laws of any
state of the United States or any other applicable jurisdiction and the
Indenture governing the Notes. Any transfer of Notes pursuant to clause (d)
above to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2) (3) or (7) of Regulation D under the Securities Act that is
purchasing the Notes for its own account or for the account of such an
institutional "accredited investor," shall involve a minimum purchase price of
US$250,000 for such Notes, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control and in
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Notes is proposed to an institutional
"accredited investor" prior to the Resale Restriction Termination Date, the
transferor shall deliver to the Company and the Trustee a letter from the
transferee substantially in the form of this letter, which shall provide, among
other things, that the transferee is an institutional "accredited investor"
within the meaning of Rule 501 (a)(l), (2), (3) or (7) of Regulation D under the
Securities Act and that it is acquiring such Notes for investment purposes and
not for distribution in violation of the Securities Act. We acknowledge that the
Company and the Trustee reserve the right prior to any offer, sale or other
transfer of the Notes pursuant to clause (c) or (d) above prior to the Resale
Restriction Termination Date to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and the
Trustee.
F-2
(3) We are acquiring the Notes purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferee]
By:
---------------------------------------
Name:
Title: