INTEGRATED HEALTH SERVICES, INC.,
A DELAWARE CORPORATION,
AS ISSUER
TO
FIRST UNION NATIONAL BANK OF VIRGINIA
AS TRUSTEE
--------------------
INDENTURE
Dated as of May 30, 1997
------------------
$450,000,000
9 1/2% Senior Subordinated Notes due 2007
CROSS REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
31 (a)(1) ............................. 7.9
(a)(2) ............................. 7.9
(a)(3) ............................. Not Applicable
(a)(4) ............................. Not Applicable
(a)(5) ............................. 7.9
(b) ............................. 7.9
(c) ............................. Not Applicable
311(a) ............................. **
(b) ............................. **
(c) ............................. Not Applicable
312 ............................. **
313(a) ............................. **
(b)(1) ............................. Not Applicable
(b)(2) ............................. **
(c) ............................. **
(d) ............................. **
314(a) ............................. 4.3,4.4
(b) ............................. Not Applicable
(c)(1) ............................. 11.3
(c)(2) ............................. 11.3
(c)(3) ............................. Not Applicable
(d) ............................. Not Applicable
(e) ............................. 11.4
(f) ............................. Not Applicable
315(a) ............................. 7.1(2)
(b) ............................. 7.5,11.2
(c) ............................. 7.1(1)
(d) ............................. 7.1(3)
(e) ............................. 6.11
316(a)(last sentence) ............................. 2.8
(a)(1)(A) ............................. 6.5
(a)(1)(B) ............................. 6.4
(a)(2) ............................. Not Applicable
(b) ............................. 6.7
(c) ............................. 9.4
317(a)(1) ............................. 6.8
(a)(2) ............................. 6.9
(b) ............................. 2.4
318(a) ............................. 11.1
- ----------
* This Cross-Reference Table is not part of the Indenture.
** Included pursuant to Section 318(c) of the Trust Indenture Act of 1939.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.................................................... 1
Section 1.2 Other Definitions.............................................. 11
Section 1.3 Incorporation by Reference of Trust Indenture Act.............. 11
Section 1.4 Rules of Construction.......................................... 12
ARTICLE 2.
THE SECURITIES
Section 2.1 Form and Dating................................................ 12
Section 2.2 Execution and Authentication................................... 13
Section 2.3 Registrar and Paying Agent..................................... 13
Section 2.4 Paying Agent to Hold Money in Trust............................ 13
Section 2.5 Registration of Transfer and Exchange.......................... 13
Section 2.6 Replacement Securities......................................... 17
Section 2.7 Outstanding Securities......................................... 17
Section 2.8 Treasury Securities............................................ 17
Section 2.9 Temporary Securities........................................... 18
Section 2.10 Cancellation................................................... 18
Section 2.11 Defaulted Interest............................................. 18
Section 2.12 Securities Issuable in the Form of a Global Security........... 20
ARTICLE 3.
OPTIONAL REDEMPTION AND ASSET SALE OFFER
Section 3.1 Notices to Trustee............................................. 19
Section 3.2 Selection of Securities to Be Redeemed or Purchased............ 20
Section 3.3 Notices to Holders............................................. 20
Section 3.4 Effect of Notice of Redemption................................. 21
Section 3.5 Deposit of Redemption Price or Purchase Price.................. 22
Section 3.6 Securities Redeemed or Purchased in Part....................... 22
Section 3.7 Optional Redemption............................................ 22
Section 3.8 Asset Sale Offer............................................... 23
ARTICLE 4.
COVENANTS
Section 4.1 Payment of Securities.......................................... 24
Section 4.2 Maintenance of Office or Agency................................ 24
Section 4.3 SEC Reports.................................................... 24
Section 4.4 Compliance Certificate......................................... 25
Section 4.5 Corporate Existence, Taxes, etc................................ 25
Section 4.6 Stay, Extension and Usury Laws................................. 25
Section 4.7 Limitations on Restricted Payments............................. 25
Section 4.8 Limitations on Restrictions on Distributions from Subsidiaries. 26
Section 4.9 Limitations on Additional Indebtedness......................... 26
i
Section 4.10 Change in Control.............................................. 27
Section 4.11 Limitations on Asset Sales..................................... 28
Section 4.12 Limitations on Transactions with Affiliates.................... 29
Section 4.13 Limitations on Liens........................................... 29
Section 4.14 Limitations on Subsidiary Preferred Stock...................... 30
Section 4.15 Limitations on Certain Other Subordinated Indebtedness......... 30
Section 4.16 Limitations on Subsidiaries and Unrestricted Subsidiaries...... 30
ARTICLE 5.
SUCCESSORS
Section 5.1 Limitations on Mergers and Consolidations...................... 31
Section 5.2 Successor Corporation Substituted.............................. 31
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.............................................. 31
Section 6.2 Acceleration................................................... 33
Section 6.3 Other Remedies................................................. 33
Section 6.4 Waiver of Past Defaults........................................ 33
Section 6.5 Control by Majority............................................ 33
Section 6.6 Limitations on Suits........................................... 33
Section 6.7 Rights of Holders to Receive Payment........................... 34
Section 6.8 Collection Suit by Trustee..................................... 34
Section 6.9 Trustee May File Proofs of Claim............................... 34
Section 6.10 Priorities..................................................... 34
Section 6.11 Undertaking for Costs.......................................... 35
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee.............................................. 35
Section 7.2 Rights of Trustee.............................................. 36
Section 7.3 Individual Rights of Trustee................................... 36
Section 7.4 Trustee's Disclaimer........................................... 36
Section 7.5 Notice of Defaults............................................. 36
Section 7.6 Compensation and Indemnity..................................... 36
Section 7.7 Replacement of Trustee......................................... 37
Section 7.8 Successor Trustee by Merger, etc............................... 38
Section 7.9 Eligibility; Disqualification.................................. 38
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations........................... 38
Section 8.2 Application of Trust Money..................................... 40
Section 8.3 Repayment to the Company....................................... 40
Section 8.4 Reinstatement.................................................. 40
ii
ARTICLE 9.
AMENDMENTS
Section 9.1 Without Consent of Holders..................................... 40
Section 9.2 With Consent of Holders........................................ 41
Section 9.3 Compliance with Trust Indenture Act............................ 42
Section 9.4 Revocation and Effect of Consents.............................. 42
Section 9.5 Notation on or Exchange of Securities.......................... 43
Section 9.6 Trustee to Sign Amendments, etc................................ 43
ARTICLE 10.
SUBORDINATION
Section 10.1 Securities Subordinated to Senior Indebtedness................. 43
Section 10.2 Payment Over of Proceeds Upon Dissolution, Etc................. 43
Section 10.3 Prior Payment to Senior Indebtedness Upon Acceleration
of Securities................................................................ 44
Section 10.4 No Payment Upon Certain Defaults with Respect to Senior
Indebtedness................................................................. 44
Section 10.5 Payment Permitted If No Default................................ 46
Section 10.6 Subrogation to Rights of Holders of Senior Indebtedness........ 46
Section 10.7 Provisions Solely to Define Relative Rights.................... 46
Section 10.8 Application by Trustee of Monies Deposited With It............. 47
Section 10.9 Trustee to Effectuate Subordination............................ 47
Section 10.10 No Waiver of Subordination Provisions.......................... 47
Section 10.11 Notice to Trustee.............................................. 48
Section 10.12 Reliance on Judicial Order or Certificate of Liquidating Agent. 48
Section 10.13 Trustee Not Fiduciary for Holders of Senior Indebtedness....... 48
Section 10.14 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights............................................. 48
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls................................... 49
Section 11.2 Notices........................................................ 49
Section 11.3 Certificate and Opinion as to Conditions Precedent............. 49
Section 11.4 Statements Required in Certificate or Opinion.................. 50
Section 11.5 Rules by Trustee and Agents.................................... 50
Section 11.6 Legal Holidays................................................. 50
Section 11.7 No Recourse Against Others..................................... 50
Section 11.8 Governing Law.................................................. 50
Section 11.9 No Adverse Interpretation of Other Agreements.................. 50
Section 11.10 Successors..................................................... 51
Section 11.11 Severability................................................... 51
Section 11.12 Counterpart Originals.......................................... 51
Section 11.13 Trustee as Paying Agent and Registrar.......................... 51
Section 11.14 Table of Contents, Headings, etc............................... 51
SIGNATURES................................................................... 52
EXHIBIT A FORM OF RULE 144A NOTE
EXHIBIT B FORM OF EXCHANGE NOTE
EXHIBIT C TRANSFER CERTIFICATION
iii
INDENTURE dated as of May 30, 1997, between INTEGRATED HEALTH SERVICES,
INC., a Delaware corporation (the "Company"), and FIRST UNION NATIONAL BANK OF
VIRGINIA, a national banking association organized under the laws of the United
States, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Rule 144A Notes and the
Exchange Notes (each as defined below):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions
"Acquired Indebtedness" means (a) with respect to any Person (including an
Unrestricted Subsidiary) that becomes a Subsidiary of the Company after the date
hereof, Indebtedness of such Person and its Subsidiaries existing at the time
such Person becomes a Subsidiary of the Company that was not incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary of
the Company and (b) 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 that was not incurred by
such other Person in connection with, or in contemplation of, such acquisition.
Acquired Indebtedness shall be deemed to be incurred on the date such person
becomes a Subsidiary or the date of the related asset acquisition.
"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 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 or Paying Agent.
"Allowed and Disallowed Post-Commencement Interest and Expenses" means all
interest, at the rate provided in the applicable document or documents
(including any rate applicable upon any default or event of default, to the
extent lawful), and all reimbursements, costs, expenses and indemnities, to the
extent provided in the applicable document or documents, accruing or claimed at
any time after commencement of any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization, dissolution, winding up,
assignment for the benefit of creditors, marshalling of assets and liabilities
or other similar case or proceeding, whether or not such interest,
reimbursement, cost or expense is an allowed claim enforceable against the
Company in a case or proceeding under Bankruptcy Law or in any other such case
or proceeding.
"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 date hereof 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
substantially all of an operating unit or business of such Person or any of its
Subsidiaries, or (iii) any health care facility; provided, however, that the
following shall not constitute Asset Sales: (i) a transaction or series of
related transactions that results in a Change in Control, (ii) transactions
between the Company and any of its Wholly Owned Subsidiaries or among such
Wholly Owned Subsidiaries or (iii) a transaction or a series of related
transactions in which either (x) the fair market value of the asset(s) disposed
of does not exceed 2.5% of the Consolidated Tangible Assets of the Company or
(y) the Consolidated EBITDA of the company associated with the asset disposed of
does not exceed 2.5% of the Consolidated EBITDA of the Company.
"Attributable Indebtedness," when used with respect to any Sale and
Leaseback Transaction or an
operating lease with respect to a health care facility 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 semi-annual 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 such operating lease 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 Agent" means Citibank, N.A., as Administrative Agent under the Credit
Agreement or any successor Administrative Agent thereunder.
"Bank Debt" means all obligations of the Company and its Subsidiaries, now
or hereafter existing under the Credit Agreement, 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, including such obligations incurred by the Company or its
Subsidiaries in connection with any extension, refunding or refinancing of the
Credit Agreement.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors of the Company.
"Business Day" means any day other than a Legal Holiday.
"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 interests in (however designated) the equity (including,
without limitation, common stock, preferred stock and partnership and joint
venture interests) of such Person. Solely for purposes of clause (ii)(2) of
Section 4.7 hereof, "the Company's Capital Stock" shall include Capital Stock
(other than Disqualified Stock) issued by a subsidiary trust of the Company
which is not conducting business operations, provided, that the calculation
pursuant to clause (ii)(2) of Section 4.7 hereof shall not include (i) the
subsequent issuance of Capital Stock of the Company in exchange for or upon
conversion of such subsidiary trust's Capital Stock or (ii) any proceeds
received by the subsidiary trust from the sale of Capital Stock by such trust to
the Company or any Subsidiary or Affiliate of the Company, and provided further
that to the extent the subsidiary trust uses the proceeds of its sale of Capital
Stock to purchase debt securities of the Company, (i) such debt securities are
subordinated in right of payment to the Securities and (ii) distributions on the
Capital Stock of the subsidiary trust may be suspended at the option of the
Company or the subsidiary trust for a period extending up to the lesser of five
years or the maturity of the underlying debt security of the Company issued to
the subsidiary trust.
"Capitalized Lease Obligation" 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.
"Cash Equivalents" means, at any time, (i) any evidence of Indebtedness
with a maturity of 180 days or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or acceptance with a
maturity of 180 days or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500.0 million or (iii) commercial paper, maturing not
more than 180 days after the date of acquisition, issued by any corporation
(other than an Affiliate or Subsidiary of the Company) organized and existing
under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
Investor Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard and Poor's Corporation or any successor rating agency.
"Change in Control" means any of the following: (i) all or substantially
all of the Company's assets
-2-
are sold, leased, conveyed or disposed of as an entirety or substantially as an
entirety, to any Person or related "group" of Persons (other than a Permitted
Holder); (ii) stockholders of the Company shall approve any plan or proposal for
the liquidation or dissolution of the Company; (iii) 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 Common Stock
outstanding immediately prior to the effectiveness thereof are changed into or
exchanged for the same consideration) or (B) pursuant to which the Common Stock
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 Common
Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the common stock of the continuing or
surviving corporation immediately after such consolidation or merger; or (iv)
any Person, or any Persons acting together which would constitute a "group" for
purposes of Section 13(d) of the Exchange Act (other than a Permitted Holder),
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.
"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 (i) Integrated Health Services, Inc., a Delaware
corporation, and (ii) any successor of Integrated Health Services, Inc.
"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 Coverage Ratio" with respect to the Company means the ratio
of (i) Consolidated EBITDA of the Company to (ii) the aggregate amount of
Consolidated Interest Expense of the Company for the four full fiscal quarters
immediately preceding the date of the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio and for which such quarters financial
results have been reported; provided, however, that if any calculation of the
Company's Consolidated Coverage Ratio requires the use of any quarter prior to
the date of the Indenture, such calculation shall be made on a pro forma basis,
giving effect to the issuance of the Securities 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 Asset
Sale was consummated or 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 during such four quarter
period or on any later date on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio, such calculation
shall be made on a pro forma basis, giving effect to each such Asset Sale or
acquisition (including the Consolidated EBITDA relating to the hospital,
healthcare facility or other assets acquired), 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 (except that if any
calculation of the Consolidated Coverage Ratio requires the use of any quarter
prior to the acquisition of First American Health Care of Georgia, Inc. ("First
American"), then the results of operations for First American shall be reflected
in such calculation from the date of the acquisition of First American (on an
annualized basis for the four quarter period following the acquisition) and pro
forma effect shall not be given to such results of operations (but shall be
given effect to any financing, including the incurrence of Indebtedness, in
connection with such acquisition) as if it had occurred at the beginning of the
four-quarter period used to make such calculation). The calculation of the
Consolidated Coverage Ratio shall also give pro forma effect to (i) the
incurrence, repayment or retirement of any other Indebtedness, and the issuance
or redemption of any Preferred Stock, by the Company and its Subsidiaries and
(ii) the discontinuance of any operations by the Company and its Subsidiaries,
in any case occurring during such four quarter period or on any later date on or
prior to the date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio as if such Indebtedness was incurred, repaid or
retired or such Preferred Stock was issued or redeemed at the beginning of such
four-quarter period. For purposes of calculating the Consolidated Coverage
Ratio, (i) the Consolidated Interest Expense attributable to interest on any
Indebtedness computed on a pro forma basis and (A) bearing a floating interest
rate shall be computed as if the average rate over the applicable period had
been the applicable rate for the entire period and (B) which was not outstanding
during the period for which the computation is being made but which bears, at
the option of the Company, a fixed or floating rate of interest, shall be
computed by applying at the option of the Company either the fixed or floating
rate and (ii) in making such calculation, the Consolidated Interest Expense of
the Company
-3-
attributable to interest on any Indebtedness under a revolving credit facility
computed on a pro forma basis shall be computed based upon the average daily
balance of such Indebtedness during the applicable period.
"Consolidated Depreciation Expense" of any Person for any period 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 (to the extent
reducing Consolidated Net Income), plus (v) all other 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 income or profits were included in computing
Consolidated Net Income of such Person for such period.
"Consolidated Interest Expense" of any Person for any period means the
Interest Expense of such Person and its Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP, plus any dividends accrued for
such period on any Preferred Stock of any Subsidiary not held by the Company or
any Wholly Owned Subsidiary of the Company.
"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, without giving effect to dividends
on any series of preferred stock of any Subsidiary of such Person, whether or
not in cash, to the extent such consolidated net income was reduced thereby;
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 Subsidiaries in the form of dividends or similar distributions during
such period; (ii) except to the extent includible in the consolidated net income
of the referent Person pursuant to the foregoing clause (i), the net income (or
loss) of any Person that accrued 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 or loss, 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 loss, together with any related
provision for taxes on any such extraordinary gain or loss, realized by the
referent Person or any of its Subsidiaries during such period; (vi) any unusual
or nonrecurring non-cash charge which is not, under generally accepted
accounting principles, an extraordinary item; and (vii) 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 date of this Indenture) on a consolidated basis at such date,
as determined in accordance with GAAP, less all write-ups (other than write-ups
in connection with acquisitions) subsequent to the date of this Indenture in the
book value of any asset owned by such Person or any of its Subsidiaries.
"Consolidated Tangible Assets" of any Person as of any date means the total
assets of such Person
-4-
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 (other than write-ups in
connection with acquisitions) subsequent to the date of this Indenture in the
book value of any asset (except any such intangible assets) owned by such Person
or any of its Subsidiaries.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.2 or such other address as the Trustee may give
notice to the Company.
"Credit Agreement" means the Revolving Credit Agreement, dated May 15,
1996, among the Company, the Bank Agent, and the other financial institutions
signatory thereto, together with the related documents thereto, including,
without limitation, any security documents and all exhibits and schedules
thereto, and any agreement or agreements relating to any extension, refunding,
refinancing, successor or replacement facility, whether or not with the same
lenders, 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.
"Credit Facility" means the Credit Agreement and one or more borrowing
arrangements to be entered into by and between the Company and/or one or more of
its Subsidiaries and a commercial bank or other institutional lender, including
any related notes, security documentation, guarantees, collateral documents,
instruments and agreements executed in connection therewith, in each case as
amended, modified, supplemented, restructured, renewed, restated, refunded,
replaced or refinanced or extended from time to time on one or more occasions.
"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.
"Definitive Securities" means any Securities other than a Global Security.
"Depositary" means, with respect to Securities issuable or issued in whole
or in part in global form hereunder, unless otherwise specified by the Company
pursuant to Section 2.12, The Depository Trust Company, New York, New York, or
any successor thereto registered as a clearing agency under the Exchange Act or
other applicable statute or regulation.
"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
final maturity date of the Securities for cash or debt securities at any time
prior to any such final maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such final maturity.
"Eligible Investments" of any Person means Investments of such Person in
(i) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof and backed by the full faith and credit of the
United States maturing not more than one year from the date of acquisition; (ii)
certificates of deposit, time deposits, Eurodollar time deposits, bankers'
acceptances or deposit accounts having in each case a remaining term to maturity
of not more than one year, which are either (a) fully insured by the Federal
Deposit Insurance Corporation or (b) issued by any lender or by any commercial
bank under the laws of any State or any national banking association that has
combined capital and surplus of not less than $500,000,000 and whose short-term
securities are rated at least A-1 by S&P or P-1 by Moody's; (iii) commercial
paper that is rated at least A-1 by S&P or P-1 by Moody's, issued by a company
that is incorporated under the laws of the United States or of any State and
directly issues its own commercial paper, and has a remaining term to maturity
of not more than one year; (iv) a repurchase agreement with (A) any commercial
bank that is organized under the laws of any State or any national banking
association and that has total assets of at least $500,000,000, or (B) any
investment bank that is organized under the laws of any state and that has total
assets of at least $500,000,000, which agreement is secured by any one or more
of the securities and obligations described in clauses (i), (ii) or (iii) of
this definition of Eligible Investments, which shall have a market value
(exclusive of accrued interest and valued at least monthly) at least equal to
the principal amount of such investment; (v) any money market or other
investment fund the investments of which are limited to investments described in
clauses (i), (ii), (iii) and (iv) of this definition of Eligible Investments and
which is managed by (A) a commercial bank that is organized under the laws of
any State or any national banking association and that has total assets of at
least $500,000,000, or (B) any investment bank that is organized under the laws
of any State and that has total assets of at least $500,000,000; (vi)
obligations,
-5-
debentures, notes, bonds or other evidences of indebtedness rated at least A- by
Moody's or A3 by S&P; provided that the aggregate amount of investments by any
Person permitted under this clause (vi) shall not exceed 25% of the total amount
invested by such Person in eligible investments; (vii) investments in investment
grade auction rate and adjustable rate preferred equities for issuers whose
actual or implied senior long-term debt is rated at least A- by Moody's or A3 by
S&P; (viii) investments in investment grade fixed rate preferred equities for
issuers whose actual or implied senior long-term debt is rated at least A- by
Moody's or A3 by S&P; provided that the aggregate amount of investments by any
Person permitted under this clause (viii) shall not exceed 10% of the total
amount invested by such Person in Eligible Investments; (ix) adjustable rate
mortgage-backed securities rated at least AA by S&P or Aa by Moody's; and (x)
fixed rate mortgage-backed securities rated at least AA by S&P or Aa by Moody's,
provided that the aggregate amount of investments by any Person permitted under
this clause (x) shall not exceed 25% of the total amount invested by such Person
in Eligible Investments.
"Equity Interest" means, with respect to any Person, any and all shares or
other equivalents (however designated) of capital stock, partnership interests
or any other participation, right or other interests in the nature of an equity
interest in such Person or any option, warrant or other security convertible
into or exchangeable for the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means Notes having terms substantially identical in all
respects to the Rule 144A Notes for which they are to be exchanged in the
Exchange Offer, except that (i) the Exchange Notes will have been registered
under the Securities Act and, therefore, will not bear legends restricting the
transfer thereof, and (ii) Holders of Exchange Notes will not be entitled to
certain rights of holders of Rule 144A Notes under the Registration Rights
Agreement.
"Exchange Offer" means the offer the Company is to make pursuant to the
Registration Rights Agreement to exchange Rule 144A Notes for Exchange Notes.
"Existing Indebtedness" means all of the Indebtedness of the Company and
its Subsidiaries that is outstanding on the date hereof.
"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, as in effect from time to time.
"Global Security" means a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and pursuant to
a written order of the Company, which shall be registered in the name of the
Depositary or its nominee and which shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, all of the Securities or
any portion thereof, but not including any Securities that are no longer
outstanding, and having the same terms, including, without limitation, the same
original issue date, date or dates on which principal is due, and rate of
interest.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, by agreement to keepwell, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"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
-6-
other similar agreement or arrangement relating to interest rates or foreign
exchange rates.
"Holder" means a Person in whose name a Security is registered.
"Indebtedness" of any Person at any date means, without duplication: (i)
all Bank Debt; (ii) all other indebtedness of such Person for borrowed money
(whether or not recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof); (iii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iv) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (v) 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); (vi) all obligations of such Person to pay
the deferred and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of business; (vii)
all Capitalized Lease Obligations of such Person; (viii) all Indebtedness of
others secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; (ix) all Indebtedness of others
guaranteed by such Person to the extent of such guarantee; and (x) all
Attributable Indebtedness. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above; and in the case of clauses (iv) and (ix), the maximum
liability of such Person for any such contingent obligations at such date, and
in the case of clause (viii), the amount of the Indebtedness secured.
"Indenture" means this Indenture, as amended from time to time.
"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).
"Interest Payment Date" shall have the meaning assigned to such term in the
Securities.
"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.
"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, 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).
"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 brokerage commissions and the underwriting
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
-7-
and (ii) all non-cash consideration received by the Company or any of its
Subsidiaries from such Asset Sale upon the liquidation or conversion of such
consideration into cash.
"Officer" means the Chief Executive Officer, the Chief Financial Officer,
the Treasurer, any Assistant Treasurer, Controller, Secretary or any Vice
President of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the Company's Chief Executive Officer or Chief Financial Officer.
"Opinion of Counsel" means an opinion from legal counsel who is acceptable
to the Trustee in its sole discretion. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Payment or Distribution in Respect of the Securities" means, for purposes
of Article 10 hereof, any payment or distribution of any kind or character,
whether in cash, property or securities, on account of the payment of the
principal of and premium, if any, and interest on any of the Securities,
including, without limitation, any redemption or repurchase price paid for any
optional or mandatory redemption, Asset Sale Offer, Change in Control Repurchase
or other repurchase or retirement of the Securities or any other payment on
account of the Securities (including payments with respect to claims related to
the issuance of the Securities); provided, however, that the exchange of Rule
144A Notes for a like amount of Exchange Notes shall not constitute a Payment or
Distribution in Respect of the Securities. For purposes of this definition, the
words "cash, property or securities" shall not be deemed to include securities
of the Company as reorganized or readjusted, or securities of the Company or any
other corporation provided for by a plan of reorganization or readjustment which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in Article 10 and which
securities are not subject to maturity or mandatory prepayment prior to the
maturity of any Senior Indebtedness then outstanding.
"Permitted Holder" means Robert N. Elkins and any group (within the meaning
of Section 13(d)(3) of the Exchange Act) of which Mr. Elkins is a member; so
long as, with respect to any group, Mr. Elkins owns more than 20% of the total
voting power of all classes of Capital Stock of the acquiring entity entitled to
vote generally in the election of directors of the acquiring entity.
"Permitted Investment" means (i) capital contributions, advances or loans
to the Company by any Subsidiary, by the Company to a Wholly Owned Subsidiary or
by a Subsidiary to a Wholly Owned Subsidiary; (ii) the acquisition or holding by
the Company or any Subsidiary of receivables owing to the Company or 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 or holding by the Company or any Subsidiary of cash and Eligible
Investments; (iv) the Company and its Subsidiaries may make Investments in
Persons at least a majority of whose revenues result from healthcare related
businesses or facilities; (v) Investments acquired or retained from another
Person in connection with any sale, conveyance, transfer, lease or other
disposition of any properties or assets to such Person in accordance with the
covenant described in Section 4.11 hereof; and (vi) Investments not otherwise
permitted by clauses (i) through (v) above in an aggregate amount not exceeding
$10 million.
"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.
"Public Equity Offering" means a public offering by the Company of shares
of its common stock (however designated and whether voting or non-voting but
excluding Disqualified Stock) and any and all rights, warrants or options to
acquire such common stock pursuant to a registration statement registered under
the Securities Act.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances or
extends any Existing Indebtedness or other Indebtedness permitted to be incurred
under the Indenture (other than Existing Indebtedness under the Credit
Agreement); provided that: (i) the Refinancing Indebtedness is the obligation of
the same Person as was
-8-
obligated on the Indebtedness being refinanced and has a ranking in priority
relative to the Securities equal to or junior to that of 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 date of this Indenture).
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of May 22, 1997 by and between the Company and Smith Barney Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc, as Initial Purchasers, as such agreement
may be amended, modified or supplemented from time to time.
"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 Capital Stock or options, warrants or other rights to
acquire such Capital Stock, or any other payment or distribution made in respect
thereof, either directly or indirectly; (iii) the making of any payment of
principal, premium or interest on, or any payment on account of the purchase,
redemption, retirement, defeasance or other acquisition for value (prior to any
scheduled maturity, scheduled repayment, scheduled sinking fund payment or
scheduled interest payment date) of, Indebtedness of the Company or its
Subsidiaries which is pari passu with or subordinated in right of payment to the
Securities and has a scheduled maturity date subsequent to the maturity of the
Securities; or (iv) the making of any Investment in any Person other than a
Permitted Investment; provided, however, with respect to the Company and its
Subsidiaries, Restricted Payments shall not include (I) any payment described
(a) 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 (b) in clause (iii) above
made with the Net Proceeds from any Asset Sale remaining after completion of the
Asset Sale Offer made in connection with such Asset Sale, all as contemplated
under Section 4.11 hereof, (II) any payment described in clause (i) above made
by a Subsidiary that is not a Wholly Owned Subsidiary to all holders of Capital
Stock of such Subsidiary on a pro rata basis or (III) the purchase by the
Company of up to an aggregate of $50 million of the Company's Capital Stock
pursuant to one or more stock repurchase programs. Notwithstanding the
foregoing, the following shall not constitute Restricted Payments: (X) the
retirement, repurchase, redemption or other acquisition of Indebtedness of the
Company or any Subsidiary out of the net proceeds of a substantially concurrent
sale (other than to a Subsidiary of the Company) of new Indebtedness of the
Company; provided (a) the principal amount of such new Indebtedness does not
exceed the principal amount of Indebtedness so retired, repurchased, redeemed or
otherwise acquired (plus the amount of any premium required to be paid in
connection with such retirement, repurchase, redemption or acquisition), (b)
such Indebtedness has a ranking in priority relative to the Securities equal to
or junior to that of the Indebtedness so retired, repurchased, redeemed or
otherwise acquired, (c) such Indebtedness has a Stated Maturity for its final
scheduled principal payment later than the Stated Maturity for the final
scheduled principal payment of the Securities and (d) such Indebtedness has a
Weighted Average Life to Maturity equal to or greater than the remaining
Weighted Average Life to Maturity of the Securities; and (Y) the retirement,
repurchase, redemption or other acquisition of shares of the Company's Capital
Stock or Indebtedness of the Company or a Subsidiary of the Company 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); provided, however, that the proceeds of such a sale of Capital Stock
shall not be included in the calculation of aggregate net cash proceeds from the
issuance and sale of the Company's Capital Stock pursuant to clause (ii)(2) of
Section 4.7 hereof.
"Rule 144 A Notes" means the Company's 9 1/2% Senior Subordinated Notes due
2007, as initially issued under this Indenture.
"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
-9-
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.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Rule 144A Notes and Exchange Notes issued under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on and other amounts due on or in connection with any Indebtedness of
the Company permitted under Section 4.9 hereof (including, without limitation,
all Allowed and Disallowed Post-Commencement Interest and Expenses in respect of
such Indebtedness) and any amounts with respect to Hedging Obligations that fix
the interest rate on variable rate indebtedness otherwise permitted by this
Indenture, other than the Securities, the Company's 10 1/4% Senior Subordinated
Notes due 2006, the Company's 9-5/8% Senior Subordinated Notes due 2002, Series
A (to the extent outstanding upon completion of the tender offer being made
therefor by the Company pursuant to the Company's Offer to Purchase and Consent
Solicitation Statement dated May 1, 1997), the Company's 10 3/4% Senior
Subordinated Notes due 2004 (to the extent outstanding upon completion of the
tender offer being made therefor by the Company pursuant to the Company's Offer
to Purchase and Consent Solicitation Statement dated May 1, 1997), the Company's
5 3/4% Convertible Senior Subordinated Debentures due 2001 and the Company's 6%
Convertible Subordinated Debentures due 2003, whether outstanding on the date of
this Indenture or thereafter created, incurred or assumed, unless, in the case
of any particular Indebtedness, the instrument creating or evidencing the same
or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities; provided
that Senior Indebtedness will not include (i) any Indebtedness, liability or
obligation of the Company to (A) any of its Subsidiaries, (B) trade creditors or
(C) any person arising out of any lawsuit against the Company or any of its
Subsidiaries or any settlement thereof (other than any lawsuit or settlement
thereof respecting amounts payable with regard to Senior Indebtedness), (ii) any
redemption or other payments on Preferred Stock, (iii) any Indebtedness incurred
in violation of the provisions of this Indenture or (iv) amounts owing under
leases (other than Capitalized Lease Obligations).
"Shelf Registration Statement" means the Registration Statement with
respect to the Securities which the Company is required to file pursuant to the
Registration Rights Agreement.
"Significant Subsidiary" has the meaning ascribed to it under Regulation C
promulgated under the Securities Act of 1933, as amended.
"Stated Maturity" means, when used with respect to any security or any
installment of interest thereon, 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.
"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 a majority of the
Common Equity of such entity. Notwithstanding the foregoing, an Unrestricted
Subsidiary shall not be deemed a Subsidiary of the Company other than for
purposes of the definition of Unrestricted Subsidiary, unless the Company shall
have designated such Unrestricted Subsidiary as a "Subsidiary" by written notice
to the Trustee. An Unrestricted Subsidiary may be designated as a Subsidiary at
any time by the Company by written notice to the Trustee; provided, however,
that (i) no Default or Event of Default shall have occurred and be continuing or
would arise therefrom and (ii) if such Unrestricted Subsidiary is an obligor of
any Indebtedness, any such designation shall be deemed to be an incurrence as of
the date of such designation by the Company of such Indebtedness and immediately
after giving effect to such designation, the Company could incur $1.00 of
additional Indebtedness pursuant to clause (a) of Section 4.9 hereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. ss.ss.
77aaa-77bbbb), as in effect on the date hereof (unless otherwise specifically
provided herein).
"Transfer Restricted Securities" means Securities that bear or are required
to bear the legend set forth
-10-
in Section 2.5 hereof.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"U.S. Government Obligations" means direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged.
"Unrestricted Subsidiary" means any Subsidiary of the Company which shall
have been designated as an Unrestricted Subsidiary in accordance with the
Indenture. An Unrestricted Subsidiary may be designated as a Subsidiary at a
later date in the manner provided in the definition of "Subsidiary" above.
"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 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 directors' 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 1.2 Other Definitions
Defined
Term in Section
- ---- ----------
"Affiliate Transaction"........................................... 4.12
"Asset Sale Offer"................................................ 4.11
"Asset Sale Offer Period"......................................... 3.8
"Custodian"....................................................... 6.1
"Change in Control Repurchase".................................... 4.10
"Event of Default"................................................ 6.1
"incur"........................................................... 4.9(a)
"Legal Holiday"................................................... 11.6
"Payment Blockage Period"......................................... 10.4
"Paying Agent".................................................... 2.3
"Payment Account"................................................. 4.1
"Registrar"....................................................... 2.3
"Repurchase Date"................................................. 4.10
"Successor"....................................................... 5.1
Section 1.3 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
All terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.
-11-
Section 1.4 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(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;
(5) provisions apply to successive events and transactions;
(6) any amount may be negative; and
(7) "herein", "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or
Subdivision.
ARTICLE 2.
THE SECURITIES
Section 2.1 Form and Dating
The Rule 144A Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A. Subject to Section 2.6, the Rule 144A
Notes shall be in an aggregate principal amount no greater than $450,000,000;
provided, that if Exchange Notes are issued hereunder pursuant to the Exchange
Offer, the aggregate maximum principal amount of Rule 144A Notes shall be
reduced by the principal amount of Exchange Notes so issued. The Exchange Notes,
when and if issued, and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit B. Subject to Section 2.6, the Exchange
Notes shall be in an aggregate principal amount no greater than $450,000,000
less the principal amount of Rule 144A Notes not exchanged for the Exchange
Notes in the Exchange Offer. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication. The Securities shall be in
denominations of $1,000 and integral multiples thereof.
The Securities may be initially issued either in the form of a Global
Security or Securities or in the form of Definitive Securities or both. A Global
Security shall represent such of the outstanding Securities as shall be
specified therein and shall provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee or an Agent thereof, at the direction of the
Trustee, in accordance with written instructions given by the Holder thereof.
Definitive Securities shall be printed, lithographed or engraved or produced by
any combination of these methods on steel engraved borders or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
The terms and provisions contained in the Securities shall constitute, and
are hereby expressly made, a part of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
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Section 2.2 Execution and Authentication
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities
and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security nevertheless shall be
valid.
A Security shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities, upon a
written order of the Company signed by two Officers. The aggregate principal
amount of Securities outstanding at any time may not exceed such amount except
as provided in Section 2.6.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
Section 2.3 Registrar and Paying Agent
The Company shall maintain or cause to be maintained through the Trustee or
such other Person as may be appointed hereunder an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture, such notification
to be delivered, together with a certificate of such Agent that it agrees to
perform its duties in accordance with the procedures established by the Trustee
and with the terms of this Indenture, to the Trustee prior to the date such
Agent assumes its duties hereunder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
Section 2.4 Paying Agent to Hold Money in Trust
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of the
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or premium, if any, or interest on the Securities, and will notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent.
Section 2.5 Registration of Transfer and Exchange
(a) With respect to the transfer and exchange of Definitive Securities:
when Definitive Securities are presented to the Trustee with the request (x) to
register the transfer of the Definitive Securities or (y) to exchange such
Definitive Securities for an equal principal amount of Definitive Securities of
other authorized denominations, the Trustee shall register the transfer or make
the exchange as requested if its requirements for such transactions are met;
provided, however, that the Definitive Securities presented or surrendered for
register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form
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satisfactory to the Trustee duly executed by the Holder thereof or by its
attorney, duly authorized in writing; and
(ii) shall, in the case of Transfer Restricted Securities that are
Definitive Securities, except if exchanged for an Exchange Note in the
Exchange Offer, be accompanied by the following additional information and
documents, as applicable
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
substantially the form of Exhibit C hereto); or
(B) if such Transfer Restricted Security is being transferred to
a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in reliance on Rule 144A under the Securities Act or
pursuant to an exemption from registration in accordance with Rule 144
under the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit C hereto); or
(C) if such Transfer Restricted Security is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit C hereto) and an opinion of counsel reasonably
acceptable to the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(b) The following restrictions apply to any transfer of a Definitive
Security for a beneficial interest in a Global Security. A Definitive Security
may not be exchanged for a beneficial interest in a Global Security except until
and upon satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted Security and
such transfer is not being made in connection with the Exchange Offer,
certification, substantially in the form of Exhibit C hereto, that such
Definitive Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer Restricted
Security, written instructions directing the Trustee to make an endorsement
on the Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security,
then the Trustee shall cancel such Definitive Security and cause, in accordance
with the standing instructions and procedures existing between it and the
Depositary, the aggregate principal amount of Securities represented by the
Global Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and, upon receipt of a written
authentication order in the form of an Officers' Certificate, the Trustee shall
authenticate a new Global Security in the appropriate principal amount.
(c) The transfer and exchange of Global Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.
(d) With respect to the transfer of a beneficial interest in a Global
Security for a Definitive Security:
(i) Any person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Definitive Security.
Upon receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary or its nominee on behalf of
any person having a beneficial interest in a Global Security constituting a
Transfer
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Restricted Security only, except if exchanged for an Exchange Note in the
Exchange Offer, the following additional information and documents (all of
which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
person designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially the
form of Exhibit C hereto); or ---------
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance with Rule
144 under the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that effect
from the transferor (in substantially the form of Exhibit C hereto);
or
(C) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferee or
transferor (in substantially the form of Exhibit C hereto) and an
opinion of counsel from the transferee or transferor reasonably
acceptable to the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act,
then the Trustee will cause, in accordance with the standing instructions and
procedures existing between it and the Depositary, the aggregate principal
amount of the Global Security to be reduced and, following such reduction, the
Company will execute and, upon receipt of a written authentication order in the
form of an Officers' Certificate, the Trustee will authenticate and deliver to
the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.5 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall in writing instruct the Trustee. The
Trustee shall deliver such Definitive Securities to the persons in whose
name such Securities are so registered.
(e) Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.5), a Global Security
may not be transferred as a whole except 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 or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) The following relates to the authentication of Definitive Securities in
the absence of the Depositary. If at any time: (i) the Depositary for the
Securities notifies the Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Securities and a successor Depositary for
the Global Securities is not appointed by the Company within 90 days after
delivery of such notice; or (ii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of Definitive
Securities under this Indenture, then the Company will execute, and the Trustee,
upon receipt of a written order in the form of an Officers' Certificate
requesting the authentication and delivery of Definitive Securities, will
authenticate and deliver Definitive Securities, in an aggregate principal amount
equal to the principal amount of the Global Securities, in exchange for such
Global Securities.
(g) (i) Except as otherwise agreed to by the Company, the Trustee and the
Holder thereof or as permitted by the following paragraph (ii), each Rule 144A
Note certificate evidencing the Global Securities and the Definitive Securities
(and all Securities other than Exchange Notes issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION UNDER SUCH LAWS.
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THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HERETO AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY UNLESS SUCH
OFFER, SALE OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (a)(2), (a)(3) OR
(a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND IN EACH OF THE
FOREGOING CASES SUCH OFFER, SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH
ANY APPLICABLE STATE SECURITIES LAWS, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
CONTAINED IN THE INDENTURE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN
HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE. ANY
TRANSFEREE OF THIS SECURITY SHALL BE DEEMED TO HAVE REPRESENTED EITHER (A)
THAT IT IS NOT USING THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE
CODE (THE "CODE") TO PURCHASE THIS SECURITY OR (B) THAT ITS PURCHASE AND
CONTINUED HOLDING OF THE SECURITY WILL BE COVERED BY A U.S. DEPARTMENT OF
LABOR CLASS EXEMPTION (WITH RESPECT TO PROHIBITED TRANSACTIONS UNDER
SECTION 406(a) OF ERISA).
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act (including
the Shelf Registration Statement):
(A) in the case of any Transfer Restricted Security that is
a Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth
in (i) above (such sales or transfers being subject only to the
provisions of Section 2.5(c) hereof); provided, however, that
with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Security for
a Definitive Security that does not bear a legend, which request
is made in reliance upon Rule 144 or an effective registration
statement, the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to Rule 144 or
an effective registration statement (such certification to be
substantially in the form of Exhibit C hereto.)
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(h) At such time as all beneficial interests in a Global Security have
either been exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained and cancelled
by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or cancelled, the principal amount of Securities represented by such
Global Security shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction of the
Trustee, to reflect such reduction.
(i) All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable and any other expenses (including the fees
and expenses of the Trustee) in connection therewith (other than such transfer
tax or similar governmental charge payable upon exchanges pursuant to Section
2.6 or 9.5).
Section 2.6 Replacement Securities
If any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers, shall authenticate a replacement
Security if the Trustee's requirements are met. If required by the Trustee or
the Company, an indemnity bond must be supplied by the Holder that is sufficient
in the judgment of the Trustee and the Company to protect the Company, the
Trustee, the Agent or any authenticating agent from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge for
their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
Section 2.7 Outstanding Securities
The Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.7 as not outstanding.
If a Security is replaced pursuant to Section 2.6, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section
4.1, it ceases to be outstanding and interest on it ceases to accrue as of the
date it is deemed paid. Upon a "legal defeasance" pursuant to Section 8.1(b) or
a "covenant defeasance" pursuant to Section 8.1(c), the Securities shall be
deemed to be outstanding or not outstanding as provided in the applicable
Section 8.1(b) or 8.1(c).
Except as set forth in Section 2.8, a Security does not cease to be
outstanding because the Company or an Affiliate holds the Security.
Section 2.8 Treasury Securities
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so disregarded.
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Section 2.9 Temporary Securities
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
Section 2.10 Cancellation
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation, and, upon request of
the Company, certification of their destruction shall be delivered to the
Company unless, by a written order signed by two Officers, the Company shall
direct that canceled Securities be returned to it. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.11 Defaulted Interest
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Securities. The Company, with the consent of the Trustee, shall fix each
such special record date and payment date. At least 15 days before the special
record date, the Company (or, upon written request of the Company, the Trustee,
in the name of and at the expense of the Company) shall mail to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
Section 2.12 Securities Issuable in the Form of a Global Security
(a) If the Company shall establish that the Securities are to be issued in
whole or in part in the form of one or more Global Securities, then the Company
shall execute and the Trustee or an agent thereof shall, in accordance with
Section 2.2 and the written order of the Company delivered to the Trustee or its
agent thereunder, authenticate and deliver such Global Security or Securities,
which (i) shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of the outstanding Securities to be represented by
such Global Security or Securities, or such portion thereof as the Company shall
specify in a written order of the Company signed by two Officers, (ii) shall be
registered in the name of the Depositary for such Global Security or Securities
or its nominee, (iii) shall be delivered by the Trustee or its agent to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Unless and until it is exchanged
in whole or in part for securities in definitive form, this security may not be
transferred except 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 or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary. Unless this certificate is presented by
an authorized representative of the Depositary to the Company or its agent for
registration of transfer, exchange, or payment, and any certificate issued is
registered in the name of the nominee of the Depositary or in such other name as
is requested by an authorized representative of the Depositary (and any payment
is made to the nominee of the Depositary or to such other entity as is requested
by an authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, the nominee of the Depositary, has an interest
herein."
(b) Notwithstanding any other provision of this Section 2.12 or of Section
2.5, and subject to the provisions of paragraph (c) below, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
2.5, only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security notifies the
Company that it is
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unwilling or unable to continue as Depositary for such Global Security or if at
any time the Depositary for the Securities shall no longer be eligible or in
good standing under the Exchange Act or any other applicable statute or
regulation, the Company shall appoint a successor Depositary with respect to
such Global Security. If a successor Depositary for such Global Security is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company will execute, and the
Trustee or an agent thereof, upon receipt of a written order of the Company
signed by two Officers for the authentication and delivery of individual
Definitive Securities in exchange for such Global Security, will authenticate
and deliver, individual Definitive Securities of like tenor and terms in an
aggregate principal amount equal to the principal amount of the Global Security
in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion determine
that the Securities issued in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities. In
such event the Company will execute, and the Trustee, upon receipt of a
written order of the Company signed by two Officers for the authentication
and delivery of individual Definitive Securities in exchange in whole or in
part for such Global Security, will authenticate and deliver individual
Definitive Securities of like tenor and terms in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
in exchange for such Global Security or Securities.
(iii) If specified by the Company pursuant to a written order of the
Company signed by two Officers, the Depositary for a Global Security may
surrender such Global Security in exchange in whole or in part for
individual Definitive Securities of like tenor and terms on such terms as
are acceptable to the Company and such Depositary. Thereupon the Company
shall execute, and the Trustee or an agent thereof, upon a written order of
the Company signed by two Officers, shall authenticate and deliver, without
service charge, (1) to each Person specified by such Depositary a new
Definitive Security or Securities of like tenor and terms and of any
authorized denomination as requested by such Person in an aggregate
principal amount equal to and in exchange for such Person's beneficial
interest as specified by such Depositary in the Global Security; and (2) to
such Depositary a new Global Security of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate
principal amount of Definitive Securities delivered to Holders thereof.
(iv) In any exchange provided for in (i), (ii) or (iii) of this
paragraph (c), the Company will execute and the Trustee or an agent thereof
will authenticate and deliver individual Definitive Securities in
registered form in authorized denominations. Upon the exchange of the
entire principal amount of a Global Security for individual Definitive
Securities, such Global Securities shall be cancelled by the Trustee or an
agent thereof. Except as provided in (iii) above, Definitive Securities
issued in exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct either the
Trustee or the Registrar. Such Trustee or the Registrar shall deliver such
Definitive Securities to the Persons in whose names such Securities are so
registered.
ARTICLE 3.
OPTIONAL REDEMPTION AND ASSET SALE OFFER
Section 3.1 Notices to Trustee
(a) If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 3.7, it shall furnish to the Trustee, at least
45 days but not more than 60 days before a redemption date, an Officers'
Certificate stating that the Company has exercised its option to redeem
Securities pursuant to Section 3.7 and setting forth the redemption date, the
principal amount of Securities to be redeemed and the redemption price.
(b) If the Company offers to purchase Securities pursuant to the provisions
of Section 3.8, it shall furnish to the Trustee, on or before the fifth day
preceding the commencement of an Asset Sale Offer Period, an Officers'
Certificate stating that the Company is making an Asset Sale Offer pursuant to
Section 3.8 and setting forth the Asset Sale Payment Date, the principal amount
of Securities the Company is offering to purchase and the purchase price of such
Securities, and further setting forth a statement to the effect that (a) the
Company has consummated an Asset Sale and (b) the conditions set forth in the
first sentence of Section 4.11 have been satisfied.
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Section 3.2 Selection of Securities to Be Redeemed or Purchased
(a) If less than all of the Securities are to be redeemed pursuant to
Section 3.7, the Trustee shall select the Securities to be redeemed on a pro
rata basis, by lot or in such other manner as the Trustee shall deem fair and
equitable; provided, however, that in the case of a partial redemption of
Securities made with the proceeds of a Public Equity Offering, selection of the
Securities for redemption shall be made on a pro rata basis, unless such method
is otherwise prohibited (in which case the Securities to be purchased shall be
selected by lot or in such other manner as the Trustee shall deem fair and
equitable). The particular Securities to be redeemed shall be selected, unless
otherwise provided herein, prior to the date notice of redemption is required to
be sent by the Trustee, from the outstanding Securities not previously called
for redemption.
The Trustee promptly shall notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities and portions
of them selected shall be in amounts of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption.
(b) If less than all of the Securities are to be purchased pursuant to
Section 3.8, the Trustee shall select the Securities to be purchased on a pro
rata basis, unless such method is otherwise prohibited (in which case the
Securities to be purchased shall be selected by lot or in such other manner as
the Trustee shall deem fair and equitable). The particular Securities to be
purchased shall be selected, unless otherwise provided herein, prior to the date
notice of purchase is required to be sent by the Trustee, from the outstanding
Securities tendered pursuant to the Asset Sale Offer.
The Trustee promptly shall notify the Company in writing of the Securities
selected for purchase and, in the case of any Security selected for partial
purchase, the principal amount thereof to be purchased. Securities and portions
of them selected shall be in amounts of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Securities called for purchase also
apply to portions of Securities called for purchase.
Section 3.3 Notices to Holders
(a) At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice to each Holder whose Securities are to be
redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
redemption price;
(6) that interest on Securities called for redemption ceases to accrue
on and after the redemption date (unless the Company defaults on its
obligation to repurchase Securities);
(7) the paragraph of the Securities pursuant to which the Securities
are being redeemed; and
(8) the aggregate principal amount of Securities that are being
redeemed.
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(b) If the Company determines to make an Asset Sale Offer as provided in
Section 3.8, the Company shall promptly mail a notice to each Holder.
The Notice shall state:
(1) that an Asset Sale Offer is being made pursuant to Section 3.8 and
the length of time the Asset Sale Offer will remain open;
(2) the purchase price and the Asset Sale Payment Date;
(3) the aggregate principal amount of Securities the Company is
offering to purchase;
(4) that any Security not tendered or accepted for payment will
continue to accrue interest;
(5) that any Security accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest on the Asset Sale Payment Date;
(6) that Holders electing to have a Security purchased pursuant to any
Asset Sale Offer will be required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the reverse side of the
Security completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice prior to
expiration of the Asset Sale Offer Period;
(7) that Holders will be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Asset Sale Offer Period, or such longer
period as may be required by law, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Security the Holder delivered for purchase and a statement that such Holder
is withdrawing his election to have the Security purchased;
(8) that, if the aggregate principal amount of Securities surrendered
by Holders exceeds the aggregate principal amount of Securities offered to
be purchased, the Trustee shall select the Securities to be purchased on a
pro rata basis, unless such method is otherwise prohibited (in which case
the Securities to be purchased shall be selected by lot or in such other
manner as the Trustee shall deem fair and equitable); and
(9) that Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion
of the Securities surrendered.
(c) At the Company's request, the Trustee shall give the notice required in
Section 3.3(a) or 3.3(b) in the Company's name and at its expense; provided,
however, that the Company shall deliver to the Trustee, at least 45 days prior
to the redemption date or not later than the fifth day preceding the
commencement of an Asset Sale Offer Period, as the case may be, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in Section 3.3(a) or 3.3(b).
Section 3.4 Effect of Notice of Redemption
Once notice of redemption under Section 3.7 is mailed, Securities called
for redemption become due and payable on the redemption date at the redemption
price. However, if a redemption date is on or before an Interest Payment Date
and on or after the related record date, any interest accrued and unpaid to the
redemption date shall be paid on such Interest Payment Date to the person in
whose name the Security is registered at the close of business on
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such record date and the only remaining right of the Holders of Securities
called for redemption shall be to receive the redemption price (excluding such
interest) upon surrender of such Securities to the Paying Agent.
Section 3.5 Deposit of Redemption Price or Purchase Price
One Business Day prior to the redemption date or the Asset Sale Payment
Date, as the case may be, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price or the purchase price
of, and accrued interest on, all Securities to be redeemed or purchased on that
date. The Trustee or the Paying Agent shall return to the Company any money not
required for that purpose.
If the Company complies with the preceding paragraph, interest on the
Securities or portions thereof to be redeemed or purchased (in the case of a
redemption, whether or not such Securities are presented for payment) will cease
to accrue on the applicable redemption date or Asset Sale Payment Date, as the
case may be. If any Security called for redemption shall not be so paid upon
surrender, or if any Security to be purchased shall not be so paid on the Asset
Sale Payment Date, because of the failure of the Company to comply with the
preceding paragraph, then interest will be paid on the unpaid principal from the
redemption date or the Asset Sale Payment Date, as the case may be, until such
principal is paid and on any interest not paid on such unpaid principal, in each
case, at the rate provided in the Securities and in Section 4.1.
Section 3.6 Securities Redeemed or Purchased in Part
Upon surrender of a Security that is redeemed or purchased in part, the
Company shall issue, and the Trustee shall authenticate for the Holder at the
expense of the Company, a new Security equal in principal amount to the
unredeemed portion or the portion not purchased of the Security surrendered.
Section 3.7 Optional Redemption
The Company may redeem all or any of the Securities at any time on or after
September 15, 2002, at the following redemption prices (expressed as percentages
of principal amount), plus accrued and unpaid interest to the redemption date:
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If Redeemed During
the 12-month Period Commencing Redemption Price
- ------------------------------- ----------------
September 15, 2002 104.750%
September 15, 2003 103.167%
September 15, 2004 101.583%
September 15, 2005 and thereafter 100%
Notwithstanding the foregoing, the Company may redeem in the aggregate up
to $150,000,000 principal amount of Securities at any time and from time to time
prior to September 15, 2000 at a redemption price equal to 108.500% of the
aggregate principal amount so redeemed, plus accrued interest to the redemption
date, out of the net cash proceeds of one or more Public Equity Offerings;
provided that at least $300,000,000 aggregate principal amount of Securities
originally issued remains outstanding after the occurrence of any such
redemption and that any such redemption occurs within 60 days following the
closing of any such Public Equity Offering.
Any redemption pursuant to this Section 3.7 shall be made, to the extent
applicable, in accordance with the provisions of Sections 3.1 through 3.6.
Section 3.8 Asset Sale Offer
If the Company determines to make an Asset Sale Offer, the Company shall
promptly mail (with notice to the Trustee) or shall cause the Trustee to
promptly mail (in the Company's name and at its expense) notice of an Asset Sale
Offer to each Holder of Securities as set forth in Section 3.3(b). The Asset
Sale Offer shall be deemed to have commenced on the date of such mailing and
shall terminate 30 days after its commencement unless a longer offering period
is required by law (the "Asset Sale Offer Period"). On or prior to the fifth
Business Day following the termination of the Asset Sale Offer Period (the
"Asset Sale Payment Date"), the Company shall purchase, or cause the Trustee to
purchase, and mail or deliver payment for, as selected on a pro rata basis
(unless such method is otherwise prohibited, in which case the Securities to be
purchased shall be selected by lot, with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased, or in such other manner as the
Trustee shall deem fair and equitable) from Holders tendering their Securities
pursuant to the Asset Sale Offer, the amount of Securities required to be
purchased pursuant to Section 4.11. If the Asset Sale Payment Date is on or
after an interest payment record date and on or before the related interest
payment date, any accrued interest will be paid to the person in whose name a
Security is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Securities pursuant to
the Asset Sale Offer. Any Asset Sale Offer shall be conducted in compliance with
applicable tender offer rules, including Section 14(e) of the Exchange Act and
Rule 14e-1 thereunder.
On or before any Asset Sale Payment Date, the Company, to the extent
lawful, shall (i) accept for payment, as selected on a pro rata basis (unless
such method is otherwise prohibited, in which case the Securities to be
purchased shall be selected by lot, with such adjustment as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased, or in such other manner as the
Trustee shall deem fair and equitable), Securities or portions thereof tendered
pursuant to the Asset Sale Offer, (ii) if the Company appoints a depositary or
Paying Agent, deposit with such depositary or Paying Agent money sufficient to
pay the purchase price (including all accrued interest on the purchased
Securities) of all Securities or portions thereof so accepted, (iii) deliver or
cause the depositary or Paying Agent to deliver to the Trustee Securities so
accepted and (iv) deliver an Officers' Certificate identifying the Securities or
portions thereof accepted for payment by the Company in accordance with the
terms of this Section 3.8. The depositary, the Paying Agent or the Company, as
the case may be, promptly shall mail or deliver to each tendering Holder an
amount equal to the purchase price (including all accrued interest on the
purchased Securities) of the Securities tendered by such Holder and accepted by
the Company for purchase, and the Trustee promptly shall authenticate and mail
or deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
promptly shall be mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on the Asset
Sale Payment Date.
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Other than as specifically provided in this Section 3.8, any offer to
purchase Securities pursuant to this Section 3.8 shall be made in accordance
with the other provisions of this Indenture.
ARTICLE 4.
COVENANTS
Section 4.1 Payment of Securities
The Company shall pay the principal of and premium, if any, and interest on
the Securities on the dates and in the manner provided in the Securities.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds on that date money deposited by the Company designated for and sufficient
to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the interest rate on the Securities to the extent lawful; it shall pay interest
on overdue payments of premium, if any, or installments of interest (without
regard to any applicable grace period) at the same rate to the extent lawful.
On or prior to the effective date of this Indenture, the Trustee shall
establish a segregated non-interest-bearing corporate trust account (the
"Payment Account") maintained by the Trustee for the benefit of Holders in which
all amounts paid in respect of the Securities will be held and from which the
Trustee shall make payments to the Holders in accordance with this Indenture and
the Securities. The Trustee and any Agent of the Trustee shall have exclusive
control and sole right of withdrawal with respect to the Payment Account for the
purpose of making deposits in and withdrawals from the Payment Account in
accordance with this Indenture. All monies and other property deposited or held
from time to time in the Payment Account shall be held by the Trustee in the
Payment Account for the exclusive benefit of the Holders, subject to
subordination to Senior Indebtedness in accordance with Article 10 hereof.
Section 4.2 Maintenance of Office or Agency
The Company will maintain an office or agency where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company with respect of the Securities and this Indenture
may be served pursuant to Section 2.3. The Company hereby designates the
Corporate Trust Office of the Trustee as such office or agency of the Company.
The Company also from time to time may designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and from time to time may rescind such designations. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Section 4.3 SEC Reports
(a) The Company shall remain subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act and shall continue to file with
the SEC such annual reports and such information, documents and other reports
which are specified in Sections 13 and 15(d) of the Exchange Act.
(b) The Company shall file with the Trustee and cause to be provided to the
Holders, within 15 days after it files the same with the SEC, copies of its
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company or any subsidiary of the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company shall cause any annual report furnished to its stockholders generally
and any quarterly or other financial reports furnished by it to its stockholders
generally to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Registrar.
The Company will cause to be disclosed in an Officers' Certificate accompanying
any annual report filed with the Trustee and mailed to Holders or comparable
information as of the date of the most recent financial statements in each such
report or comparable information the amount available for payments pursuant to
Section 4.7. The Trustee shall have no obligation to furnish such information to
the Holders unless instructed to do so by the Company or requested by a Holder.
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Section 4.4 Compliance Certificate
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or premium, if any, or interest, if any,
on the Securities are prohibited or, if such event has occurred, a description
of the event and what action the Company is taking or proposes to take with
respect thereto.
(b) So long as (i) not contrary to the then current recommendations of the
American Institute of Certified Public Accountants or (ii) the Company's
independent public accountants do not have in effect a policy, of general
applicability with respect to their clients, that such accountants will not
prepare statements on the subjects specified below, the year-end financial
statements delivered pursuant to Section 4.3 shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
Article 4 or 5 or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company, so long as any of the Securities are outstanding, will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default under this Indenture, an Officers' Certificate specifying
such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.
Section 4.5 Corporate Existence, Taxes, etc.
Subject to the provisions of Section 5.1, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
rights (charter and statutory), licenses and franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and the loss thereof is
not disadvantageous in any material respect to the Holders.
Section 4.6 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the Company's
obligation to pay the Securities; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
insofar as such law applies to the Securities, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power,
right or remedy herein granted to the Trustee, but will suffer and permit the
execution of every such power, right or remedy as though no such law has been
enacted.
Section 4.7 Limitations on Restricted Payments
The Company shall not, and shall not permit any of its Subsidiaries,
directly or indirectly, to 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;
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(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 May 15, 1996, exceeds the sum of (1) 50% of the Company's
Consolidated Net Income accrued during the period (taken as a single period)
commencing May 15, 1996, to and including the most recent fiscal quarter ended
immediately prior to the date of such Restricted Payment and for which financial
results have been reported (or, if such aggregate Consolidated Net Income shall
be a deficit, minus 100% of such aggregate deficit); (2) the net cash proceeds
from the issuance and sale of the Company's (a) Capital Stock that is not
Disqualified Stock, including net cash proceeds received upon the exercise of
any options or warrants to purchase shares of Capital Stock other than
Disqualified Stock (other than to a Subsidiary of the Company) and (b) debt
securities or other securities that are convertible or exercisable or
exchangeable for such Capital Stock that is not Disqualified Stock and that have
been so converted or exercised or exchanged, after May 15, 1996; (3) aggregate
net cash proceeds received by the Company after the date of the Indenture as
capital contributions to the Company; and (4) $20.0 million; or
(iii) the Company would not be able to incur an additional $1.00 of
Indebtedness under the Consolidated Coverage Ratio test in Section 4.9(a).
Notwithstanding the foregoing, the provisions of this Section 4.7 shall not
prevent the following Restricted Payments (provided, however, that such
Restricted Payments shall be included for purposes of computing the amount of
Restricted Payments previously made under clause (ii) of the preceding
paragraph): (x) the payment of any dividend within 60 days after the date of
declaration thereof if the payment thereof would have complied with the
limitations of this covenant on the date of declaration and (y) the purchase of
stock held by officers, directors or employees of the Company whose employment
or term with the Company has been terminated or who have died or become disabled
in an aggregate amount not to exceed $5.0 million in any fiscal year.
Section 4.8 Limitations on Restrictions on Distributions from Subsidiaries
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, except for encumbrances or
restrictions existing under or by reason of (a) applicable law, (b) Existing
Indebtedness, (c) any restrictions under any agreement evidencing any Acquired
Indebtedness that was permitted to be incurred pursuant to Section 4.9, 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, (d) restrictions or encumbrances replacing
those permitted by clause (b) or (c) which, taken as a whole, are not more
restrictive, (e) this Indenture, (f) any restrictions or encumbrances arising in
connection with Refinancing Indebtedness, provided that any restrictions and
encumbrances of the type described in this Section 4.8 that arise under such
Refinancing Indebtedness are not, taken as a whole, more restrictive than those
under the agreement creating or evidencing the Indebtedness being refunded or
refinanced, (g) 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, (h) 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 (i) customary restrictions in purchase money debt or leases
relating to the property covered thereby.
Section 4.9 Limitations on Additional Indebtedness
(a) After the date hereof, the Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee, extend the maturity of, or otherwise become liable with respect to
(collectively, "incur"), any Indebtedness (including, without limitation,
Acquired Indebtedness), unless after giving effect thereto, the Company's
Consolidated Coverage Ratio on the date thereof would be at least:
(i) 2.00 to 1, if such date is on or prior to March 31, 1998,
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(ii) 2.25 to 1, if such date is after March 31, 1998 and on or prior
to March 31, 1999, and
(iii) 2.50 to 1, if such date is after March 31, 1999,
in each case determined on a pro forma basis as if the incurrence of such
additional Indebtedness and the application of the net proceeds therefrom, had
occurred at the beginning of the four-quarter period used to calculate the
Company's Consolidated Coverage Ratio.
(b) Notwithstanding the foregoing: (a) the Company and its Subsidiaries may
(i) incur Indebtedness under one or more Credit Facilities not to exceed $700.0
million at any one time outstanding; (ii) incur Refinancing Indebtedness; (iii)
incur any Indebtedness of the Company to any Wholly Owned Subsidiary or of any
Subsidiary to the Company or to any Wholly Owned Subsidiary; (iv) 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; and (v) incur Capitalized Lease
Obligations of the Company and its Subsidiaries such that the aggregate
principal amount of Capitalized Lease Obligations of the Company and its
Subsidiaries then outstanding, when added to the Capitalized Lease Obligations
to be incurred, does not exceed 5% of Consolidated Tangible Assets; and (b) the
Company and its Subsidiaries may incur additional Indebtedness (including
additional Indebtedness under any Credit Facility that is designated in such
Credit Facility as incurred under this clause (b)), provided that the aggregate
principal amount of any such additional Indebtedness outstanding under this
clause (b) at any time, together with the aggregate liquidation value of any
outstanding Preferred Stock issued by a Subsidiary of the Company, does not
exceed $75.0 million.
No Subsidiary of the Company shall Guarantee any Indebtedness of the
Company (including by way of a pledge of assets) that is subordinate in right of
payment to any Senior Indebtedness unless such Subsidiary also guarantees the
Securities and waives, and will not claim or take advantage of, any rights of
reimbursement, indemnity or subrogation against the Company as a result of any
payment by such Subsidiary under its Guarantee of the Securities. If such other
Indebtedness of the Company is (1) pari passu with the Securities, such
Guarantee of such pari passu Indebtedness shall be pari passu with or expressly
subordinated to such Guarantee of the Securities, or (2) subordinated in right
of payment to the Securities, such Guarantee of such subordinated Indebtedness
shall be expressly subordinated to such Guarantee of the Securities, at least to
the extent that such subordinated Indebtedness is subordinated or junior to the
Securities. Notwithstanding the foregoing, any Guarantee of the Securities by a
Subsidiary of the Company may provide by its terms that it shall be
automatically and unconditionally released and discharged upon the release or
discharge of the Guarantee which resulted in the creation of such Guarantee of
the Securities, except a discharge or release by or as a result of payment under
such Guarantee of such other Indebtedness or if any other Guarantee of other
Indebtedness is outstanding.
Section 4.10 Change in Control
(a) Following the occurrence of any Change in Control, each Holder will
have the right, at such Holder's option, to require that the Company purchase (a
"Change in Control Repurchase"), and upon the exercise of such right, the
Company shall, subject to the provisions of Section 10.3 hereof, purchase, all
or any part of such Holder's Securities on a date (the "Repurchase Date") that
is no earlier than 30 days nor later than 60 days after the date on which the
Company gives notice of a Change in Control as provided in (b) below at a
purchase price equal to 101% of the aggregate principal amount of the
Securities, plus accrued and unpaid interest thereon, if any, to the Repurchase
Date.
(b) Within 30 days after any Change in Control, the Company (with notice to
the Trustee), or the Trustee at the Company's request, will mail or cause to be
mailed to all Holders on the date of the Change in Control a notice of the
occurrence of such Change in Control and of the Holders' rights arising as a
result thereof. Such notice, which shall govern the terms of the Change in
Control Repurchase, shall state:
(1) that a Change in Control has occurred and that such Holder has the
right to require the Company to repurchase such Holder's Securities in
cash;
(2) the Repurchase Date (which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed);
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(3) the purchase price for the repurchase;
(4) the date by which the repurchase right must be exercised; and
(5) the instructions determined by the Company, consistent with this
Section 4.10, that a Holder must follow in order to have its Securities
repurchased.
(c) To exercise a repurchase right, a Holder shall deliver to the Company
(or a depositary or Paying Agent designated by the Company for such purpose in
the notice referred to in (b) above), on or before the close of business on the
Repurchase Date, the Security or Securities with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of each
Security so delivered completed. Holders shall be entitled to withdraw their
election if the Company (or the depositary or Paying Agent designated by the
Company for the purpose of receiving such election) receives, not later than
five Business Days prior to the Repurchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security or Securities the Holder delivered for purchase and a
statement that such Holder is withdrawing its election to the have the Security
or Securities purchased.
(d) In the event a repurchase right shall be exercised in accordance with
the terms hereof, subject to Article 10, the Company shall on or promptly
following the Repurchase Date pay or cause to be paid in cash to the Holder
thereof the repurchase price of the Security or Securities as to which the
repurchase right has been exercised. In the event that the repurchase right is
exercised with respect to less than the entire principal amount of a surrendered
Security, the Company shall execute and deliver to the Trustee and the Trustee
shall authenticate for issuance in the name of the Holder a new Security or
Securities in the aggregate principal amount of the unrepurchased portion of
such surrendered security.
(e) If the Repurchase Date is on or before an Interest Payment Date and on
or after the related record date, any interest accrued and unpaid to the
Repurchase Date will be paid to the Person in whose name the Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who exercise their repurchase right pursuant
to this Section 4.10.
(f) Any Change in Control Repurchase shall be conducted in compliance with
applicable tender offer rules, including Section 14(e) of the Exchange Act and
Rule 14(e)(1) thereunder. The Change in Control Repurchase may not be modified
or conditioned by the Company in any manner.
Section 4.11 Limitations on Asset Sales
The Company shall not, and shall not permit any of its Subsidiaries to,
consummate any Asset Sale unless (i) the Company or its Subsidiaries receive
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Capital Stock included in such Asset Sale (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a board resolution) and (ii) not less than 50% of such
consideration is in the form of cash or Cash Equivalents (provided, however,
that this clause (ii) shall not be applicable to a transaction involving assets
acquired and designated as held for sale, which assets represent in aggregate
since the date of the Indenture 5% or less of the net tangible assets previously
acquired by the Company or a Subsidiary pursuant to acquisitions since the date
of the Indenture and which assets are disposed of no later than one year
following their initial acquisition). The Net Proceeds of Asset Sales shall,
within 360 days of receipt thereof, (a) be reinvested in the lines of business
of the Company or any of its Subsidiaries immediately prior to such investment;
(b) be applied to the payment of the principal of, and interest on, Senior
Indebtedness; (c) be utilized to make any Investment in any other Person
permitted under this Indenture; or (d) be applied to an offer (an "Asset Sale
Offer") to purchase outstanding Securities. In any such Asset Sale Offer, the
Company shall offer to purchase Securities on a pro rata basis (unless such
method is otherwise prohibited, in which case the Securities to be purchased
shall be selected by lot, with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1,000 or integral
multiples thereof shall be purchased, or in such other manner as the Trustee
shall deem fair and equitable), at a purchase price equal to 100% of the
aggregate principal amount of the Securities, plus accrued and unpaid interest
to the date of purchase, in the manner set forth in this Indenture. Any Asset
Sale Offer will be conducted in compliance with applicable tender offer rules,
including Section 14(e) of the Exchange Act and Rule 14e-1 thereunder. Any Net
Proceeds remaining immediately after the completion of any Asset Sale Offer may
be used by the Company or its Subsidiaries for any purpose not inconsistent with
the other provisions of this Indenture.
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Notwithstanding the provisions of the immediately preceding paragraph, the
Company and its Subsidiaries may, in the ordinary course of business (or, if
otherwise than in the ordinary course of business, upon receipt of a favorable
written opinion from an independent financial advisor of national reputation as
to the fairness from a financial point of view to the Company or such Subsidiary
of the proposed transaction), exchange all or a portion of its property,
businesses or assets for property, businesses or assets that, or Capital Stock
of a Person all or substantially all of whose assets, are of a type used in a
healthcare related business, or a combination of any such property, businesses
or assets, or Capital Stock of such a Person and cash or Cash Equivalents;
provided that (i) there shall not exist immediately prior or subsequent thereto
a Default or an Event of Default, (ii) a majority of the disinterested members
of the Board of Directors of the Company shall have approved a resolution of the
Board of Directors that such exchange is fair to the Company or such Subsidiary,
as the case may be, and (iii) any cash or Cash Equivalents received pursuant to
any such exchange shall be applied in the manner applicable to Net Proceeds of
Asset Sales as set forth pursuant to the provisions of the immediately preceding
paragraph; and provided, further, that any Capital Stock of a Person received in
such an exchange pursuant to this paragraph shall be owned directly by the
Company or a Subsidiary of the Company and, when combined with the Capital Stock
of such person already owned by the Company and its Subsidiaries, shall result
in such Person becoming a Wholly Owned Subsidiary of the Company.
Section 4.12 Limitations on Transactions with Affiliates
Neither the Company nor any of its Subsidiaries shall 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 (each an "Affiliate Transaction") unless (i)
such Affiliate Transactions are between or among the Company and its
Subsidiaries; (ii) such Affiliate Transactions are in the ordinary course of
business and consistent with past practice; or (iii) the terms of such Affiliate
Transactions 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. In the
event of any transaction or series of transactions occurring subsequent to the
date of this Indenture with an Affiliate of the Company which is not permitted
under clauses (i) or (ii) above and involves in excess of $5.0 million, the
terms of such transaction shall be in writing and a majority of the
disinterested members of the Board of Directors shall by resolution determine
that such business or transaction meets the criteria set forth in clause (iii)
above.
Section 4.13 Limitations on Liens
The Company shall not, and shall not permit any Subsidiary to, directly or
indirectly, create, incur or affirm any Lien of any kind securing any
Indebtedness which is pari passu or subordinate in right of payment to the
Securities (including any assumption, guarantee or other liability with respect
thereto by any Subsidiary) upon any property or assets (including any
intercompany notes) of the Company or any Subsidiary owned on the date hereof or
hereafter acquired, or any income or profits therefrom, unless the Securities
are directly secured equally and ratably with (or, in the case of subordinated
Indebtedness, prior or senior thereto, with the same relative priority as the
Securities shall have with respect to such subordinated Indebtedness) the
obligation or liability secured by such Lien except for Liens (A) securing any
Indebtedness which became Indebtedness pursuant to a transaction permitted under
Section 5.1 hereof or securing Acquired Indebtedness which, in each case, were
created prior to (and not created in connection with, or in contemplation of)
the incurrence of such pari passu Indebtedness or subordinated Indebtedness by
the Company or any Subsidiary and which Indebtedness is permitted under the
provisions of Section 5.1 hereof, (B) securing any Indebtedness incurred in
connection with any refinancing, renewal, substitutions or replacements of any
such Indebtedness described in clause (A) or (C) created in favor of the
Company; provided, however, that in the case of clauses (A) and (B), any such
Lien only extends to the assets that were subject to such Lien securing such
Indebtedness prior to the related acquisition by the Company or its
Subsidiaries.
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Section 4.14 Limitations on Subsidiary Preferred Stock
The Company shall not permit any of its Subsidiaries to issue any Preferred
Stock (other than to the Company or a Wholly Owned Subsidiary) or permit any
Person (other than the Company or a Wholly Owned Subsidiary) to own or hold any
interest in any Preferred Stock of any such Subsidiary (other than Preferred
Stock issued prior to the date of this Indenture), unless the Subsidiary would
be permitted to incur Indebtedness pursuant to the provisions of Section 4.9
hereof in the aggregate principal amount equal to the aggregate liquidation
value of such Preferred Stock.
Section 4.15 Limitations on Certain Other Subordinated Indebtedness
The Company shall not create, incur, assume or suffer to exist any
Indebtedness that is subordinate in right of payment to any Senior Indebtedness
unless such Indebtedness by its terms or the terms of the instrument creating or
evidencing such Indebtedness is subordinate in right of payment to, or ranks
pari passu with, the Securities.
Section 4.16 Limitations on Subsidiaries and Unrestricted Subsidiaries
The Company may, by written notice to the Trustee, designate any Subsidiary
(including a newly acquired or a newly formed Subsidiary) to be an Unrestricted
Subsidiary; provided, however, that (i) no Default or Event of Default shall
have occurred and be continuing or would arise therefrom, (ii) such designation,
when considered as an Investment as described in the next sentence, is at that
time permitted under the covenant described under Section 4.7 hereof and (iii)
immediately after giving effect to such designation, the Company could incur
$1.00 of additional Indebtedness pursuant to clause (a) of Section 4.9 hereof.
For purposes of Section 4.7 hereof, (i) an "Investment" shall be deemed to have
been made at the time any Subsidiary is designated as an Unrestricted Subsidiary
in an amount (proportionate to the Company's percentage Equity Interest in such
Subsidiary) equal to the net worth of such Subsidiary at the time that such
Subsidiary is designated as an Unrestricted Subsidiary; (ii) at any date the
aggregate amount of all Restricted Payments made as Investments since May 15,
1996 shall exclude and be reduced by an amount (proportionate to the Company's
percentage Equity Interest in such Subsidiary) equal to the net worth of any
Unrestricted Subsidiary from and after the date that such Unrestricted
Subsidiary is designated a Subsidiary, not to exceed, in the case of any such
redesignation of an Unrestricted Subsidiary as a Subsidiary, the amount of
Investments previously made by the Company and its Subsidiaries in such
Unrestricted Subsidiary (in the case of either clauses (i) or (ii) above, "net
worth" to be calculated based upon the fair market value of the assets of such
Subsidiary as of any such date of designation); and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer. As of the date of the original
issuance of the Securities, there shall exist no Unrestricted Subsidiaries.
Notwithstanding the foregoing, the Board of Directors of the Company may
not designate any Subsidiary of the Company to be an Unrestricted Subsidiary if,
after such designation, (a) the Company or any Subsidiary of the Company
provides credit support for, or a guarantee of, any Indebtedness or other
obligation (contingent or otherwise) of such Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness or obligation)
or is otherwise subject to recourse or obligated thereunder or therefor, (b) a
default with respect to any Indebtedness of such Subsidiary (including any right
which the holders thereof may have to take enforcement action against such
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or any Subsidiary of the Company to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity (whether or not any
such default had occurred or was continuing as of the time of such designation),
(c) such Subsidiary owns any Equity Interests in, or owns or holds any Lien on
any property of, any Subsidiary which is not a Subsidiary of the Subsidiary to
be so designated, (d) such Subsidiary has any contract, arrangement, agreement
or understanding with the Company, or any Subsidiary of the Company, whether
written or oral, other than a transaction having terms no less favorable to the
Company or such Subsidiary of the Company than those which might be obtained at
the time from persons who are not Affiliates of the Company, or (e) the Company
or any Subsidiary of the Company has any obligation to subscribe for any Equity
Interest in such Subsidiary or to maintain or preserve such Subsidiary's
financial condition or to cause such Subsidiary to achieve specified levels of
operating results.
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ARTICLE 5.
SUCCESSORS
Section 5.1 Limitations on Mergers and Consolidations
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 hereunder or under the Securities, to any Person unless:
(i) the Person formed by or surviving such consolidation or merger (if
other than the Company), or to which 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 hereunder and under the Securities;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction 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; and
(iv) the Consolidated Coverage Ratio of the Company or the Successor, as
the case may be, immediately after giving effect to such transaction, would on a
pro forma basis be such that the Company or the Successor, as the case may be,
would be entitled to incur at least $1 of additional Indebtedness under the
Consolidated Coverage Ratio test in Section 4.9(a).
The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture comply with this Indenture.
Section 5.2 Successor Corporation Substituted
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company or any
assignment of its obligations under this Indenture or the Securities in
accordance with Section 5.1, the Successor formed by such consolidation or into
or with which the Company is merged or to which such sale, lease, conveyance or
other disposition or assignment is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Successor has been named as the Company herein
and the predecessor Company, in the case of a sale, lease, conveyance or other
disposition or assignment, shall be released from all obligations under this
Indenture and the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.1 Events of Default
An "Event of Default" occurs if:
(1) the Company defaults in the payment of the principal of, or any premium
on, any Security when the same becomes due and payable, whether at Stated
Maturity, upon redemption, upon acceleration or otherwise;
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(2) the Company defaults in the payment of interest on any Security when
the same becomes due and payable and the Default continues for a period of 30
days (even if such payment is prohibited by Article 10 hereof);
(3) the Company fails to comply with any of its agreements or covenants in,
or provisions of, the Securities or this Indenture (other than a default in the
performance or breach of a covenant or agreement specifically addressed in
clause (1) or (2) of this Section) and such failure continues for the period and
after the notice specified below;
(4) any acceleration of the maturity of Indebtedness of the Company or its
Subsidiaries having in the aggregate an outstanding principal amount of at least
$10.0 million or a failure to pay such Indebtedness at its Stated Maturity;
provided that such acceleration or failure to pay is not cured within 10 days
after such acceleration or failure to pay;
(5) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries as debtor in an involuntary case,
(b) appoints a Custodian of the Company or any of its Significant
Subsidiaries or a Custodian for all or substantially all of the property of
the Company or any of its Significant Subsidiaries, or
(c) orders the liquidation of the Company or any of its Significant
Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days.
The term "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know of a Default unless it has actual
knowledge of such Default or receives written notice of such Default with
specific reference to such Default.
A Default under clause (3) is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in aggregate principal
amount of the then outstanding Securities notify the Company and the Trustee, of
the Default and the Company does not cure the Default within 45 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default."
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Section 6.2 Acceleration
If an Event of Default (other than an Event of Default with respect to the
Company specified in clause (5) or (6) of Section 6.1) occurs and is continuing,
the Trustee by written notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the then outstanding Securities by written notice
to the Company and the Trustee, may declare all Securities to be due and payable
immediately. Upon such declaration the amounts due and payable on the
Securities, as determined in the next succeeding paragraph, shall be due and
payable immediately. If an Event of Default with respect to the Company
specified in clause (5) or (6) of Section 6.1 occurs, such an amount shall ipso
facto become and be immediately due and payable without any declaration, notice
or other act on the part of the Trustee or any Holder. The Holders of a majority
in aggregate principal amount of the then outstanding Securities by written
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal of, or premium, if any, or
interest on the Securities or that resulted from a failure to comply with
Section 4.10) have been cured or waived.
In the event that the maturity of the Securities is accelerated pursuant to
this Section 6.2, 100% of the principal amount thereof and premium, if any,
shall become due and payable plus accrued interest to the date of payment plus
interest on defaulted interest to the extent provided herein.
Section 6.3 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the principal of, or premium, if any,
or interest on the Securities or to enforce the performance of any provision of
the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
Section 6.4 Waiver of Past Defaults
The Holders of a majority in aggregate principal amount of the then
outstanding Securities by notice to the Trustee may waive an existing Default or
Event of Default and its consequences, except a continuing Default or Event of
Default in the payment of the principal of, or premium, if any, or interest on
any Security or in respect of a provision under this Indenture which cannot be
modified or amended without the consent of the Holder of each Security then
outstanding. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right or remedy consequent
thereon.
Section 6.5 Control by Majority
The Holders of a majority in aggregate principal amount of the then
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may involve the
Trustee in personal liability, in each case as determined by the Trustee.
Section 6.6 Limitations on Suits
A Holder may pursue a remedy with respect to this Indenture or the
Securities only if:
(1) the Holder gives to the Trustee written notice of a continuing Event of
Default;
(2) the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
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(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee in its sole discretion against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Securities do not give the Trustee a
direction inconsistent with the request.
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 6.7 Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in the
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder.
Section 6.8 Collection Suit by Trustee
If an Event of Default specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the amount of principal of,
premium, if any, and interest remaining unpaid on the Securities, determined in
accordance with Section 6.2, and interest on overdue principal and premium, if
any, and, to the extent lawful, interest on overdue installments of interest,
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.6. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.6 out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties which the Holders of the Securities may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee (or similar official) in bankruptcy and may
be a member of the creditors' committee.
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 7.6;
Second: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and
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interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal, premium, if any, and
interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Article.
Section 6.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7 or a suit by Holders of more than 10% in principal amount of the then
outstanding Securities.
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in such exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(b) 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; however,
the Trustee shall examine the certificates and opinions to determine
whether or not, on their face, they appear to conform to the requirements
of this Indenture.
(3) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(a) this paragraph does not limit the effect of paragraph (2) of this
Section;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) 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 6.5.
(4) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (1),
(2), (3) and (5) of this Section 7.1.
(5) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory to
it against any loss, liability or expense.
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(6) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.2 Rights of Trustee
(1) Subject to Section 7.1, the Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper Person,
and the Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(3) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(5) 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 7.3 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or any of its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 7.4 Trustee's Disclaimer
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities or as to the Company's ability to pay the Securities
when and as due or perform its other obligations hereunder. It shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision
hereof. It shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee. It shall not be responsible
for any statement or recital herein or any statement in the Securities other
than its certificate of authentication.
Section 7.5 Notice of Defaults
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders a notice of the Default
or Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of the principal of, or premium, if any,
or interest on any Security or that resulted from a failure by the Company to
comply with Section 4.10, the Trustee may withhold the notice if it in good
faith determines that withholding the notice is in the interests of Holders.
Section 7.6 Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable disbursements, advances and expenses incurred by it.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
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The Company shall indemnify the Trustee, its employees, officers, directors
and agents and any predecessor Trustee hereunder against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture or in connection with
enforcing this indemnification provision, the offering and sale of the
Securities, any act of negligence or bad faith of the Company or of any of its
officers, employees, agents or licensees, except as set forth in the next
paragraph. The Trustee promptly shall notify the Company of any claim for which
it may seek indemnity. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 7.6, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of,
premium, if any, and interest on particular Securities. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.7 Replacement of Trustee
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company. The Holders of a majority in principal amount of the
then outstanding Securities may remove the Trustee by so notifying the Trustee
and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 310(b) of the TIA;
(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 Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 310 of the TIA, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided for in Section 7.6.
Notwithstanding replacement of the Trustee pursuant to this Section 7.7, the
Company's obligations under Section 7.6 shall continue for the benefit of the
retiring Trustee.
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Section 7.8 Successor Trustee by Merger, etc.
Subject to Section 7.9, if the Trustee consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee.
Section 7.9 Eligibility; Disqualification
There shall at all times be a Trustee hereunder which shall be a bank or
corporation organized and doing business under the laws of the United States of
America, any state thereof or the District of Columbia authorized under such
laws to exercise corporate trustee power, shall be subject to supervision or
examination by Federal or state (or the District of Columbia) authority and
shall have a combined capital and surplus of at least $50 million as set forth
in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIAss. 310(a)(1) and 310(a)(2). The Trustee is subject to TIAss. 310(b). If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in Section 7.7.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations
(a) This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.6 and the Trustee's and Paying Agent's
obligations under Section 8.3 shall survive) when all outstanding Securities
theretofore authenticated and issued have been delivered (other than destroyed,
lost or stolen Securities that have been replaced or paid) to the Trustee for
cancellation and the Company has paid all sums payable hereunder. In addition,
the Company may elect to have either paragraph (b) or paragraph (c) below be
applied to the outstanding Securities upon compliance with the conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "legal defeasance"). For this purpose, such legal defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of the Sections of and
matters under this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities to receive solely
from the trust fund described in paragraph (d) below and as more fully set forth
in such paragraph, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (ii) the Company's
obligations with respect to such Securities under Sections 2.5, 2.6 and 4.2,
and, with respect to the Trustee, under Section 7.6, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (iv) this Section
8.1. Subject to compliance with this Section 8.1, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article 5 and in Sections
4.3, 4.4 and 4.6 through 4.16 with respect to the outstanding Securities on and
after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"), and the Securities shall thereafter be deemed to be not
"outstanding" for the purpose 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 Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
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any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby.
(d) The following shall be the conditions to the application of either
paragraph (b) or (c) above to the outstanding Securities:
(1) the Company has irrevocably deposited in trust with the
Trustee or, at the option of the Trustee, with a trustee satisfactory
to the Trustee and the Company under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee in its sole
discretion, money or U.S. Government Obligations sufficient to pay
principal of, premium, if any, and interest on the Securities to
maturity or redemption (in the opinion of a nationally recognized
accounting firm of independent certified public accountants expressed
in a written certificate delivered to the Trustee) and to pay all other
sums payable by it hereunder; provided that (i) the trustee of the
irrevocable trust shall have been irrevocably instructed to pay such
money or the proceeds of such U.S. Government Obligations to the
Trustee and (ii) the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such U.S. Government Obligations to
the payment of said principal, premium, if any, and interest with
respect to the Securities;
(2) the Company has delivered to the Trustee an Officer's
Certificate stating that (a) all conditions precedent provided for
relating to either the legal defeasance under paragraph (b) above or
the covenant defeasance under paragraph (c) above, as the case may be,
have been complied with and (b) if any other Indebtedness of the
Company shall then be outstanding or committed, such legal defeasance
or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(4) the Trustee shall not have received notice from any holder of
Bank Debt or any holder of Senior Indebtedness in an aggregate
principal amount in excess of $20 million that such legal defeasance
or covenant defeasance would violate the provisions of the agreements
or instruments evidencing such Senior Indebtedness;
(5) such legal defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a default or event of
default under, this Indenture or any other material agreement or
instrument to which the Company is a party or by which it is bound;
(6) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel from
nationally recognized counsel acceptable to the Trustee stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, (y) there exists controlling
precedent, or (z) since the date of this Indenture, there has been a
change in the applicable Federal income tax law, in any case to the
effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such legal defeasance and will be subject to federal income
tax on the same amount and in the same manner and at the same time as
would have been the case if such legal defeasance had not occurred;
and
(7) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel from
nationally recognized counsel acceptable to the Trustee (i) to the
effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal
income tax on the same amount and in the same manner and at the same
time as would have been the case if such covenant defeasance had not
occurred or (ii) that the Company has received from, or there has been
published by, the Internal Revenue Service a ruling to the foregoing
effect.
After such irrevocable deposit made pursuant to this Section 8.1 and
satisfaction of the other conditions set forth herein, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified above.
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The Company may make an irrevocable deposit pursuant to this Section 8.1
only if at such time it is not prohibited from doing so under the provisions of
Article 10 and the Company shall have delivered to the Trustee and any Paying
Agent an Officers' Certificate to that effect.
In order to have money available on a payment date to pay the principal of,
premium, if any, or interest on the Securities, the U.S. Government Obligations
shall be payable as to principal, premium, if any, or interest on or before such
payment date in such amounts as will provide the necessary money to effect the
applicable defeasance. U.S. Government Obligations shall not be callable at the
issuer's option.
Section 8.2 Application of Trust Money
The Trustee or a trustee satisfactory to the Trustee and the Company shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.1. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of, premium, if any, and interest on the
Securities.
Section 8.3 Repayment to the Company
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company at their option
or upon written request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years after the date
upon which such payment shall have become due; provided, however, that the
Company shall have either caused notice of such payment to be mailed to each
Holder entitled thereto no less than 30 days prior to such repayment or within
such period shall have published such notice in a financial newspaper of
widespread circulation published in The City of New York. After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
Section 8.4 Reinstatement
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.1 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 Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 8.1; provided, however,
that if the Company has made any payment of premium, if any, or interest on or
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENTS
Section 9.1 Without Consent of Holders
The Company and the Trustee may amend this Indenture or the Securities or
waive any provision hereof without the consent of any Holder:
(1) to comply with Section 5.1;
(2) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities;
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(3) to comply with a provision or provisions of the TIA applicable to this
Indenture;
(4) to add to the covenants of the Company for the benefit of the Holders
or an additional Event of Default or to provide for the surrender by the
Company of any right or power conferred upon it hereunder;
(5) to secure the Securities or provide for any Guarantee by a Subsidiary;
(6) to provide for the issuance of securities identical in all material
respects to the Rule 144A Notes pursuant to the Exchange Offer; or
(7) to cure any ambiguity, correct or supplement any provision which may be
defective or inconsistent with any other provision contained in this Indenture,
or make any provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
provided that such modification or amendment does not adversely affect the
interests of the Holders.
Upon the request of the Company, accompanied by a resolution of the Board
of Directors authorizing the execution of any such supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 9.6, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into any supplemental indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise. After an amendment or waiver under this Section becomes effective,
the Company shall mail to the Holders of each Security affected thereby a notice
briefly describing the amendment 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.
Section 9.2 With Consent of Holders
Except as provided in this Section 9.2, the Company and the Trustee may
amend this Indenture or the Securities with the written consent of the Holders
of at least a majority in principal amount of the then outstanding Securities.
Upon the request of the Company, accompanied by a resolution of the Board
of Directors authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the Holders as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.6, 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 or otherwise, in which
case the Trustee may in its 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
to approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof.
The Holders of a majority in principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities. However, (a) without the
consent of each Holder affected, an amendment or waiver under this Section may
not:
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any Security;
(2) reduce the principal amount of, or premium, if any, or interest on, any
Security;
(3) change the place of payment where, or the coin or currency in which,
any Security or any premium or interest thereon is payable;
(4) impair the right of Holders to institute suit for the enforcement of
payment of the principal of and premium, if any, and interest on Securities on
or after the Stated Maturity thereof (or in
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the case of redemption, on or after the redemption date);
(5) reduce the percentage in principal amount of Securities, the consent of
whose Holders is required for any modification or amendment of the Indenture, or
the consent of whose Holders is required for any waiver of compliance with
certain provisions of this Indenture or certain Defaults or Events of Default
hereunder and their consequences provided for in this Indenture; or
(6) modify any of the provisions of Section 6.4 or clause (a) of this
sentence of this Section 9.2,
and (b) without the consent of the Holders of at least 66_% of the aggregate
principal amount of the outstanding Securities, an amendment or waiver may not:
(1) amend, change or modify the provisions of Article Three relating to the
optional redemption of Securities by the Company in accordance with Section 3.7
hereof;
(2) amend, change or modify the obligations of the Company with respect to
a Change in Control Repurchase pursuant to Section 4.10 hereof or modify any of
the provisions or definitions relating thereto; or
(3) modify or change any provision of Article 10 in a manner adverse to
Holders of the Securities; or
(4) modify any of the provisions of clause (b) of this sentence of this
Section 9.2.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of this Indenture.
Section 9.3 Compliance with Trust Indenture Act
Every amendment to this Indenture or the Securities shall comply in form
and substance with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents
Until an amendment (which includes any supplement) or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. However, any such Holder
may revoke the consent as to his or her Security or portion of a Security if the
Trustee receives written notice of revocation before the date the amendment or
waiver becomes effective. An amendment or waiver becomes effective in accordance
with its terms and thereafter binds every Holder of a Security whether
theretofore or thereafter authenticated and delivered.
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 or
waiver. If the Company elects to fix a record date for such purpose, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation, or (ii) such other date as the Company shall
designate. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.
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Section 9.5 Notation on or Exchange of Securities
The Trustee may place an appropriate notation about an amendment or waiver
on any Security thereafter authenticated. The Company in exchange for the
Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 7.1 and 7.2 shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE 10.
SUBORDINATION
Section 10.1 Securities Subordinated to Senior Indebtedness
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 10, the indebtedness
represented by the Securities and all Payments or Distributions in Respect of
the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness, whether
outstanding on the date of this Indenture or thereafter incurred.
If at any time following the payment of any amount to a holder of Senior
Indebtedness with respect to such Senior Indebtedness, such payment is rescinded
or must otherwise be returned by such holder upon the insolvency, bankruptcy,
reorganization, dissolution or liquidation of the Company or any other Person or
otherwise, and is so rescinded or returned to the party or parties making such
payment, such Senior Indebtedness shall be reinstated to the extent of such
payment and the provisions of this Article 10 shall be applicable as if such
payment were never made.
The provisions of this Article 10 are for the benefit of the holders of
Senior Indebtedness, and each Holder of the Securities, by his purchase or other
acquisition of the Securities, hereby agrees for the benefit of each holder of
Senior Indebtedness that his Securities are subject to the provisions of this
Article 10.
Section 10.2 Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding,
relative to the Company or to its creditors, as such, or to a substantial part
of its assets, or (b) any proceeding for the liquidation, dissolution or other
winding up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Indebtedness shall be entitled
to receive payment in full of all amounts due or to become due on or in respect
of all Senior Indebtedness (including, without limitation, all Allowed and
Disallowed Post-Commencement Interest and Expenses), or provision shall be made
for such payment in cash or in a manner otherwise satisfactory to the holders of
Senior Indebtedness, before the Holders of the Securities are entitled to
receive any Payment or Distribution in Respect of the Securities (other than
payments of amounts deposited prior to any such case, proceeding, dissolution or
other winding up or event in accordance with the defeasance provisions of
Article 8 hereof), and to that end the holders of Senior Indebtedness shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up or event.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
Payment or Distribution in Respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding up or event (other than
payments of amounts deposited prior to any such case, proceeding, dissolution or
other winding up or event in accordance with the defeasance provisions of
Article 8 hereof), including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securities, before all Senior
Indebtedness (including, without limitation, all Allowed and Disallowed
Post-Commencement Interest and Expenses) is paid in full or payment thereof
provided for, and, if (i) subject to Section 10.8, such fact shall, at or prior
to the time of such payment or distribution, have been made known to the
Trustee, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the holders of Senior Indebtedness or to a
representative duly appointed by any such holder or holders of Senior
Indebtedness unless otherwise required by law or court order or (ii) such fact
shall have been made known to such Holder at any time before or after such
payment, then and in such event such Holder shall forthwith pay over and deliver
such payment to the holders of Senior Indebtedness or to a representative duly
appointed by any such holder or holders of such Senior Indebtedness unless
otherwise required by law or court order, in either such case for application to
the payment of all Senior Indebtedness remaining unpaid, to the extent necessary
to pay all Senior Indebtedness (including, without limitation, all Allowed and
Disallowed Post-Commencement Interest and Expenses) in full, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an entirety
to another Person upon the terms and conditions set forth in Article 5 shall not
be deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the Person formed by such consolidation or
into which the Company is merged or which acquires by conveyance or transfer
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions set forth in Article 5.
Section 10.3 Prior Payment to Senior Indebtedness Upon Acceleration of
Securities
In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full in cash, or in a manner otherwise
satisfactory to the holders of Senior Indebtedness, of all amounts due on or in
respect of such Senior Indebtedness (including, without limitation, all Allowed
and Disallowed Post-Commencement Interest and Expenses) before the Holders of
the Securities are entitled to receive any Payment or Distribution in Respect of
the Securities (including any payment which may be payable by reason of the
payment of any other indebtedness of the Company being subordinated to the
payment of the Securities), other than payment of amounts previously deposited
in accordance with the defeasance provisions of Article 8 hereof, by or for the
account of the Company.
In the event that, notwithstanding the foregoing, the Company shall make
any Payment or Distribution in Respect of the Securities to the Trustee or the
Holder of any Security prohibited by the foregoing provisions of this Section,
then if (i) subject to Section 10.8, such fact shall, prior to the time of such
payment, have been made known to the Trustee, then and in such event the Trustee
shall forthwith pay over and deliver such payment to the holders of such Senior
Indebtedness or to a representative duly appointed by any such holder or holders
of such Senior Indebtedness or (ii) such fact shall have been made known to such
Holder at any time before or after such payment, then and in such event such
Holder shall forthwith pay over and deliver such payment to the holders of
Senior Indebtedness or to a representative duly appointed by any such holder or
holders of such Senior Indebtedness, in either such case for application to the
payment of all Senior Indebtedness then remaining unpaid (including, without
limitation, all Allowed and Disallowed Post-Commencement Interest and Expenses),
after giving effect to any concurrent payment or distribution to or for the
benefit of holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment with respect
to which Section 10.2 is applicable.
Section 10.4 No Payment Upon Certain Defaults with Respect to Senior
Indebtedness
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(a) No Payment or Distribution in Respect of the Securities (other than
payments of amounts previously deposited in accordance with the defeasance
provisions of Article 8 hereof) shall be made by or for the account of the
Company or any other Person upon its behalf upon the occurrence of any default
in the payment of principal, premium, if any, interest on or any other amount
due under or with respect to any Bank Debt or any Senior Indebtedness (other
than Bank Debt) in excess of $20 million beyond any applicable grace period,
unless and until such default is cured or waived or ceases to exist or such
Senior Indebtedness has been paid in full or provision for such payment in cash
or in a manner otherwise satisfactory to holders of Senior Indebtedness has been
made.
(b) Upon any default with respect to the financial covenants under the
Credit Agreement as specified therein, or if any payment or distribution by the
Company with respect to any Security would, immediately after giving effect
thereto, result in such default, no Payment or Distribution in Respect of the
Securities (other than payments of amounts previously deposited in accordance
with the defeasance provisions of Article 8 hereof), including any payment which
may be payable by reason of the payment of any other indebtedness being
subordinated to the payment of the Securities, shall be made by or for the
account of the Company on account of principal of or premium, if any, or
interest on the Securities or on account of the purchase, redemption or other
acquisition of the Securities for the period specified below (the "Payment
Blockage Period"). The Payment Blockage Period shall commence upon the receipt
of notice by the Company or the Trustee from the Bank Agent and shall end on the
earlier of (i) 179 days thereafter, (ii) the date on which such default with
respect to the financial covenants under the Credit Agreement is cured or waived
or ceases to exist or on which such Bank Debt is paid in full or provision for
such payment in money or money's worth has been made, (iii) the date on which
the maturity of any Indebtedness (other than Senior Indebtedness) shall have
been accelerated by virtue of such event, or (iv) the date on which such Payment
Blockage Period shall have been terminated by written notice to the Company or
the Trustee from the Bank Agent, after which any and all required payments in
respect of the Securities, including any missed payments, may resume. Only one
Payment Blockage Period may be commenced during any period of 365 consecutive
days. No default with respect to the financial covenants under the Credit
Agreement that existed or was continuing on the date of the commencement of any
Payment Blockage Period will be, or can be, made the basis for the commencement
of a second Payment Blockage Period whether or not within a period of 365
consecutive days, unless such default has been cured or waived for a period of
not less than 90 consecutive days. In no event will a Payment Blockage Period
extend beyond 179 days from the receipt by the Trustee of notice initiating such
Payment Blockage Period and there must be a 186 consecutive day period in any
365 day period during which no Payment Blockage Period is in effect.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then (i) subject to Section 10.8, if such
fact shall, at or prior to the time of such payment, have been made known to the
Trustee, then and in such event the Trustee shall forthwith pay over and deliver
such payment to the holders of Senior Indebtedness or to a representative duly
appointed by any such holder or holders of such Senior Indebtedness or (ii) such
fact shall have been made known to such Holder at any time before or after such
payment, then and in such event such Holder shall forthwith pay over and deliver
such payment to the holders of Senior Indebtedness or to a representative duly
appointed by any such holder or holders of such Senior Indebtedness.
-45-
The provisions of this Section shall not apply to any payment with respect
to which Section 10.2 is applicable.
Section 10.5 Payment Permitted If No Default
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 10.2 or under the conditions
described in Section 10.3 or Section 10.4, from making any Payment or
Distribution in Respect of the Securities, or (b) the application by the Trustee
of any money deposited with it hereunder with respect to any Payment or
Distribution in Respect of the Securities or the retention of such Payment or
Distribution in Respect of the Securities by the Holders, if, at the time of
such application by the Trustee, it had not been notified in accordance with
Section 10.8 that such payment was prohibited by the provisions of this Article
10.
Section 10.6 Subrogation to Rights of Holders of Senior Indebtedness
Subject to the payment in full in cash of all amounts due on or in respect
of Senior Indebtedness (including, without limitation, all Allowed and
Disallowed Post-Commencement Interest and Expenses, except to the extent
provided below), the Holders of the Securities shall be subrogated to the extent
of the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article 10 (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and are entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of and premium, if any, and interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article 10, and no payments
over pursuant to the provisions of this Article to the holders of Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of the Securities, be deemed to be a payment or distribution by the Company to
or on account of the Senior Indebtedness.
Notwithstanding anything to the contrary in this Section 10.6, the Holders
of the Securities hereby agree that they shall have no rights of subrogation
with respect to amounts paid to the holders of Senior Indebtedness in payment of
any interest, reimbursements, costs, expenses or indemnities that are not
allowed claims enforceable against the Company in a case or proceeding under
Bankruptcy Law.
Section 10.7 Provisions Solely to Define Relative Rights
-46-
The provisions of this Article 10 are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of and premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 10 of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder. The failure to
make a payment on account of principal of, premium, if any, or interest on, or
any other amounts then payable with respect to, the Securities by any reason of
this Article 10 shall not be construed as preventing the occurrence of an Event
of Default under Section 6.1.
Section 10.8 Application by Trustee of Monies Deposited With It
Money and U.S. Government Obligations deposited in trust with the Trustee
pursuant to Section 8.2 and in compliance with Section 8.1 shall be for the sole
benefit of the Holders and, to the extent allocated for the payment of
Securities, shall not be subject to the subordination provisions of this Article
10. Otherwise, any deposit of monies by the Company with the Trustee or any
Paying Agent (whether or not in trust) for payment on account of principal of,
premium, if any, and interest on the Securities or that otherwise constitutes a
Payment or Distribution in Respect of the Securities shall be subject to the
provisions of Sections 10.1, 10.2, 10.3 and 10.4 except that, if at least three
Business Days prior to the date on which by the terms of this Indenture any such
monies may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or the interest on any Security)
the Trustee shall not have received with respect to such monies the notice
provided for in Section 10.4(b) or 10.11, then the Trustee shall have full power
and authority to receive such monies and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it within three Business Days of such date.
This Section shall be construed solely for the benefit of the Trustee and Paying
Agent and shall not otherwise affect the rights of holders of Senior
Indebtedness.
Section 10.9 Trustee to Effectuate Subordination
Each holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
Section 10.10 No Waiver of Subordination Provisions
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
compromise, accelerate, extend or refinance Senior Indebtedness, or otherwise
amend or supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (ii) sell, exchange, release, foreclose upon or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any Person liable in any manner for the payment or collection of Senior
Indebtedness; (iv) exercise or refrain from exercising any rights against the
Company and any other Person; (v) increase or reduce the rate of interest or
amount of principal payable on any Senior Indebtedness; (vi) release or
discharge the Company, by acceptance of a deed or assignment in lieu of
foreclosure or otherwise, as to all or any portion of the Senior Indebtedness;
or (vii) release, substitute or add any one or more
-47-
guarantors or endorsers, accept additional or substituted security for payment
or performance of the Senior Indebtedness, or release or subordinate any
security therefor. No exercise, delay in exercise or failure to exercise by any
holder of any Senior Indebtedness of any right hereby given it, no dealing by
any holder of any Senior Indebtedness with the Company or any other guarantor,
endorser or other person, no change, impairment or suspension of any right or
remedy of any holder of any Senior Indebtedness, and no act or thing which but
for this provision could act as a release or exoneration of the Holders of the
Securities hereunder, shall in any way affect, decrease, diminish or impair any
of the obligations of the Holders of the Securities and the Trustee or give to
the Holders of the Securities, the Trustee or any other person or entity any
recourse or defense against any holder of any Senior Indebtedness.
Section 10.11 Notice to Trustee
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee or other
representative therefor; and, prior to the receipt of any such written notice,
the Trustee, subject to the provisions of Sections 7.1 and 7.2, shall be
entitled in all respects to assume that no such facts exist.
Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article 10, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 10, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 10.12 Reliance on Judicial Order or Certificate of Liquidating Agent
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee, subject to the provisions of Sections 7.1 and 7.2,
and the Holders of the Securities shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
10.
Section 10.13 Trustee Not Fiduciary for Holders of Senior Indebtedness
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of Securities or to the
Company or to any other Person cash, property or securities to which holders of
Senior Indebtedness shall be entitled by virtue of this Article 10 or otherwise.
Section 10.14 Rights of Trustee as Holder of Senior Indebtedness; Preservation
of Trustee's Rights
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.6.
-48-
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss. 318(c), the imposed duties shall control.
Section 11.2 Notices
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in Person or mailed by first-class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Integrated Health Services, Inc.
10065 Red Run Boulevard
Owings Mills, Maryland 21117
Attention: General Counsel
If to the Trustee:
First Union National Bank of Virginia
901 East Cary Street Second Floor
Richmond, Virginia 23219
Attn: Corporate Trust
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class mail
to the Holder's 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 is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 11.3 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 11.4) stating
-49-
that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in
Section 11.4) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been complied with.
Section 11.4 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall include:
(1) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(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, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 11.5 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 11.6 Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or the City of Richmond, Virginia are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
Section 11.7 No Recourse Against Others
A director, officer, employee or stockholder of the Company or the Trustee,
as such, shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability.
Section 11.8 Governing Law
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
Section 11.9 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
-50-
Section 11.10 Successors
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 11.11 Severability
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.12 Counterpart Originals
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.13 Trustee as Paying Agent and Registrar
The Company initially appoints the Trustee as Paying Agent and Registrar.
Section 11.14 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
[Signatures on Next Page]
-51-
SIGNATURES
Dated as of May 30, 1997
(SEAL)
INTEGRATED HEALTH SERVICES, INC.
By: /s/
-------------------------------
Name:
Title:
Attest:
/s/
- ---------------------------------
Dated as of May 30, 1997
(SEAL)
FIRST UNION NATIONAL BANK of VIRGINIA
as Trustee
By: /s/
-------------------------------
Name:
Title:
Attest:
/s/
- ---------------------------------
-52-
EXHIBIT A
LEGENDS FOR GLOBAL SECURITY:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT 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 OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER SUCH LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY UNLESS SUCH
OFFER, SALE OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH OF THE FOREGOING
CASES SUCH OFFER, SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM PROVIDED FOR IN THE INDENTURE (A COPY OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF THIS
SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE. ANY TRANSFEREE OF THIS
SECURITY SHALL BE DEEMED TO HAVE REPRESENTED EITHER (A) THAT IT IS NOT USING THE
ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE CODE
A-1
(THE "CODE") TO PURCHASE THIS SECURITY OR (B) THAT ITS PURCHASE AND CONTINUED
HOLDING OF THE SECURITY WILL BE COVERED BY A U.S. DEPARTMENT OF LABOR CLASS
EXEMPTION (WITH RESPECT TO PROHIBITED TRANSACTIONS UNDER SECTION 406(a) OF
ERISA).
LEGENDS FOR DEFINITIVE SECURITY
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER SUCH LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY UNLESS SUCH
OFFER, SALE OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH OF THE FOREGOING
CASES SUCH OFFER, SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM PROVIDED FOR IN THE INDENTURE (A COPY OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF THIS
SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE. ANY TRANSFEREE OF THIS
SECURITY SHALL BE DEEMED TO HAVE REPRESENTED EITHER (A) THAT IT IS NOT USING THE
ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE CODE (THE "CODE") TO PURCHASE
THIS SECURITY OR (B) THAT ITS PURCHASE AND CONTINUED HOLDING OF THE SECURITY
WILL BE COVERED BY A U.S. DEPARTMENT OF LABOR CLASS EXEMPTION (WITH RESPECT TO
PROHIBITED TRANSACTIONS UNDER SECTION 406(a) OF ERISA).
A-2
9 1/2% SENIOR SUBORDINATED NOTES DUE 2007
Cusip No. $
INTEGRATED HEALTH SERVICES, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars [or such greater or lesser amount as indicated on the Schedule of
Exchanges of Definitive Securities on the reverse hereof] on September 15, 2007
Interest Payment Dates: March 15 and September 15
Record Dates: February 28 and August 31
Authentication: Dated: , 1997
This is one of the Securities referred
to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK
OF VIRGINIA,
as Trustee INTEGRATED HEALTH SERVICES, INC.
By: By:
--------------------------- --------------------------------
Authorized Officer Authorized Officer
By:
--------------------------------
(SEAL)
- ----------
1 This phrase should be included only if the Security is issued on global form.
A-3
9 1/2% SENIOR SUBORDINATED NOTES DUE 2007
1. Interest. INTEGRATED HEALTH SERVICES, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
9 1/2% per annum from the date this Security is issued until maturity. The
Company will pay interest semiannually on March 15 and September 15 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date") and any Penalty Interest payable pursuant
to Section 6 of the Registration Rights Agreement on such Interest Payment Date.
Interest on the Securities will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the date of
issuance; provided, that if there is no existing Default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided, further,
that the first Interest Payment Date shall be September 15, 1997. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. In the case of a Security to
be repurchased by the Company in connection with a Change in Control Repurchase
pursuant to paragraph 6, on or after an interest payment record date and prior
to the next Interest Payment Date, the registered holder of such Security as of
such record date shall be entitled to accrued and unpaid interest to the
repurchase date, as provided in paragraph 6 below. The Holder must surrender
this Security to a Paying Agent to collect principal payments. The Company will
pay the principal of, premium, if any, and interest on the Securities in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. Such amounts will be payable (i) in respect
of Securities in book-entry form held of record by the Depository Trust Company
("DTC") or its nominee, in same day funds on or prior to the payment dates with
respect to such amounts and (ii) in respect of Securities issued in certificated
form, at the office of the Trustee, and the Securities may be presented for
registration of transfer or exchange, at the offices of the Trustee. The
Company, however, may pay such amounts in respect of the Securities issued in
certificated form by check payable in such money mailed to a Holder's registered
address.
3. Paying Agent and Registrar. Initially, FIRST UNION NATIONAL BANK OF
VIRGINIA, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. Indenture. The Company issued the Securities under an Indenture dated as
of May 30, 1997 ("Indenture") between the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ss.ss. 77aaa-77bbbb), as in effect on the date of execution of the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Securities are unsecured general obligations of the Company limited to
$450,000,000 in aggregate principal amount, plus amounts, if any, sufficient to
pay interest on outstanding Securities as set forth in Paragraph 2 hereof. The
Securities will rank pari passu with the Exchange Notes, the Company's 10 1/4%
Senior Subordinated Notes due 2006, the Company's 9 5/8% Senior Subordinated
Notes due 2002, Series A and the Company's 10 3/4% Senior Subordinated Notes due
2004.
5. Optional Redemption. The Company may redeem all or any of the Securities
at any time on or after September 15, 2002 at the following redemption prices
(expressed as percentages of principal amount), plus accrued and unpaid interest
to the redemption date:
A-4
If Redeemed During
the 12-Month Period Commencing Redemption Price
- ------------------------------ ----------------
September 15, 2002 104.750%
September 15, 2003 103.167%
September 15, 2004 101.583%
September 15, 2005 and thereafter 100%
Notwithstanding the foregoing, the Company may redeem in the aggregate up
to $150,000,000 principal amount of Securities at any time and from time to time
prior to September 15, 2000 at a redemption price equal to 108.500% of the
aggregate principal amount so redeemed, plus accrued interest to the redemption
date, out of the net cash proceeds of one or more Public Equity Offerings;
provided that at least $300,000,000 aggregate principal amount of Securities
originally issued remains outstanding after the occurrence of any such
redemption and that any such redemption occurs within 60 days following the
closing of any such Public Equity Offering.
6. Right to Require Repurchase. Following the occurrence of any Change in
Control, each Holder will have the right to require that the Company repurchase
(a "Change in Control Repurchase") such Holder's Securities at a purchase price
equal to 101% of the aggregate principal amount of the Securities, plus accrued
and unpaid interest thereon, if any, to the date of repurchase. Within 30 days
after any Change in Control, the Company or, at the Company's request, the
Trustee, shall cause to be mailed a notice to all Holders notifying such Holders
of the occurrence of such Change in Control, the Holder's rights arising as a
result thereof and the procedures to be followed by Holders wishing to exercise
such rights.
A Holder of Securities may exercise the right to require a Change in
Control Repurchase after receipt of notice of the existence of such right by
completing the form entitled "OPTION OF HOLDER TO ELECT PURCHASE" appearing on
this Security and by complying with the other procedures set forth in such
notice. Any portion of Securities with respect to which the Holder wishes to
exercise such right must be in integral multiples of $1,000.
7. Mandatory Offer to Repurchase. If the Company consummates an Asset Sale
(as such term is defined in the Indenture), the Company may, under certain
circumstances, be required to utilize a portion of the net proceeds received
from such Asset Sale to offer to purchase Securities at a purchase price equal
to 100% of the aggregate principal amount of the Securities, plus accrued
interest to the date fixed for redemption (the "Asset Sale Offer"). Holders of
Securities that are the subject of an offer to purchase will receive an Asset
Sale Offer from the Company or the Trustee. The Asset Sale Offer shall remain
open for a period of 30 days after its commencement unless a longer offering
period is required by law (the "Asset Sale Offer Period"). On or prior to the
fifth Business Day following the termination of the Asset Sale Offer Period (the
"Asset Sale Payment Date"), the Company shall purchase, or cause the Trustee to
purchase, and mail or deliver payment for the amount of Securities required to
be purchased pursuant to the Asset Sale Offer or, if less than the amount of
Securities required to be purchased pursuant to the Asset Sale Offer has been
tendered, all Securities tendered in response to the Asset Sale Offer
A Holder of Securities may tender or refrain from tendering all or any
portion of his Securities at his discretion by completing the form entitled
"OPTION OF HOLDER TO ELECT PURCHASE" appearing on this Security. Any portion of
Securities tendered must be in integral multiples of $1,000.
8. Notice of Redemption. Notice of Redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Securities held by a Holder are to be redeemed. On and
after the redemption date interest will cease to accrue on Securities or
portions thereof called for redemption (unless the Company defaults on its
obligation to repurchase Securities).
9. Subordination. The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
Indenture), and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs
A-5
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided, and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.
10. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture.
11. Persons Deemed Owners. The registered Holder of a Security may be
treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the Indenture or
the Securities may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Securities then outstanding, and
any existing default under, or compliance with any provision of, the Indenture
may be waived (other than any continuing Default or Event of Default in the
payment of interest or premium, if any, on or the principal of the Securities or
in respect of a provision under the Indenture which cannot be modified or
amended without the consent of the Holder of each Security then outstanding)
with the consent of the Holders of a majority in principal amount of the
Securities then outstanding. Without the consent of any Holder, the Company and
the Trustee may amend or supplement the Indenture or the Securities to provide
for the assumption of the Company's obligations to Holders in the case of a
merger or acquisition; to evidence and provide for the acceptance of appointment
of any successor Trustee under the Indenture; to comply with the requirements of
the Trust Indenture Act of 1939, as amended; to add to the covenants of the
Company for the benefit of the Holders or an additional Event of Default or to
provide for the surrender by the Company of any right or power conferred upon it
under the Indenture; secure the Securities or provide for any Guarantee by a
Subsidiary; to provide for the issuance of securities identical in all material
respects to the Securities pursuant to the Exchange Offer; or to cure any
ambiguity, correct or supplement any provision which may be defective or
inconsistent with any other provision in the Indenture, or make any provisions
with respect to matters or questions arising under the Indenture which shall not
be inconsistent with the provisions of the Indenture, provided that such
modification or amendment does not adversely affect the interests of the
holders.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of the Indenture.
Without the consent of each Holder affected, the Company may not, among
other things, (i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, (ii) reduce the principal amount of,
or premium, if any, or interest on, any Security, (iii) change the place of
payment where, or the coin or currency in which, any Security or any premium or
interest thereon is payable, (iv) impair the right of a Holder to institute suit
for the enforcement of payment of the principal of and premium, if any, and
interest on any Security on or after the Stated Maturity thereof (or in the case
of a redemption, on or after the redemption date) or (v) reduce the percentage
in principal amount of Securities the consent of whose Holders is required for
any modification or amendment of the Indenture, or the consent of whose Holders
is required for any waiver of compliance with certain provisions of the
Indenture or certain Defaults or Events of Default thereunder.
Without the consent of at least 66_% of the aggregate principal amount of
outstanding Securities, the Company may not (i) amend, change or modify the
provisions of Article Three of the Indenture relating to the optional redemption
of the Securities by the Company in accordance with Section 3.7 thereof, (ii)
amend, change or modify the obligations of the Company with respect to a Change
in Control Repurchase pursuant to Section 4.10 of the Indenture or modify any of
the provisions or definitions relating thereto or (iii) modify or change any
provision of the Indenture affecting the subordination or ranking of the
Securities in a manner adverse to Holders of the Securities.
13. Defaults and Remedies. Events of Default include: (i) default in
payment of principal or premium on the Securities; (ii) default in payment of
interest on the Securities for 30 days; (iii) failure by the Company for 45 days
after notice to it to comply with any of its other agreements in the Indenture
or the Securities; (iv) any acceleration of Indebtedness of the Company or its
Subsidiaries having an outstanding principal amount of $10 million
A-6
in the aggregate or a failure to pay such Indebtedness at its stated maturity if
such acceleration or failure to pay is not cured within 10 days of such
acceleration or failure to pay; and (v) certain events of bankruptcy or
insolvency. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities may declare all the Securities to be immediately due and payable for
an amount equal to 100% of the principal amount of the Securities, and premium,
if any, plus accrued interest to the date of payment, except that in the case of
an Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Securities become due and payable immediately without further action
or notice. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or interest or that resulted from the failure of
the Company to comply with its obligations with respect to Holders' rights to
require repurchase of Securities upon a Change in Control) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
14. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
15. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
16. ERISA Matters. Each Holder of Securities, by its acceptance thereof,
will be deemed to certify that (i) no part of the funds used by such Holder to
purchase the Securities constitutes assets of an employee benefit plan or (ii)
the acquisition and continued holding of the Securities will be covered by a
U.S. Department of Labor class exemption (with respect to prohibited
transactions set forth under Section 406(a) of ERISA).
17. Authentication. This Security shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (--tenants in common), TEN ENT
(--tenants by the entireties), JT TEN (--joint tenants with right of
survivorship and not as tenants in common), CUST (--Custodian), and U/G/M/A
(--Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
Integrated Health Services, Inc.
10065 Red Run Boulevard
Owings Mills, Maryland 21117
Attention: Secretary
A-7
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- ----------------------------------------------------------------
(Insert assignee's Soc. Sec. or Tax I.D. no.)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________ to transfer
this Security on the books of the Company. The agent may substitute another to
act for him.
Date: ______________
Your Signature:----------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee:____________________________
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.8 or 4.10 of the Indenture, check the appropriate box:
|_| Section 3.8 |_| Section 4.10
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 3.8 or 4.10 of the Indenture, state the amount you
elect to have purchased: $________.
Date: __________
Your Signature:____________________
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee:____________________
A-9
[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES2]
The following exchanges of a part of this Global Security for Definitive
Securities have been made.
Amount of Amount in Principal Amount of
decrease in increase in this Global Security
Principal Amount Principal Amount following such Signature of autho-
Date of of this Global of this Global decrease or (increase) rized officer of
Exchange Security Security Trustee
-------- ---------------- ---------------- ---------------------- -------------------
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
- ----------
2 This schedule should be included only if the Security is issued in global
form.
A-10
EXHIBIT B
LEGEND FOR GLOBAL SECURITY:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT 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 OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
B-1
9 1/2% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
Cusip No. $
INTEGRATED HEALTH SERVICES, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars [or such greater or lesser amount as indicated on the Schedule of
Exchanges of Definitive Securities on the reverse hereof] on 2007
Interest Payment Dates: March 15 and September 15
Record Dates: February 28 and August 31
Authentication: Dated: , 1997
This is one of the Securities referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK
OF VIRGINIA,
as Trustee INTEGRATED HEALTH SERVICES, INC.
By: By:
----------------------------- --------------------------------
Authorized Officer
By:
--------------------------------
(SEAL)
- ----------
*This phrase should be included only if the Security is issued in global
form.
B-2
9 1/2% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
1. Interest. INTEGRATED HEALTH SERVICES, INC. a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of his Security
(which has been exchanged for one of the Company's 9 1/2% Senior Subordinated
Notes due 2007 (the "Rule 144A Notes)) at 9 1/2% per annum from the date this
security is issued until maturity. The Company will pay interest semiannually on
March 15 and September 15 of each year, or if any such day is not a Business
Day, on the next succeeding Business Day (each an "Interest Payment Date").
Interest on the Securities will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the most recent
date on which interest was paid on the Rule 144A Notes or, if no interest was
paid on the Rule 144A Notes, from the date of original issuance of the Rule 144A
Notes; provided, that if there is no existing Default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided, further,
that the first Interest Payment Date shall be September 15, 1997. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. In the case of a Security to
be repurchased by the Company in connection with a Change in Control Repurchase
pursuant to paragraph 6, on or after an interest payment record date and prior
to the next Interest Payment Date, the registered holder of such Security as of
such record date shall be entitled to accrued and unpaid interest to the
repurchase date, as provided in paragraph 6 below. The Holder must surrender
this Security to a Paying Agent to collect principal payments. The Company will
pay the principal of, premium, if any, and interest on the Securities in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. Such amounts will be payable (i) in respect
of Securities in book-entry form held of record by the Depository Trust Company
("DTC") or its nominee, in same day funds on or prior to the payment dates with
respect to such amounts and (ii) in respect of Securities issued in certificated
form, at the office of the Trustee, and the Securities may be presented for
registration of transfer or exchange, at the offices of the Trustee. The
Company, however, may pay such amounts in respect of the Securities issued in
certificated form by check payable in such money mailed to a Holder's registered
address.
3. Paying Agent and Registrar. Initially, FIRST UNION NATIONAL BANK OF
VIRGINIA, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. Indenture. The Company issued the Securities under an Indenture dated as
of May 30, 1997 ("Indenture") between the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ss.ss. 77aaa-77bbbb), as in effect on the date of execution of the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Securities are unsecured general obligations of the Company limited to
$450,000,000 in aggregate principal amount, plus amounts, if any, sufficient to
pay interest on outstanding Securities as set forth in Paragraph 2 hereof. The
Securities will rank pari passu with the Rule 144A Notes, the Company's 10 1/4%
Senior Subordinated Notes due 2006, the Company's 9_% Senior Subordinated Notes
due 2002, Series A and the Company's 10 3/4% Senior Subordinated Notes due 2004.
5. Optional Redemption. The Company may redeem all or any of the Securities
at any time on or after September 15, 2002 at the following redemption prices
(expressed as percentages of principal amount), plus accrued and unpaid interest
to the redemption date:
B-3
If Redeemed During Redemption Price
the 12-month Period Commencing ----------------
- -------------------------------
September 15, 2002 104.750%
September 15, 2003 103.167%
September 15, 2004 101.583%
September 15, 2005 and thereafter 100%
Notwithstanding the foregoing, the Company may redeem in the aggregate up
to $150,000,000 principal amount of Securities at any time and from time to time
prior to September 15, 2000 at a redemption price equal to 108.500% of the
aggregate principal amount so redeemed, plus accrued interest to the redemption
date, out of the net cash proceeds of one or more Public Equity Offerings;
provided that at least $300,000,000 aggregate principal amount of Securities
originally issued remains outstanding after the occurrence of any such
redemption and that any such redemption occurs within 60 days following the
closing of any such Public Equity Offering.
6. Right to Require Repurchase. Following the occurrence of any Change in
Control, each Holder will have the right to require that the Company repurchase
(a "Change in Control Repurchase") such Holder's Securities at a purchase price
equal to 101% of the aggregate principal amount of the Securities, plus accrued
and unpaid interest thereon, if any, to the date of repurchase. Within 30 days
after any Change in Control, the Company or, at the Company's request, the
Trustee, shall cause to be mailed a notice to all Holders notifying such Holders
of the occurrence of such Change in Control, the Holder's rights arising as a
result thereof and the procedures to be followed by Holders wishing to exercise
such rights.
A Holder of Securities may exercise the right to require a Change in
Control Repurchase after receipt of notice of the existence of such right by
completing the form entitled "OPTION OF HOLDER TO ELECT PURCHASE" appearing on
this Security and by complying with the other procedures set forth in such
notice. Any portion of Securities with respect to which the Holder wishes to
exercise such right must be in integral multiples of $1,000.
7. Mandatory Offer to Repurchase. If the Company consummates an Asset Sale
(as such term is defined in the Indenture), the Company may, under certain
circumstances, be required to utilize a portion of the net proceeds received
from such Asset Sale to offer to purchase Securities at a purchase price equal
to 100% of the aggregate principal amount of the Securities, plus accrued
interest to the date fixed for redemption (the "Asset Sale Offer"). Holders of
Securities that are the subject of an offer to purchase will receive an Asset
Sale Offer from the Company or the Trustee. The Asset Sale Offer shall remain
open for a period of 30 days after its commencement unless a longer offering
period is required by law (the "Asset Sale Offer Period"). On or prior to the
fifth Business Day following the termination of the Asset Sale Offer Period (the
"Asset Sale Payment Date"), the Company shall purchase, or cause the Trustee to
purchase, and mail or deliver payment for the amount of Securities required to
be purchased pursuant to the Asset Sale Offer or, if less than the amount of
Securities required to be purchased pursuant to the Asset Sale Offer has been
tendered, all Securities tendered in response to the Asset Sale Offer
A Holder of Securities may tender or refrain from tendering all or any
portion of his Securities at his discretion by completing the form entitled
"OPTION OF HOLDER TO ELECT PURCHASE" appearing on this Security. Any portion of
Securities tendered must be in integral multiples of $1,000.
8. Notice of Redemption. Notice of Redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Securities held by a Holder are to be redeemed. On and
after the redemption date interest will cease to accrue on Securities or
portions thereof called for redemption (unless the Company defaults on its
obligation to repurchase Securities).
9. Subordination. The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
Indenture), and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each
B-4
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
10. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture.
11. Persons Deemed Owners. The registered Holder of a Security may be
treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the Indenture or
the Securities may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Securities then outstanding, and
any existing default under, or compliance with any provision of, the Indenture
may be waived (other than any continuing Default or Event of Default in the
payment of interest or premium, if any, on or the principal of the Securities or
in respect of a provision under the Indenture which cannot be modified or
amended without the consent of the Holder of each Security then outstanding)
with the consent of the Holders of a majority in principal amount of the
Securities then outstanding. Without the consent of any Holder, the Company and
the Trustee may amend or supplement the Indenture or the Securities to provide
for the assumption of the Company's obligations to Holders in the case of a
merger or acquisition; to evidence and provide for the acceptance of appointment
of any successor Trustee under the Indenture; to comply with the requirements of
the Trust Indenture Act of 1939, as amended; to add to the covenants of the
Company for the benefit of the Holders or an additional Event of Default or to
provide for the surrender by the Company of any right or power conferred upon it
under the Indenture; secure the Securities or provide for any Guarantee by a
Subsidiary; to provide for the issuance of securities identical in all material
respects to the Securities pursuant to the Exchange Offer; or to cure any
ambiguity, correct or supplement any provision which may be defective or
inconsistent with any other provision in the Indenture, or make any provisions
with respect to matters or questions arising under the Indenture which shall not
be inconsistent with the provisions of the Indenture, provided that such
modification or amendment does not adversely affect the interests of the
holders.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of the Indenture.
Without the consent of each Holder affected, the Company may not, among
other things, (i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, (ii) reduce the principal amount of,
or premium, if any, or interest on, any Security, (iii) change the place of
payment where, or the coin or currency in which, any Security or any premium or
interest thereon is payable, (iv) impair the right of a Holder to institute suit
for the enforcement of payment of the principal of and premium, if any, and
interest on any Security on or after the Stated Maturity thereof (or in the case
of a redemption, on or after the redemption date) or (v) reduce the percentage
in principal amount of Securities the consent of whose Holders is required for
any modification or amendment of the Indenture, or the consent of whose Holders
is required for any waiver of compliance with certain provisions of the
Indenture or certain Defaults or Events of Default thereunder.
Without the consent of at least 66_% of the aggregate principal amount of
outstanding Securities, the Company may not (i) amend, change or modify the
provisions of Article Three of the Indenture relating to the optional redemption
of the Securities by the Company in accordance with Section 3.7 thereof, (ii)
amend, change or modify the obligations of the Company with respect to a Change
in Control Repurchase pursuant to Section 4.10 of the Indenture or modify any of
the provisions or definitions relating thereto or (iii) modify or change any
provision of the Indenture affecting the subordination or ranking of the
Securities in a manner adverse to Holders of the Securities.
13. Defaults and Remedies. Events of Default include: (i) default in
payment of principal or premium on the Securities; (ii) default in payment of
interest on the Securities for 30 days; (iii) failure by the Company for 45 days
after notice to it to comply with any of its other agreements in the Indenture
or the Securities; (iv) any
B-5
acceleration of Indebtedness of the Company or its Subsidiaries having an
outstanding principal amount of $10 million in the aggregate or a failure to pay
such Indebtedness at its stated maturity if such acceleration or failure to pay
is not cured within 10 days of such acceleration or failure to pay; and (v)
certain events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Securities may declare all the Securities to be
immediately due and payable for an amount equal to 100% of the principal amount
of the Securities, and premium, if any, plus accrued interest to the date of
payment, except that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, all outstanding Securities become due and
payable immediately without further action or notice. Holders may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing default (except a default in payment of principal or interest or that
resulted from the failure of the Company to comply with its obligations with
respect to Holders' rights to require repurchase of Securities upon a Change in
Control) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
14. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
15. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
16. ERISA Matters. Each Holder of Securities, by its acceptance thereof,
will be deemed to certify that (i) no part of the funds used by such Holder to
purchase the Securities constitutes assets of an employee benefit plan or (ii)
the acquisition and continued holding of the Securities will be covered by a
U.S. Department of Labor class exemption (with respect to prohibited
transactions set forth under Section 406(a) of ERISA).
17. Authentication. This Security shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (--tenants in common), TEN ENT
(--tenants by the entireties), JT TEN (--joint tenants with right of
survivorship and not as tenants in common), CUST (--Custodian), and U/G/M/A
(--Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
Integrated Health Services, Inc.
10065 Red Run Boulevard
Owings Mills, Maryland 21117
Attention: Secretary
B-6
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- ----------------------------------------------------------------
(Insert assignee's Soc. Sec. or Tax I.D. no.)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________ to transfer
this Security on the books of the Company. The agent may substitute another to
act for him.
Date: ______________
Your Signature:
----------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee:____________________________
B-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.8 or 4.10 of the Indenture, check the appropriate
box:
|_| Section 3.8 |_| Section 4.10
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 3.8 or 4.10 of the Indenture, state the amount you
elect to have purchased: $
---------------.
Date: __________
Your Signature:____________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:____________________
B-8
[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES*]
The following exchanges of a part of this Global Security for Definitive
Securities have been made.
Amount of Amount of Principal Amount of
decrease in increase in this Global Security
Principal Amount Principal Amount following such Signature of autho-
Date of of this Global of this Global decrease or (increase) rized officer of
Exchange Security Security Trustee
-------- ---------------- ---------------- ---------------------- -------------------
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
- ----------
*This schedule should be included only if the Security is issued in global
form.
B-9
EXHIBIT C
[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF RULE 144A NOTES]
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 9 1/2% Senior Subordinated Notes due 2007 ("Rule 144A Notes")
This Certificate relates to $_________ Principal amount of Securities held
in *__________ book-entry or *__________ definitive form by _________________
(the "Transferor").
The Transferor*:
o has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
or
o has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such security, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above-captioned Notes and as provided in Section 2.5 of such
Indenture, the transfer of this Security does not require registration under the
Securities Act (as defined below) because*:
o Such Security is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.5(a)(ii)(A) or Section 2.5(d)(i)(A)
of the Indenture).
o Such Security is being transferred to a "qualified institutional buyer" (as
defined in rule 144A under the Securities Act of 1933, as amended (the
"Securities Act") in reliance on Rule 144A (in satisfaction of Section
2.5(a)(ii)(B), section 2.5(b)(i) or Section 2.5(d)(i)(B) of the Indenture).
o Such Security is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under
the Securities Act.
o Such Security is being transferred in reliance and in compliance with an
exemption from the registration requirements of the Securities Act, other
than Rule 144A or Rule 144 under the Securities Act. An opinion of counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate.
- ------------------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:___________________________________________________
Date:________________________
- -----------------------------
- ----------
*Check applicable box.
C-1