SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 30, 1993
CARE ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9310 95-3311961
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
2742 Dow Avenue
Tustin, California 92680-7245
(Address of principal executive offices)
Registrant's telephone number, including area code
(714) 544-4443
<PAGE>
Item 5. Other Events
On December 30, 1993, Registrant (hereinafter "Care")
entered into a Note Agreement with a number of institutional
purchasers pursuant to which it issued $30,000,000 of its
8.10% Senior Secured Notes due December 15, 2000 ("Notes").
The Notes have an average maturity of five years and provide
for interest payments on each of January 15 and July 15,
commencing January 15, 1994. Principal payments of
$6,000,000 are due annually commencing on January 15, 1997,
with the final payment due at maturity.
The Notes are in registered form and were issued
pursuant to an Indenture of Trust with State Street Bank and
Trust Company of Connecticut, National Association and are
secured by Mortgages and Deeds of Trust covering eleven
skilled nursing facilities owned in fee by Care together
with the furniture, fixtures and equipment located at such
facilities. Six of these facilities are located in
California, three in Ohio and two in West Virginia. Each of
Care's active U.S. subsidiaries guaranteed payments of the
Notes, although such Guaranty is unsecured.
Care applied approximately $18,900,000 to repay
indebtedness, including approximately $11,600,000 of Term
Notes payable to Citibank, N.A. as agent under the 1990
Amended and Restated Credit Agreement and $7,300,000 in
other debt which encumbered certain of the mortgaged
facilities. In addition approximately $1,100,000 was used
to pay costs and expenses of the issuance of the Notes,
approximately $800,000 was used to establish cash
escrows with a title company pending the resolution of
certain title and debt pay off related issues,
and approximately $500,000 was used to exercise an option
to purchase one of the mortgaged facilities.
Of the $8,700,000 proceeds to Care, $6,238,000 was
placed with Wells Fargo Bank to collateralize letters of
credit issued in connection with Care's self-insured
workers compensation programs.
Care is presently negotiating with a bank for a letter
of credit facility which will result in the release to Care
of the $6,238,000 cash collateral referred to above.
The Notes were rated "PPR2-" by Standard and Poor's
Corporation and "NAIC-2" by the National Association of
Insurance Commissioners.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
10.18 Note Agreement dated as of December 15, 1993, between Care
Enterprises, Inc. and the Purchasers named on Schedule I
to the Note Agreement.
10.19 Indenture of Trust dated as of December 15, 1993, between
Care Enterprises, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as Indenture
Trustee.
10.20 Guaranty Agreement dated as of December 15, 1993 from
certain Subsidiaries of Care Enterprises, Inc. in favor of
Note Holders
10.21 Letter Agreement dated December 29, 1993 between Wells
Fargo Bank, National Association and Care Enterprises,
Inc.
99.1 8.10% Senior Secured Note from Care Enterprises, Inc. to
John Hancock Mutual Life Insurance Company in the original
principal amount of $12,000,000, dated December 30, 1993.
99.2 8.10% Senior Secured Note from Care Enterprises, Inc. to
John Hancock Life Insurance Company of America in the
original principal amount of $1,000,000, dated
December 30, 1993.
99.3 8.10% Senior Secured Note from Care Enterprises, Inc. to
Mellon Bank, N.A., Trustee under Master Trust Agreement of
NYNEX Corporation dated January 1, 1984 for Employee
Pension Plans - NYNEX - John Hancock - Private Placement
in the original principal amount of $2,000,000, dated
December 30, 1993.
99.4 8.10% Senior Secured Note from Care Enterprises, Inc. to
Anchor National Life Insurance Company in the original
principal amount of $15,000,000, dated December 30, 1993.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Care Enterprises, Inc.
Dated: January 13, 1994 By: /s/ GARY L. MASSIMINO
Gary L. Massimino
Executive Vice President
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
10.18 Note Agreement dated as of December 15, 1993,
between Care Enterprises, Inc. and the Purchasers
named on Schedule I to the Note Agreement.
10.19 Indenture of Trust dated as of December 15, 1993,
between Care Enterprises, Inc. and State Street Bank
and Trust Company of Connecticut, National Association,
as Indenture Trustee.
10.20 Guaranty Agreement dated as of December 15, 1993 in
favor of Note Holders by certain Subsidiaries of Care
Enterprises, Inc.
10.21 Letter Agreement dated December 29, 1993 between
Wells Fargo Bank, National Association and Care
Enterprises, Inc.
99.1 8.10% Senior Secured Note from Care Enterprises, Inc.
to John Hancock Mutual Life Insurance Company in the
original principal amount of $12,000,000, dated
December 30, 1993.
99.2 8.10% Senior Secured Note from Care Enterprises, Inc.
to John Hancock Life Insurance Company of America in
the original principal amount of $1,000,000, dated
December 30, 1993.
99.3 8.10% Senior Secured Note from Care Enterprises, Inc.
to Mellon Bank, N.A., Trustee under Master Trust
Agreement of NYNEX Corporation dated January 1, 1984
for Employee Pension Plans - NYNEX - John Hancock -
Private Placement in the original principal amount of
$2,000,000, dated December 30, 1993.
99.4 8.10% Senior Secured Note from Care Enterprises, Inc.
to Anchor National Life Insurance Company in the original
principal amount of $15,000,000, dated December 30, 1993.
<PAGE>
Care Enterprises, Inc.
Note Agreement
Dated as of December 15, 1993
Re: $30,000,000 8.10% Senior Secured Notes
Due December 15, 2000
Table of Contents
(Not a part of the Agreement)
SECTION HEADING PAGE
Section 1. Description of Notes and Commitment. 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 1
Section 1.3. Several Commitments 2
Section 1.4. Security for the Notes 2
Section 1.5. Guaranty Agreement 2
Section 2. Representations. 2
Section 2.1. Representations of the Company 2
Section 2.2. Representations of the Purchasers 2
Section 3. Closing Conditions 3
Section 3.1. Conditions 3
Section 3.2. Waiver of Conditions 8
Section 4. Company Covenants 8
Section 4.1. Corporate Existence, Etc 8
Section 4.2. Insurance 8
Section 4.3. Taxes, Claims for Labor and Materials,
Compliance with Laws; Maintenance of
Licenses and Accreditation 9
Section 4.4. Maintenance, Etc 10
Section 4.5. Nature of Business 10
Section 4.6. Current Ratio 10
Section 4.7. Consolidated Tangible Net Worth 10
Section 4.8. Limitations on Debt for Borrowed Money 10
Section 4.9. Fixed Charges Coverage Ratio 12
Section 4.10. Limitation on Liens 12
Section 4.11. Restricted Payments 14
Section 4.12. Investments 14
Section 4.13. Mergers, Consolidations and Sales
of Assets 16
Section 4.14. Guaranties 18
Section 4.15. Repurchase of Notes 18
Section 4.16. Transactions with Affiliates 19
Section 4.17. Termination of Pension Plans 19
Section 4.18. Reports and Rights of Inspection 19
Section 4.19. Limitation on Payment Restrictions
Affecting Restricted Subsidiaries 24
Section 4.20. New Restricted Subsidiaries 24
Section 5. Amendments, Waivers and Consents 24
Section 5.1. Consent Required 24
Section 5.2. Effect of Amendment or Waiver 24
Section 6. Interpretation of Agreement; Definitions 24
Section 6.1. Definitions 24
Section 6.2. Accounting Principles 32
Section 6.3. Directly or Indirectly; Independence
of Covenants 32
Section 7. Miscellaneous 32
Section 7.1. Registration, Transfer and Exchange
of Notes 32
Section 7.2. Direct Payment 32
Section 7.3. Expenses, Stamp Tax Indemnity 33
Section 7.4. Notices 33
Section 7.5. Successors and Assigns 34
Section 7.6. Survival of Covenants and Representations 34
Section 7.7. Severability 34
Section 7.8. Governing Law 34
Section 7.9. Submission to Jurisdiction 34
Section 7.10. Captions 35
Section 7.11. Termination of Leases 35
Section 7.12. Standard & Poor's Rating 35
Signatures 36
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Names of Note Purchasers and Amounts of
Commitments
Schedule II - Payment Instructions
Schedule III - Best Ratings for Insurers
Schedule IV - Liens Securing Debt for Borrowed Money
(including Capitalized Leases) as of the
Closing Date
Schedule V - Investments as of December 22, 1993
Exhibit A - Representations and Warranties of the
Company
Exhibit B - Description of Special Counsel's Closing
Opinion
Exhibit C - Closing Opinion of Counsel and Local
California Counsel for the Company and the
Restricted Subsidiaries
Exhibit D - Closing Opinion of M. Louise Paquet,
In-House Corporate Counsel to the Company
and the Restricted Subsidiaries
Exhibit E - Local Ohio Counsel's Closing Opinion
Exhibit F - Local West Virginia Counsel's Closing
Opinion
Exhibit G - Indenture Trustee's Closing Opinion
Exhibit H - Form of Indenture
Exhibit I - Form of Mortgage
Exhibit J - Form of Guaranty Agreement
Exhibit K - Description of Mortgaged Facilities
Care Enterprises, Inc.
2742 Dow Avenue
Tustin, California 92680-7245
Note Agreement
Re: $30,000,000 8.10% Senior Secured Notes
Due December 15, 2000
Dated as of
December 15, 1993
To the Purchasers named on Schedule I
to this Agreement
The undersigned, Care Enterprises, Inc., a Delaware
corporation (the "Company"), agrees with the Purchasers named on
Schedule I to this Agreement (the "Purchasers") as follows:
Section 1. Description of Notes and Commitment.
Section 1.1. Description of Notes. The Company will
authorize the issue and sale of $30,000,000 aggregate principal
amount of its 8.10% Senior Secured Notes (the "Notes") to be
dated the date of issue, to bear interest from such date at the
rate of 8.10% per annum, payable semiannually on the fifteenth
day of each January and July in each year (commencing January 15,
1994) and at maturity and to bear interest on overdue principal
(including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the rate
of 10.10% per annum after the date due, whether by acceleration
or otherwise, until paid, to be scheduled to mature on
December 15, 2000. The Notes will be issued under the Indenture
of Trust dated as of December 15, 1993 (the "Indenture") between
the Company and State Street Bank and Trust Company of
Connecticut, National Association, as trustee (the "Indenture
Trustee"), and will be substantially in the form thereof attached
as Annex I thereto. Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months. The Notes
are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if
any, set forth in Section 5.2 of the Indenture. The term "Notes"
as used herein shall include each Note delivered pursuant to the
Indenture.
Section 1.2. Commitment, Closing Date. Subject to
the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the Company
agrees to issue and sell to each Purchaser, and such Purchaser
agrees to purchase from the Company, Notes in the principal
amount set forth opposite such Purchaser's name on Schedule I
hereto at a price of 100% of the principal amount thereof on the
Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, against payment therefor in Federal Reserve or other funds
current and immediately available to such bank account as the
Company shall designate by written notice in the amount of the
purchase price at 10:00 a.m., Chicago time, on December 30, 1993
or such later date as shall mutually be agreed upon by the
Company and the Purchasers (the "Closing Date"). The Notes
delivered to each Purchaser on the Closing Date will be delivered
to such Purchaser in the form of a single registered Note in the
form attached to the Indenture as Annex I for the full amount of
such Purchaser's purchase (unless different denominations are
specified by such Purchaser), registered in such Purchaser's name
or in the name of such Purchaser's nominee, all as such Purchaser
may specify at any time prior to the date fixed for delivery.
Section 1.3. Several Commitments. The obligations of
the Purchasers shall be several and not joint and no Purchaser
shall be liable or responsible for the acts or defaults of any
other Purchaser.
Section 1.4. Security for the Notes. The Notes will
be issued under the Indenture, substantially in the form attached
hereto as Exhibit H, and secured by the Mortgages, each
substantially in the form attached hereto as Exhibit I.
Section 1.5. Guaranty Agreement. All amounts of
principal, interest and premium, if any, on the Notes, all costs
and expenses of collection thereon and the full and prompt
performance by the Company of all obligations under this
Agreement, the Indenture and the Mortgages shall be jointly and
severally guaranteed by each of the Restricted Subsidiaries of
the Company (collectively, the "Guarantors") pursuant to the
Guaranty Agreement dated as of December 15, 1993 (the "Guaranty
Agreement") from each of the Guarantors in substantially the form
attached hereto as Exhibit J.
Section 2. Representations.
Section 2.1. Representations of the Company. The
Company represents and warrants that all representations and
warranties set forth in Exhibit A are true and correct as of the
date hereof and are incorporated herein by reference with the
same force and effect as though herein set forth in full.
Section 2.2. Representations of the Purchasers. Each
Purchaser represents and warrants to the Company that such
Purchaser is acquiring the Notes for the purpose of investment
and not with a view to the distribution thereof, and that such
Purchaser has no present intention of selling, negotiating or
otherwise disposing of the Notes; it being understood, however,
that the disposition of such Purchaser's property shall at all
times be and remain within its control. Each Purchaser further
represents and warrants to the Company that at least one of the
following statements is an accurate representation as to the
source of funds to be used by such Purchaser to pay the purchase
price of the Notes purchased by it hereunder (respectively, the
"Source"):
(a) The Source is not "plan assets" for purposes of the
prohibited transaction provisions of ERISA under
Interpretive Bulletin 75-2, 25 CFR Sections 2509.75-2;
(b) The Source is a "governmental plan" as defined in
Title I, Section 3(32) of ERISA;
(c) The Source is either (i) an insurance company pooled
separate account and the purchase is exempt in accordance
with Prohibited Transaction Exemption ("PTE") 90-1 (issued
January 29, 1990), or (ii) a bank collective investment
fund, and the purchase is exempt in accordance with PTE
91-38 (issued July 12, 1991);
(d) The Source is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as
defined in Part V of PTE 84-14, issued March 13, 1984)
which QPAM has been identified in writing, and the purchase
is exempt under PTE 84-14, provided that no other party to
the transactions described in this Agreement and no
"affiliate" of such other party (as defined in
Section V(c) of PTE 84-14) has at this time, and during
the immediately preceding one year has exercised the
authority to appoint or terminate said QPAM as manager of
the assets of any "plan" identified in writing pursuant to
this paragraph (d) or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified
"plans"; or
(e) The Source is one or more "plans" or a separate
account or trust fund comprised of one or more
plans, each of which has been identified in writing
pursuant to this paragraph (e).
Each Purchaser further represents and warrants that such
Purchaser has not retained any broker in connection with the
transactions contemplated by this Agreement or the Indenture.
Section 3. Closing Conditions.
Section 3.1. Conditions. The obligation of each
Purchaser to purchase the Notes on the Closing Date shall be
subject to its satisfaction with the performance by the Company
of its agreements hereunder which by the terms hereof are to be
performed at or prior to the time of delivery of the Notes and
the following further conditions precedent:
(a) Closing Certificate. Such Purchaser shall have
received a certificate dated the Closing Date, signed by
the President or a Vice President of the Company, the
truth and accuracy of which shall be a condition to such
Purchaser's obligation to purchase the Notes proposed
to be sold to such Purchaser and to the effect that (i) the
representations and warranties of the Company set forth in
Exhibit A hereto are true and correct on and with respect
to the Closing Date, (ii) the Company has performed all of
its obligations hereunder which are to be performed
on or prior to the Closing Date, and (iii) no Default
or Event of Default has occurred and is continuing.
(b) Execution of Documents. On or prior to the Closing
Date, the Company shall have executed, acknowledged and
delivered this Agreement, the Notes, the Indenture and the
Mortgages with respect to each of its Mortgaged Facilities
substantially in the form attached hereto as Exhibit I with
such revisions as are necessary or appropriate for the
purpose of creating a first and paramount lien thereon.
Each such Mortgage shall have been delivered to the Title
Company (as defined in Section 3.1(g)) as a mortgage of
real estate and all UCC financing statements (including
fixture filings) evidencing the liens granted
in the Mortgages shall have been recorded or filed for
record, in each case, in each public office wherein
such recording or filing is deemed necessary or appropriate
by such Purchaser or such Purchaser's special counsel to
perfect the Lien thereof as against creditors of or
purchasers from the grantor thereunder.
(c) Purchase and Sale Leaseback Agreement; Lease. On or
prior to the Closing Date, the Company and the appropriate
Restricted Subsidiaries shall have executed and delivered,
(i) a Purchase and Sale Leaseback Agreement between the
Company and the relevant Restricted Subsidiary and (ii) a
Lease between the Company and the relevant Restricted
Subsidiary with respect to each of its Mortgaged Facilities
which will be operated by a Restricted Subsidiary.
(d) Guaranty Agreement. On or prior to the Closing
Date, the Restricted Subsidiaries shall have entered
into, executed and delivered the Guaranty Agreement
substantially in the form attached hereto as Exhibit J,
providing for the unconditional joint and several guaranty
by each Restricted Subsidiary.
(e) Survey. On or prior to the Closing Date, the Company
shall have caused a physical survey of each parcel of real
estate comprising a portion of each Mortgaged Facility to be
made by a registered civil engineer or surveyor and shall
have furnished to such Purchaser and such Purchaser's
special counsel a plat of survey duly certified to such
Purchaser and the Indenture Trustee by such engineer or
surveyor which shall show no encroachments upon such real
estate parcel by adjoining buildings or structures and no
encroachments on adjoining premises by the buildings or
improvements erected thereon. Each such survey shall be
prepared in accordance with the standard detail
requirements for land surveys adopted by the American
Title Association and the American Congress on
Surveying and Mapping, as revised and in effect on the
date of delivery of such survey, shall show the following
Table A requirements: 1, 2, 3, 6, 7, 8, 9, 10, 11 and 13.
(f) Appraisal. On or prior to the Closing Date, such
Purchaser shall have received an Appraisal stating the fair
market value of each of the Mortgaged Facilities, which
Appraisal shall have been completed and dated not earlier
than two months prior to the Closing Date and shall be
acceptable in form and substance to such Purchaser.
(g) Evidence of Title. On or prior to the Closing Date,
the Company shall have obtained from Chicago Title
Insurance Company or another title insurance company or
companies of good standing selected by the Company and
satisfactory to such Purchaser (the "Title Company")
a marked-up, countersigned title insurance
commitment evidencing title insurance coverage (the "Title
Commitment") on a standard American Land Title Association
Form Mortgage Title Insurance Policy (Loan Policy-1970
Form) with the following endorsements: (i) Comprehensive
Endorsement No. l or its equivalent, (ii) a tie-in
endorsement, (iii) a contiguity endorsement (for any
Mortgaged Facility of more than one
parcel), (iv) an ALTA 3.1 zoning endorsement (with
parking), (v) an endorsement to the effect that each
Mortgaged Facility is treated as a separate tax parcel,
(vi) an endorsement to the effect that the legal
description as surveyed is the same as that in the title
commitment and policy, and (vii) a usury endorsement.
The policies shall be in the aggregate amount which will
provide for mortgage title insurance on each Mortgaged
Facility in an amount not less than the
amount determined by multiplying the Appraisal
Value of such Mortgaged Facility by a fraction, the
numerator of which is equal to the principal amount of the
Notes outstanding and the denominator of which is equal to
the Appraisal Value of all Mortgaged Facilities and showing
marketable record title thereto to be vested in the
Company, as appropriate, subject only to:
(i) the liens, charges and encumbrances, if any,
permitted by the related Mortgage;
(ii) such exceptions as are standard under ALTA policies
(but such policies shall not be subject to a survey or
mechanic's lien exception); and
(iii) such other exceptions as shall be satisfactory to
such Purchaser and such Purchaser's special counsel; and
agreeing to insure such Purchaser upon the proper execution and
recording of the related Mortgage against loss or damage
sustained by reason of the same not being a first and paramount
lien upon such Mortgaged Facility, subject only to the exceptions
referred to in the foregoing clauses (i) through (iii).
The Company will, as soon as practicable and in any event
within 45 days after the Closing Date, without cost or expense to
such Purchaser, obtain and deliver to such Purchaser the policy
or policies contemplated by the commitment of the Title Company.
(h) UCC Searches. The Company shall have obtained and
furnished to you searches satisfactory in scope and form
evidencing that, except for Liens permitted hereunder, none of
the Collateral (excluding real property) is subject to any
security interest under the Uniform Commercial Code as adopted by
the State in which such Collateral is located.
(i) Regulatory Agency Approvals. On or prior to the
Closing Date, such Purchaser shall be provided with true copies
for each Mortgaged Facility of (i) all licenses issued by the
applicable State health department permitting such Mortgaged
Facility to be operated as a skilled-nursing facility, (ii) local
business licenses necessary for the operation of such Mortgaged
Facility and (iii) certificates of eligibility of each Mortgaged
Facility for Medicare and Medicaid.
(j) Environmental Assessment. At least 10 Business Days
prior to the Closing Date, the Company shall have furnished such
Purchaser and the Indenture Trustee with a Phase I environmental
assessment, satisfactory in form and substance to such Purchaser
and such Purchaser's special counsel, performed by Valuation
Counselors Group, Inc., of each Mortgaged Facility.
The Company acknowledges and agrees that such Purchaser
shall not be obligated to purchase the Notes if such Purchaser,
in such Purchaser's sole judgment, determines for any reason
whatsoever (including, without limitation, information revealed
by the above-described environmental assessment) that the use or
condition of the Mortgaged Facilities, or any part thereof, could
have a material adverse effect on the properties, business,
prospects or condition (financial or otherwise) of the Company
and its Restricted Subsidiaries, taken as a whole, or of the
Restricted Subsidiary which operates such Mortgaged Facility.
(k) Legal Opinions. Such Purchaser shall have received
from Chapman and Cutler, who are acting as special counsel to the
Purchasers, from Sidley & Austin, counsel for the Company and the
Restricted Subsidiaries and local California counsel for the
Company, from M. Louise Paquet, in-house corporate counsel, from
Bricker & Eckler, local Ohio counsel for the Company, from
Goodwin & Goodwin, local West Virginia counsel for the Company,
and from Bingham, Dana & Gould, counsel to the Indenture Trustee,
their respective opinions dated the Closing Date, in form and
substance satisfactory to such Purchaser, and covering the
matters set forth in Exhibits B, C, D, E, F and G, respectively,
hereto.
(l) Insurance. On or prior to the Closing Date, such
Purchaser shall have received (a) a report of an independent
insurance broker or consultant satisfactory to such Purchaser
setting forth a description of the insurance obtained in
accordance with the provisions of Section 4.2 hereof and Section
2.6 of the Mortgages, and stating that such insurance is in full
force and effect, all premiums then due thereon have been paid,
and, in the opinion of such broker or consultant, such insurance
complies with the provisions of such Sections, and (b)
certificates of insurance signed by the applicable broker or
underwriter evidencing such coverage.
(m) NAIC Rating. The National Association of
Commissioners shall have issued a rating with respect to the
Notes of not less than NAIC-2.
(n) S&P Rating. On or prior to the Closing Date, such
Purchaser shall have received a credit rating with respect to the
Notes of PPR 2- or better from Standard & Poor's Corporation.
(o) Private Placement Number. Standard & Poor's CUSIP
Service bureau shall have assigned a Private Number to the Notes.
(p) Consent of Holders of Other Securities. On or prior to
the Closing Date, any consents or approvals required to be
obtained from any holder or holders of any outstanding Security
of the Company or any Restricted Subsidiary or any party to a
material agreement with the Company or a Restricted Subsidiary
and any amendments of such agreement or any agreements pursuant
to which any Securities may have been issued which shall be
necessary to permit the consummation of the transactions
contemplated hereby shall have been obtained and all such
consents or amendments shall be satisfactory in form and
substance to such Purchaser and such Purchaser's special counsel.
(q) Payment of Counsel Fees. The Company shall have paid
all reasonable fees and expenses of special counsel to the
Purchasers, the Indenture Trustee and special counsel to Anchor
National Life Insurance Company to the extent that such fees and
expenses are known as of the Closing Date and are reflected in
appropriate bills or invoices delivered by such special counsel.
(r) Supporting Documents. The Company shall have
delivered to the Purchasers:
(1) a copy of the Company and each Guarantor's
articles or certificate of incorporation, or equivalent
document, certified by the Secretary of State of its state
of incorporation and a copy of each of their bylaws
certified by their respective secretaries or assistant
secretaries;
(2) certificates of the secretary or an assistant
secretary of the Company and each of the Guarantors dated
the Closing Date and certifying (i) that there have been no
amendments to the articles or certificate of incorporation
or bylaws and of the Company or such Guarantor since the
date of the last amendment thereof indicated on the
articles or certificates of incorporation and bylaws
furnished pursuant to clause (1) above; (ii) that attached
thereto is a true and complete copy of resolutions adopted
by the Board of Directors of the Company authorizing the
execution and delivery of this Agreement, the Indenture,
the Mortgages, the Leases and the Notes and resolutions
adopted by the Board of Directors of each of the Guarantors
authorizing the execution and delivery of the Guaranty
Agreement and, if applicable, the Leases; (iii) the
incumbency and specimen signature of the officer of the
Company executing this Agreement, the Indenture, the
Mortgages, the Leases and the Notes and any other documents
and instruments furnished pursuant hereto or thereto
and a certification by another officer of the
Company as to the incumbency and signature of
the authorized officer of the Company; and (iv) the
incumbency and specimen signature of the authorized officer
of each Guarantor executing the Guaranty Agreement and any
other documents and instruments furnished pursuant hereto
or thereto and a certification by another officer of
such Guarantor as to the incumbency and signature of the
authorized officer of the Guarantor; and
(3) a certificate of the Secretary of State of the
state of incorporation evidencing good standing of the
Company and each Guarantor in its state of incorporation.
(s) Related Transactions. The Company shall have
consummated the sale of the entire principal amount of the Notes
scheduled to be sold on the Closing Date pursuant to this
Agreement.
(t) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement,
and all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to such Purchaser and such
Purchaser's special counsel, and such Purchaser shall have
received a copy (executed or certified as may be appropriate) of
all legal documents or proceedings taken in connection with the
consummation of said transactions.
Section 3.2. Waiver of Conditions. If on the Closing Date
the Company fails to tender to any Purchaser the Notes to be
issued to any Purchaser on such date or if the conditions
specified in Section 3.1 have not been fulfilled, such Purchaser
may thereupon elect to be relieved of all further obligations
under this Agreement. Without limiting the foregoing, if the
conditions specified in Section 3.1 have not been fulfilled, such
Purchaser may waive compliance by the Company with any such
condition to such extent as such Purchaser may in its sole
discretion determine. Prior to the purchase of the Notes,
nothing in this Section 3.2 shall operate to relieve the Company
of any of its obligations hereunder or to waive any Purchaser's
rights against the Company.
Section 4. Company Covenants.
From and after the Closing Date and continuing so long as any
amount remains unpaid under this Agreement, the Indenture or any
Note:
Section 4.1. Corporate Existence, Etc. The Company will
preserve and keep in full force and effect, and will cause each
Restricted Subsidiary to preserve and keep in full force and
effect, its corporate existence and all licenses and permits
necessary to the proper conduct of its business; provided,
however, that the foregoing shall not prevent any transaction
permitted by Section 4.13.
Section 4.2. Insurance. The Company will maintain and
will cause each Restricted Subsidiary to maintain, with
financially sound and reputable insurers accorded, in the case of
insurers providing property insurance, a rating by A.M. Best
Company, Inc. ("Best") of A:XII or higher at the time of issuance
of any property insurance policy and in the case of an insurer
providing any other insurance, a rating by Best not lower at the
time of issuance thereof than the rating indicated on Schedule
III for the type of insurance provided by such insurer, insurance
coverage with respect to its properties and business against such
casualties and contingencies, of such types (including public
liability, larceny, embezzlement or other criminal
misappropriation insurance) and in such amounts (including with
such deductibles and levels of self-insurance) and against such
risks as is customary in the case of corporations of established
reputations engaged in the same or a similar business and
similarly situated in the same general geographic area.
Section 4.3. Taxes, Claims for Labor and Materials,
Compliance with Laws; Maintenance of Licenses and Accreditation.
(a) The Company will promptly pay and discharge, and will cause
each Restricted Subsidiary promptly to pay and discharge, all
lawful taxes, assessments and governmental charges or levies
imposed upon the Company or such Restricted Subsidiary,
respectively, or upon or in respect of all or any part of the
property or business of the Company or such Restricted
Subsidiary, all trade accounts payable in accordance with usual
and customary business terms, and all claims for work, labor or
materials, which if unpaid might become a Lien upon any property
of the Company or such Restricted Subsidiary; provided, however,
that the Company or such Restricted Subsidiary shall not be
required to pay any such tax, assessment, charge, levy, account
payable or claim if (i) the validity, applicability or amount
thereof is being contested in good faith by appropriate actions
or proceedings which will prevent the forfeiture or sale of any
property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or such
Restricted Subsidiary, and (ii) the Company or such Restricted
Subsidiary shall set aside on its books, reserves deemed by it to
be adequate with respect thereto or, if greater, such reserves as
are required by GAAP.
(b) The Company will comply and will cause each Subsidiary
to comply with all laws, ordinances or governmental rules and
regulations to which it is subject including, without limitation,
the Occupational Safety and Health Act of 1970, as amended, ERISA
and all laws, ordinances, governmental rules and regulations
relating to environmental protection in all applicable
jurisdictions, the violation of which could reasonably be
expected to have a material adverse effect on the Mortgaged
Facilities, individually or in the aggregate, or the properties,
business, profits or condition (financial or otherwise) of the
Company and its Restricted Subsidiaries or could reasonably be
expected to result in any Lien not permitted under Section 4.10.
(c) The Company will, and will cause each Restricted
Subsidiary, to maintain (i) the certification for payment under
Medicare and equivalent insurance programs and Medicaid and other
similar contractual programs of (x) each Mortgaged Facility,
provided, that loss of such certification shall not violate this
Section 4.3(c) if the Company is diligently pursuing
recertification and receives such recertification of such
Mortgaged Facility within 180 days and (y) each other Facility,
except in the case of Facilities (other than Mortgaged
Facilities) where failure to maintain such certification could
not reasonably be excepted to have a material adverse effect on
the operation of the Facilities, taken as a whole, and (ii) all
licenses necessary for the operation of its Facilities, except
for licenses the failure to maintain which could not reasonably
be expected to have a material adverse effect on the operation of
such Facility.
Section 4.4. Maintenance, Etc. The Company will maintain,
preserve and keep, and will cause each Restricted Subsidiary to
maintain, preserve and keep, its properties which are used or
useful in the conduct of its business (whether owned in fee or a
leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements,
renewals and additions so that at all times the efficiency
thereof shall be maintained.
Section 4.5. Nature of Business. Neither the Company nor
any Restricted Subsidiary will engage in any business if, as a
result, the general nature of the business, taken on a
consolidated basis, which would then be engaged in by the Company
and its Restricted Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company
and its Restricted Subsidiaries on the date of this Agreement;
provided that the Company and its Restricted Subsidiaries may
also engage in the pharmacy business.
Section 4.6. Current Ratio. The Company will at all times
keep and maintain the ratio of Consolidated Current Assets to
Consolidated Current Liabilities at not less than 0.8 to 1.0 from
the Closing Date through and including December 31, 1993, and 1.0
to 1.0 thereafter.
Section 4.7. Consolidated Tangible Net Worth. The Company
will at all times keep and maintain Consolidated Tangible Net
Worth at an amount not less than the greater of (i) $15,000,000
and (ii) the sum of $15,000,000 plus 50% of Consolidated Net
Income for the period from and after December 31, 1993 to the
date of determination thereof, considered as a single accounting
period.
Section 4.8. Limitations on Debt for Borrowed Money.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, create, assume or incur or in any manner be or
become liable in respect of any Debt for Borrowed Money, except:
(1) Debt for Borrowed Money evidenced by the Notes;
(2) Debt for Borrowed Money of the Company and its
Restricted Subsidiaries outstanding as of the Closing Date and
reflected on Annex B to Exhibit A;
(3) Debt for Borrowed Money of the Company to any
Wholly-owned Restricted Subsidiary;
(4) Debt for Borrowed Money of a Restricted Subsidiary
to the Company or to a Wholly-owned Restricted Subsidiary;
(5) Debt for Borrowed Money of the Guarantors pursuant
to the Guaranty Agreement;
(6) additional Debt for Borrowed Money of the Company
and its Restricted Subsidiaries, provided that at the time of
creation, issuance, assumption, guarantee or incurrence thereof
and after giving effect thereto and to the application of the
proceeds thereof:
(i) the ratio of Consolidated Debt for Borrowed
Money (including any Basket Debt) to Consolidated
Total Capitalization shall not exceed the ratio set
opposite each period in the table below:
PERIOD RATIO
Closing Date through December 31, 1993 0.70 to 1
January 1, 1994 through December 31, 1994 0.65 to 1
January 1, 1995 through December 31, 1995 0.65 to 1
January 1, 1996 through December 31, 1996 0.60 to 1
January 1, 1997 and thereafter 0.55 to 1; and
(ii) in the case of the incurrence after the date
hereof of any secured Debt for Borrowed Money of the Company or
the incurrence after the date hereof of any Debt for Borrowed
Money of a Restricted Subsidiary, Basket Debt shall not exceed
10% of Consolidated Tangible Net Worth; and
(7) Debt for Borrowed Money of the Company not to exceed
$1,000,000 at any time outstanding incurred to finance the
acquisition of insurance policies.
(b) In the event of a renewal, extension or refunding of
any Debt for Borrowed Money, the amount by which the principal
amount of Debt for Borrowed Money incurred in connection with
such renewal, extension or refunding (or in the case of a
revolving credit facility, the amount to be drawn concurrently
with such renewal, extension or refunding) exceeds the principal
amount of Debt for Borrowed Money outstanding immediately prior
to such renewal, extension or refunding shall constitute the
issuance of additional Debt for Borrowed Money which is, in turn,
subject to the limitations of the applicable provisions of this
Section 4.8; provided, however, that any renewal, extension or
refunding of any amount of Specified Debt or Specified Guaranties
shall constitute the issuance of additional Debt for Borrowed
Money subject to the limitation of the applicable provisions of
Section 4.8(a), unless such renewal, extension or refunding of
Specified Debt results in the same or a lower interest rate and
the amount by which the principal amount of Debt for Borrowed
Money incurred in connection with such renewal, extension or
refunding exceeds the principal amount outstanding immediately
prior to such renewal, extension or refunding is subject to the
limitations of the applicable provisions of Section 4.8(a).
(c) Any corporation which becomes a Restricted
Subsidiary after the date hereof shall for all purposes of this
Section 4.8 be deemed to have created, assumed or incurred at the
time it becomes a Restricted Subsidiary all Debt for Borrowed
Money of such corporation existing immediately after it becomes a
Restricted Subsidiary.
Section 4.9. Fixed Charges Coverage Ratio. The Company
will keep and maintain the ratio of Net Income Available for
Fixed Charges to Fixed Charges for each period of four
consecutive fiscal quarters at not less than 1.25 to 1.00.
Section 4.10. Limitation on Liens. The Company will not,
and will not permit any Restricted Subsidiary to, create or
incur, or suffer to be incurred or to exist, any Lien on any of
its or their respective properties or assets, whether now owned
or hereafter acquired, or upon any income or profits therefrom,
or transfer any property for the purpose of subjecting the same
to the payment of obligations in priority to the payment of its
or their general creditors, or acquire or agree to acquire, or
permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention
devices, except:
(a) Liens for property taxes and assessments or
governmental charges (other than Liens arising under ERISA) or
levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required
by Section 4.3;
(b) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not
have expired, or in respect of which the Company or a Restricted
Subsidiary shall at any time in good faith be prosecuting an
appeal or proceeding for a review and in respect of which a stay
of execution pending such appeal or proceeding for review shall
have been secured and shall remain in effect;
(c) Liens (other than Liens arising under ERISA),
deposits, pledges or letters of credit in connection with or to
secure payment of worker's compensation, patient trust funds,
unemployment insurance, old-age pensions, other social security
and other like laws or regulations, warehousemen's and attorneys'
liens and statutory landlords' liens and Liens to secure the
performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of
like general nature incurred in the ordinary course of business
and not in connection with the borrowing of money; provided in
each case, the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of any
property of the Company or any Restricted Subsidiary or any
material interference with the use thereof by the Company or such
Restricted Subsidiary;
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties, which are
necessary for the conduct of the activities of the Company and
its Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and
similarly situated in the same general geographic area and which
do not in any event materially impair their use in the operation
of the business of the Company and its Restricted Subsidiaries;
(e) Liens existing as of the Closing Date and reflected
in Schedule IV hereto or reflected in the surveys and title
reports delivered pursuant to Section 3.1(e) and (g), and any
Liens incurred in connection with any renewals, extensions or
refundings of any Indebtedness secured by such Liens, provided
that (i) no additional property is encumbered and (ii) there is
no increase in the principal amount of each issue or evidence of
Indebtedness secured thereby;
(f) Liens incurred pursuant to the Mortgages and Leases
and any other leases of real property between the Company, as
lessor, and a Restricted Subsidiary, as lessee;
(g) Liens incurred after the Closing Date given to
secure the payment of the purchase price incurred in connection
with the acquisition of, or improvement to, assets (including
equity securities) useful and intended to be used in carrying on
the business of the Company or a Restricted Subsidiary, including
Liens existing on such assets at the time of acquisition thereof
or at the time of acquisition by the Company or a Restricted
Subsidiary of any business entity then owning such assets,
whether or not such existing Liens were given to secure the
payment of the purchase price of the assets to which they attach
so long as they were not incurred, extended or renewed in
contemplation of such acquisition, provided that (i) the Lien
shall attach solely to the assets acquired or improved, (ii) such
Lien (other than any Liens existing on such assets at the time of
acquisition thereof or at the time of acquisition by the Company
or a Restricted Subsidiary of any business entity owning such
assets) shall have been created or incurred within 12 months of
the date of such acquisition or improvement, (iii) at the time of
the creation or incurrence of such Lien on such assets, the
aggregate amount remaining unpaid on all Indebtedness secured by
Liens on such assets whether or not assumed by the Company or a
Restricted Subsidiary shall not exceed an amount equal to the
lesser of the total purchase price or fair market value at the
time of acquisition of such assets or of such improvement
thereto, as the case may be (as determined in good faith by the a
Responsible Officer of the Company), and (iv) all such
Indebtedness shall have been incurred within the applicable
limitations provided in Section 4.8; and
(h) other Liens, provided that, at the time of the
incurrence of any such other Liens and after giving effect to the
proceeds of any obligations secured thereby, (i) Basket Debt
would not exceed 10% of Consolidated Tangible Net Worth and (ii)
the Company would be able to incur at least $1.00 of additional
Debt for Borrowed Money within the limitations provided for in
Section 4.8.
Section 4.11. Restricted Payments. The Company will
not except as hereinafter provided:
(a) Declare or pay any dividends, either in cash or
property, on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of
capital stock of the Company other than capital stock which is
subject to required redemptions or sinking fund provisions);
(b) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of the Company's capital
stock of any class or any warrants, rights or options to purchase
or acquire any shares of its capital stock (other than in
exchange for or out of the net cash proceeds to the Company from
the substantially concurrent issue or sale of other shares of
capital stock of the Company (unless such capital stock so
exchanged or issued is subject to required redemptions or sinking
fund provisions), or warrants, rights or options to purchase or
acquire any shares of its capital stock); or
(c) Make any other payment or distribution (except
equity rights issued pursuant to an equity rights offering),
either directly or indirectly or through any Subsidiary, in
respect of the Company's capital stock;
(such declarations or payments of dividends, purchases,
redemptions or retirements of capital stock and warrants, rights
or options and all such other payments or distributions being
herein collectively called "Restricted Payments"), if after
giving effect thereto (i) any Default or Event of Default shall
have occurred and be continuing, (ii) the Company would not be
permitted to incur at least $1.00 of additional Debt for Borrowed
Money under the provisions of Section 4.8, or (iii) the sum of
(x) the aggregate amount of Restricted Payments made during the
period from and after the Closing Date to and including the date
of the making of the Restricted Payment in question, plus (y) the
aggregate amount of all Restricted Investments made by the
Company or any Restricted Subsidiary during said period would
exceed 25% of Consolidated Net Income for such period, computed
on a cumulative basis for said entire period.
The Company will not declare any dividend which constitutes
a Restricted Payment payable more than 60 days after the date of
declaration thereof.
For the purposes of this Section 4.11, the amount of any
Restricted Payment declared, paid or distributed in property
shall be deemed to be the greater of the book value or fair
market value (as determined in good faith by the Board of
Directors of the Company) of such property at the time of the
making of the Restricted Payment in question.
Section 4.12. Investments. The Company will not, and will
not permit any Restricted Subsidiary to, make or hold any
Investments, other than:
(a) Investments existing as of December 22, 1993 and
reflected in Schedule V hereto;
(b) Investments by the Company and its Restricted
Subsidiaries in and to Restricted Subsidiaries or the Company,
including any Investment in a corporation which, after giving
effect to such Investment, will become a Restricted Subsidiary;
(c) Investments in commercial paper maturing in 270 days
or less from the date of issuance which, at the time of
acquisition by the Company or any Restricted Subsidiary, is rated
A-1 or better by Standard & Poor's Corporation or Prime-1 or
better by Moody's Investors Service, Inc.;
(d) Investments in direct obligations of the United
States of America or any agency or instrumentality of the United
States of America, the payment or guarantee of which constitutes
a full faith and credit obligation of the United States of
America, in either case, maturing in twelve months or less from
the date of acquisition thereof;
(e) Investments in certificates of deposit maturing
within one year from the date of issuance thereof or in
interest-bearing or non-interest bearing demand deposits or money
market accounts, in each case issued or sponsored by a bank or
trust company organized under the laws of the United States or
any state thereof, having capital, surplus and undivided profits
aggregating at least $100,000,000 and whose certificates of
deposit of such maturity are, at the time of acquisition thereof
by the Company or a Restricted Subsidiary, rated A-1 or better by
Standard & Poor's Corporation or Prime-1 or better by Moody's
Investors Service, Inc.;
(f) Investments in Eurodollar deposits maturing within
one year from the date of issuance thereof, and issued by a bank
or trust company, having capital, surplus and undistributed
profits aggregating at least $1,000,000,000 and whose deposits of
such type are, at the time of acquisition thereof by the Company
or a Restricted Subsidiary, rated A-1 or better by Standard &
Poor's Corporation or Prime-1 or better by Moody's Investors
Service, Inc.;
(g) loans or advances, not exceeding $500,000 in the
aggregate outstanding at any one time, in the usual and ordinary
course of business to officers, directors and employees for
expenses (including moving expenses related to a transfer)
incidental to carrying on the business of the Company or any
Restricted Subsidiary;
(h) receivables arising from the sale of goods and
services in the ordinary course of business of the Company and
its Restricted Subsidiaries and receivables arising from the sale
of fixed assets in an amount not to exceed $2,000,000 outstanding
at any time during the calendar year ending December 31, 1994, or
$1,000,000 outstanding at any time during the calendar year
ending December 31, 1995;
(i) Investments in repurchase agreements maturing within
30 days from the date of acquisition thereof, with respect to
obligations of the type described in paragraph (d) above entered
into with a bank or trust company organized under the laws of the
United States or any state thereof and meeting the requirements
of paragraph (e) above;
(j) Investments not otherwise permitted by this Section
4.12 in an aggregate amount not to exceed $1,000,000 in accounts
held by a bank or trust company and which are applied in the
ordinary course of business to pay obligations or expenses of the
Company or a Restricted Subsidiary;
(k) Investments not otherwise permitted by this Section
4.12 in non-interest bearing demand deposit accounts of a bank or
trust company not exceeding $5,000,000 in the aggregate
outstanding at any one time;
(l) Investments in accounts held by a bank or trust
company, which accounts and the Investments therein are fully
insured by the Federal Deposit Insurance Company, the Federal
Savings and Loan Insurance Corporation or the Securities Investor
Protection Corporation; and
(m) Investments made within the limitations of Section
4.11.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 4.12, such Investments
shall be taken at the original cost thereof, without allowance
for any subsequent write-offs or appreciation or depreciation
therein, but less any amount repaid or recovered on account of
capital or principal.
For purposes of this Section 4.12, at any time when a
corporation becomes a Restricted Subsidiary, all Investments of
such corporation at such time shall be deemed to have been made
by such corporation, as a Restricted Subsidiary, at such time.
Section 4.13. Mergers, Consolidations and Sales of
Assets. (a) The Company will not, and will not permit any
Restricted Subsidiary to, (i) consolidate with or be a party to a
merger with any other corporation or (ii) sell, lease or
otherwise dispose of all or any Substantial Part (as defined in
paragraph (d) of this Section 4.13) of the assets of the Company
and its Restricted Subsidiaries; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate
with or into the Company or any Wholly-owned Restricted
Subsidiary so long as in any merger or consolidation involving
the Company, the Company shall be the surviving or continuing
corporation;
(2) the Company may consolidate or merge with, or sell
all or substantially all of its assets to, any other corporation
if (i) either (A) the Company shall be the surviving or
continuing corporation, or (B) if the Company is not the
surviving or continuing corporation, or the corporation to which
such assets are sold, the corporation (hereinafter called the
"Surviving Company") formed by such consolidation or the
corporation into which the Company shall have been merged or to
which all or substantially all of such assets are sold shall (w)
be a corporation organized under the laws of the United States or
any State thereof, (x) have a majority of its assets in the
United States, (y) have expressly and unconditionally assumed by
a written instrument reasonably satisfactory in form and
substance to the Holders the due and punctual payment of the
principal of and interest and premium, if any, on the Notes and
the due and punctual performance of all the covenants and
conditions of this Agreement, the Indenture and the Mortgages and
(z) have furnished the Holders an opinion of counsel reasonably
satisfactory in form and substance to such Holders to the effect
that the instrument has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract
and agreement of the Surviving Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally,
and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in
equity or at law), (ii) at the time of such consolidation, merger
or sale and after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, (iii) after giving
effect to such consolidation, merger or sale, the Company or the
Surviving Company, as the case may be, would be permitted to
incur at least $1.00 of additional Debt for Borrowed Money under
the provisions of Section 4.8 and (iv) after giving effect to
such consolidation, merger or sale, the Notes would have an
equivalent or better credit rating than the rating of the Notes
on the Closing Date as determined by the National Association of
Insurance Commissioners and either Standard & Poor's Corporation,
Moody's Investors Service, Inc., Duff & Phelps Credit Rating Co.
or Fitch Investors Service, Inc., and the Company shall have
provided evidence of such rating to the Holders; and
(3) any Restricted Subsidiary may sell, lease or
otherwise dispose of all or any Substantial Part of its assets to
the Company or any Wholly-owned Restricted Subsidiary.
(b) The Company will not permit any Restricted
Subsidiary to issue or sell any shares of stock of any class
(including as "stock" for the purposes of this Section 4.13, any
warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into
stock) of such Restricted Subsidiary to any Person other than the
Company or a Wholly-owned Restricted Subsidiary, except for the
purpose of qualifying directors, or except in satisfaction of the
preemptive rights of minority shareholders existing prior to the
Closing Date in connection with the simultaneous issuance of
stock to the Company and/or a Restricted Subsidiary whereby the
Company and/or such Restricted Subsidiary maintain their same
proportionate interest in such Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise
dispose of any shares of stock of any Restricted Subsidiary
(except to qualify directors) or any Indebtedness of any
Restricted Subsidiary, and will not permit any Restricted
Subsidiary to sell, transfer or otherwise dispose (in either
case, except to the Company or a Wholly-owned Restricted
Subsidiary) of any shares of stock or any Indebtedness of any
other Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or
disposition, all shares of stock of such Restricted Subsidiary at
the time owned by the Company and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as an
entirety;
(2) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
proposed sale, transfer or disposition of said shares of stock
and Indebtedness is in the best interests of the Company;
(3) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person, for a
consideration and on terms reasonably deemed by the Board of
Directors to be adequate and satisfactory and, in any event, not
less than the fair market value thereof;
(4) the Restricted Subsidiary being disposed of shall
not have any continuing investment in the Company or any other
Restricted Subsidiary not being simultaneously disposed of; and
(5) such sale or other disposition does not involve a
Substantial Part of the assets of the Company and its Restricted
Subsidiaries.
(d) As used in this Section 4.13, a sale, lease or other
disposition of assets shall be deemed to be a Substantial Part of
the assets of the Company and its Restricted Subsidiaries if the
book value of such assets, when added to the book value of all
other assets sold, leased or otherwise disposed of by the Company
and its Restricted Subsidiaries (other than in the ordinary
course of business) (A) during the 12-month period ending on the
date of such sale, lease or other disposition, exceeds 10% of
Consolidated Total Assets, determined as of the end of the
immediately preceding fiscal year, or (B) during the period
commencing on the Closing Date and ending on the date of such
sale, lease or other disposition, exceeds 25% of Consolidated
Total Assets, determined as of the end of the immediately
preceding fiscal year.
Section 4.14. Guaranties. The Company will not, and will
not permit any Restricted Subsidiary to, become or be liable in
respect of any Guaranty except (i) Guaranties by the Company or
any Restricted Subsidiary which are limited in amount to a stated
maximum dollar exposure, (ii) Guaranties by the Company of
performance obligations of any Restricted Subsidiary and
(iii) Specified Guaranties.
Section 4.15. Repurchase of Notes. Neither the Company nor
any Restricted Subsidiary or Affiliate which is acting on behalf
of, or in concert with the Company, directly or indirectly, may
repurchase or make any offer to repurchase any Notes unless an
offer has been made to repurchase Notes, pro rata, from all
Holders at the same time and upon the same terms. In case the
Company or any Subsidiary repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be canceled and no
Notes shall be issued in substitution therefor. Without limiting
the foregoing, upon the repurchase or other acquisition of any
Notes by the Company, any Restricted Subsidiary or any Affiliate
(or upon the agreement of Company, any Restricted Subsidiary or
any Affiliate to purchase or otherwise acquire the Notes), such
Notes shall no longer be outstanding for purposes of any section
of this Agreement or the Indenture relating to the taking by the
Holders of any actions with respect hereto, including, without
limitation, Section 5.1 and Sections 6.3, 6.4 and 8.2 of the
Indenture.
Section 4.16. Transactions with Affiliates. The Company
will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate),
except in the ordinary course of and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than could obtain in a
comparable arm's-length transaction with a Person other than an
Affiliate.
Section 4.17. Termination of Pension Plans. The Company
will not and will not permit any Subsidiary to withdraw from any
Multiemployer Plan or permit any employee benefit plan maintained
by it to be terminated if such withdrawal or termination could
reasonably be expected to result in withdrawal liability (as
described in Part 1 of Subtitle E of Title IV of ERISA) or the
imposition of a Lien on any property of the Company or any
Subsidiary pursuant to Section 4068 of ERISA.
Section 4.18. Reports and Rights of Inspection. The
Company will keep, and will cause each Restricted Subsidiary to
keep, proper books of record and account in which full and
correct entries will be made of all dealings or transactions of,
or in relation to, the business and affairs of the Company or
such Restricted Subsidiary, in accordance with GAAP consistently
applied (except for changes disclosed in the financial statements
furnished to the Holders pursuant to this Section 4.18 and
concurred in by the independent public accountants referred to in
Section 4.18(b) hereof), and will furnish to each Institutional
Holder (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. Within 45 days after the end
of each quarterly fiscal period (except the last) of each fiscal
year, copies of:
(1) consolidated and consolidating balance sheets of the
Company and its Restricted Subsidiaries as of the close of such
quarterly fiscal period, setting forth in comparative form the
consolidated figures for the fiscal year then most recently
ended,
(2) consolidated and consolidating statements of income
of the Company and its Restricted Subsidiaries for such quarterly
fiscal period and for the portion of the fiscal year ending with
such quarterly fiscal period, in each case setting forth in
comparative form the consolidated figures for the corresponding
periods of the preceding fiscal year, and
(3) consolidated statements of cash flows of the Company
and its Restricted Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding
period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by
an authorized financial officer of the Company;
(b) Annual Statements. Within 90 days after the close
of each fiscal year of the Company, copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year,
(2) consolidated statements of income and retained
earnings and cash flows of the Company and its Restricted
Subsidiaries for such fiscal year, and
(3) consolidating balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year and
consolidating statements of income and retained earnings of the
Company and its Restricted Subsidiaries for such fiscal year;
in the case of items (1) and (2) above, setting forth in
comparative form the consolidated figures for the preceding
fiscal year, all in reasonable detail and accompanied by a report
thereon (without limitation as to scope or qualification as to
the Company's status as a going concern) of a firm of independent
public accountants of recognized national standing selected by
the Company to the effect that the consolidated financial
statements present fairly, in all material respects, the
consolidated financial position of the Company and its Restricted
Subsidiaries as of the end of the fiscal year being reported on
and the consolidated results of the operations and cash flows for
said year in conformity with GAAP and that the examination of
such accountants in connection with such financial statements has
been conducted in accordance with generally accepted auditing
standards and included such tests of the accounting records and
such other auditing procedures as said accountants deemed
necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one
copy of each interim or special audit made by independent
accountants of the books of the Company or any Restricted
Subsidiary and any management letter received from such
accountants;
(d) SEC and Other Reports. Promptly upon their becoming
available (or in the case of items (i) and (ii), when they become
generally available), one copy of:
(i) each financial statement, report, notice or
proxy statement sent by the Company to stockholders
generally;
(ii) each regular or periodic report, and any
registration statement or final prospectus, filed by the
Company or any Subsidiary with any securities exchange or
the Securities and Exchange Commission or any successor
agency;
(iii) any orders in any judicial or administrative
proceedings to which the Company or any of its Subsidiaries
is a party, issued by any governmental agency, Federal or
state, having jurisdiction over the Company or any of its
Subsidiaries; and
(iv) any notice of investigation received by the
Company or any Restricted Subsidiary with respect to any
Facility which it owns or operates, other than for routine
investigations not related to any specific concern with
respect to such Facility.
(e) ERISA Reports. Within a reasonable time after
becoming aware of the occurrence thereof, written notice of (i) a
Reportable Event with respect to any Plan, except a Reportable
Event with respect to which the 30-day notice requirement has
been waived by the PBGC (provided that the loss of qualification
of a Plan and the failure to meet the minimum funding standards
of Section 412 of the Code or Section 302 of ERISA shall be a
Reportable Event for this purpose regardless of the issuance of
any waiver of the notice requirement by the PBGC); (ii) the
institution of any steps by the Company, any ERISA Affiliate, the
PBGC or any other person to terminate any Plan pursuant to
Section 4041 of ERISA; (iii) the institution of any steps by the
Company or any ERISA Affiliate to withdraw from any Multiemployer
Plan; (iv) a non-exempt "prohibited transaction" within the
meaning of Section 406 of ERISA in connection with any Plan;
(v) any material increase in the contingent liability of the
Company or any Restricted Subsidiary with respect to any
post-retirement welfare liability; or (vi) the receipt of notice
of any action by the Internal Revenue Service, the Department of
Labor or the PBGC with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods provided
in paragraphs (a) and (b) above, a certificate of an authorized
financial officer of the Company stating that such officer has
reviewed the provisions of this Agreement, the Indenture and the
Mortgages and setting forth: (i) the information and
computations (in sufficient detail) required in order to
establish whether the Company was in compliance with the
requirements of Section 4.6 through Section 4.13 at the end of
the period covered by the financial statements then being
furnished, and (ii) whether there existed as of the date of such
financial statements and whether, to the best of such officer's
knowledge, there exists on the date of the certificate or existed
at any time during the period covered by such financial
statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate or
existed during such period, specifying the nature and period of
existence thereof and the action the Company has taken, is taking
and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the accountants
who render an opinion with respect to such financial statements,
stating that they have reviewed Sections 4.6 through 4.9 this
Agreement and stating further whether, in making their audit,
such accountants have become aware of any default under any of
the terms or provisions Sections 4.6 through 4.9 of this
Agreement insofar as any such terms or provisions pertain to or
involve accounting matters or determinations, and if any such
condition or event then exists, specifying the nature and period
of existence thereof;
(h) Change in Fiscal Year. Within 15 days after
adopting a change in the fiscal year of the Company, the Company
shall give written notice to each Holder stating the new fiscal
year of the Company and when such change shall become effective;
(i) Occupancy Statistics. Within 45 days after the end
of each quarterly fiscal period of the Company, a statement of
the
average daily occupancy of each Mortgaged Facility for such
fiscal quarter;
(j) Notices from Regulatory Agencies. Within 45 days
after the end of each quarterly fiscal period of the Company, a
list of the notices issued by any Federal or state governmental
or regulatory agency threatening loss of certification or
licensure for operation of any Facility owned by the Company or
any Restricted Subsidiary and the status of the proceedings with
respect to such notices.
(k) Projections of Financial Performance; Comparison of
Actual and Projected Results. Not more than 45 days nor less
than 15 days prior to the commencement of each fiscal year of the
Company, copies of a consolidated balance sheet, statement of
income and statement of cash flows of the Company and its
Restricted Subsidiaries prepared by the Company reflecting its
projections of financial performance for the immediately
succeeding fiscal year; and within 90 days after the close of
each fiscal year a comparison of actual results to performance
projected in the most recent projections delivered to the Holders
pursuant to this clause (j);
(l) Notice of Litigation and Proceedings. Within 90
days after the end of each fiscal year of the Company, notice to
the Holders of (a) any litigation or proceeding in which the
Company is a party if an adverse decision could reasonably be
expected to require the Company to pay more than $200,000 or to
deliver assets the value of which exceeds $200,000, whether or
not the claim is considered to be covered by insurance and (b)
the institution of any other suit or proceeding that could,
individually or in the aggregate with other suits and
proceedings, reasonably be expected to have a material adverse
effect on the properties, business, profits or condition
(financial or otherwise) of the Company or any Restricted
Subsidiary; and
(m) Requested Information. With reasonable promptness,
such other data and information as such Institutional Holder
may reasonably request.
Without limiting the foregoing, the Company will permit each
Institutional Holder (or such Persons as such Institutional
Holder may designate), after reasonable advance notice to visit
and inspect any of the properties of the Company or any
Restricted Subsidiary, to examine all of their books of account,
records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and
accounts with their respective officers, employees, and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss with any Institutional
Holder the finances and affairs of the Company and its Restricted
Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. The Company shall be required to pay or
reimburse (i) one representative of the Holders for expenses
which such representative incurs in connection with one such
visitation per fiscal year if no Default or Event of Default
existed during such fiscal year and (ii) all Holders for expenses
which such Holders or their representative incur in connection
with any visitation made during any period when a Default or an
Event of Default has occurred and is continuing.
Each Holder, by its acceptance of the Notes, agrees that
with respect to any data and information received by such Holder
in writing pursuant to the foregoing provisions of this Section
4.18 or obtained by such Holder in writing as a result of any
request pursuant to paragraph (m), to the extent that such data
and information has not theretofore otherwise been disclosed in
such a manner as to render such data and information no longer
confidential and such data and information is designated in
writing as confidential by the Company, such Holder will use its
reasonable efforts (consistent with its customary procedures) to
reasonably maintain (and cause persons referred to in (i) below
to reasonably maintain) the confidential nature of the data and
information therein contained; provided, however, that anything
herein contained to the contrary notwithstanding, such Holder
may, to the extent necessary, disclose or disseminate such data
and information to: (i) its or its subsidiaries directors,
employees, agents, attorneys, advisors, trustees, affiliates and
accountants who would ordinarily have access to such data and
information in the normal course of the performance of their
duties relating to the ownership of the Notes; (ii) such third
parties as it may, in its discretion, deem reasonably necessary
or desirable in connection with or in response to (x) compliance
with any law, ordinance or governmental order, regulation, rule,
policy, subpoena, investigation, regulatory authority order or
request, or (y) any order, decree, judgment, subpoena, notice of
discovery or similar ruling or pleading issued, filed, served or
purported on its face to be issued, filed or served (A) by or
under authority of any court, tribunal, arbitration board of any
governmental or industry agency, commission, authority, board or
similar entity or (B) in connection with any proceeding, case or
matter pending (or on its face purported to be pending) before
any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity; (iii) any
prospective purchaser, securities broker or dealer or investment
banker in connection with the resale or proposed resale by such
Holder of any portion of the Notes who shall agree in writing to
accept such information subject to the provisions of this
paragraph; (iv) any Person holding debt Securities of such Holder
who, subject to the provisions of this paragraph, shall have
requested to inspect such information; (v) the United States
National Association of Insurance Commissioners or similar
regulatory bodies; and (vi) any entity utilizing such information
to rate or classify such Holder's debt or equity Securities or to
report to the public concerning the industry of which such Holder
is a part; provided, however, that such Holder shall not be
liable to the Company or any other Person for damages arising
from the disclosure of non-public information if such Holder's
reasonable efforts were in accordance with the provisions of this
paragraph.
Section 4.19. Limitation on Payment Restrictions
Affecting Restricted Subsidiaries. The Company shall not permit
any Restricted Subsidiary to create or otherwise suffer to exist
or become effective any consensual encumbrance or restriction
which restricts the ability of any such Restricted Subsidiary to
(i) pay dividends or make any other distributions on such
Restricted Subsidiary's capital stock, (ii) pay any Indebtedness
owed to the Company or any other Restricted Subsidiary or
(iii) transfer any of its property or assets to the Company or
any other Restricted Subsidiary.
Section 4.20. New Restricted Subsidiaries. The Company
shall cause any corporation which becomes a Restricted Subsidiary
from and after the Closing Date to enter into the Guaranty
Assumption Agreement attached as Exhibit 1 to the Guaranty
Agreement.
Section 5. Amendments, Waivers and Consents.
Section 5.1. Consent Required. Any term, covenant,
agreement or condition of this Agreement may, with the consent of
the Company, be amended or compliance therewith may be waived
(either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have
obtained the consent in writing of the Holders holding at least
51% in aggregate principal amount of outstanding Notes; provided
that without the written consent of all of the Holders, no such
amendment or waiver shall be effective which will change the
percentage of Holders required to consent to any such amendment
or waiver of any of the provisions of Section 4.15 or this
Section 5.
Section 5.2. Effect of Amendment or Waiver. Any such
amendment or waiver shall apply equally to all of the Holders and
shall be binding upon them, upon each future Holder and upon the
Company, whether or not such Note shall have been marked to
indicate such amendment or waiver. No such amendment or waiver
shall extend to or affect any obligation not expressly amended or
waived or impair any right consequent thereon.
Section 6. Interpretation of Agreement; Definitions.
Section 6.1. Definitions. Unless the context otherwise
requires, the terms hereinafter set forth when used herein shall
have the following meanings and the following definitions shall
be equally applicable to both the singular and plural forms of
any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company, (ii) which beneficially owns or holds
5% or more of any class of the Voting Stock of the Company or
(iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement.
"Appraisal" shall mean a full and narrative written opinion
of the fair market value of each of the Mortgaged Facilities made
by Valuation Counselors Group, Inc. or any other independent
appraiser acceptable to the holders of the Notes, in accordance
with the standards of the professional appraisal society of which
such company is a member, and which Appraisal shall include the
income and comparable sales approaches to value.
"Appraisal Value" shall mean the fair market value of one
or more Mortgaged Facilities as set forth in an Appraisal.
"Basket Debt" of the Company and its Restricted
Subsidiaries shall mean, as of the date of any determination
thereof, an amount equal to the sum of (i) the aggregate unpaid
principal amount of Debt for Borrowed Money of Restricted
Subsidiaries plus (but without duplication) (ii) the aggregate
amount of all Indebtedness of the Company or any Restricted
Subsidiary secured by Liens other than Liens permitted by Section
4.10(a) through (g); provided, however, that "Basket Debt" shall
not include any Specified Debt.
"Business Day" shall mean any day other than a Saturday,
Sunday or a legal holiday for banks in (i) the city and state in
which the Company's primary bank is located, (ii) the city and
state in which the principal place of business of the Indenture
Trustee is located or (iii) the city and state in which the
Indenture Trustee receives and disburses funds (as of the Closing
Date, Boston, Massachusetts).
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its subsidiaries in
accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the
date of any determination thereof the amount at which the
aggregate Rentals due and to become due under all Capitalized
Leases under which such Person is a lessee would be reflected as
a liability on a consolidated balance sheet of such Person.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company" shall mean Care Enterprises, Inc., a Delaware
corporation, and any Person who succeeds to all, or substantially
all, of the assets and business of Care Enterprises, Inc.
"Consolidated Current Assets" and "Consolidated Current
Liabilities" shall mean as of the date of any determination
thereof such assets and liabilities of the Company and its
Restricted Subsidiaries on a consolidated basis as shall be
determined in accordance with GAAP to constitute current assets
and current liabilities, respectively.
"Consolidated Debt for Borrowed Money" shall mean, as of
the date of determination thereof, all Debt for Borrowed Money of
the Company and its Restricted Subsidiaries determined on a
consolidated basis eliminating intercompany items.
"Consolidated Net Income" for any period shall mean the
gross revenues of the Company and its Restricted Subsidiaries for
such period less all expenses and other proper charges (including
taxes on income but excluding charges in lieu of income taxes),
determined on a consolidated basis after eliminating earnings or
losses attributable to outstanding Minority Interests, but
excluding in any event:
(a) any gains or losses on the sale or other disposition
of Investments or fixed or capital assets, and any taxes on such
excluded gains and any tax deductions or credits on account of
any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other
than a Restricted Subsidiary), substantially all the assets of
which have been acquired in any manner by the Company or any
Restricted Subsidiary, realized by such corporation prior to the
date of such acquisition;
(e) net earnings and losses of any corporation (other
than a Restricted Subsidiary) with which the Company or a
Restricted Subsidiary shall have consolidated or which shall have
merged into or with the Company or a Restricted Subsidiary prior
to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest unless such net earnings
shall have actually been received by the Company or such
Restricted Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of
dividends to the Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation
or write-up of assets;
(i) any deferred or other credit representing any excess
of the equity in any Subsidiary at the date of acquisition
thereof over the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any
Securities of the Company or any Restricted Subsidiary; and
(k) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall have
been established (i) from income arising during such period or
(ii) in the ordinary course of the Company's or any Restricted
Subsidiary's business.
"Consolidated Shareholders' Equity" shall mean as of the
date of any determination the sum of capital stock, additional
paid-in capital and retained earnings of the Company and its
Restricted Subsidiaries determined in accordance with GAAP on a
consolidated basis.
"Consolidated Tangible Net Worth" shall mean as of the date
of any determination thereof Consolidated Shareholders' Equity
less all Intangible Assets of the Company and its Restricted
Subsidiaries.
"Consolidated Total Assets" shall mean as of the date of
any determination thereof, the net book value of total assets of
the Company and its Restricted Subsidiaries as of such date
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean, as of any
date of determination thereof, the sum of Consolidated Tangible
Net Worth plus Consolidated Debt for Borrowed Money.
"Debt for Borrowed Money" of any Person shall mean and
include (i) all Indebtedness of such Person for borrowed money or
which has been incurred in connection with the acquisition of
property or assets, (ii) all Capitalized Rentals of such Person,
(iii) all Guaranties by such Person of Debt for Borrowed Money of
others (other than Specified Guaranties which (x) remain a
contingent liability or (y) with respect to which the Company has
assumed directly the obligations for Rentals) and all
reimbursement obligations in respect of credit enhancement
instruments, including letters of credit and bankers' acceptances
(excluding letters of credit and surety bonds issued in the
ordinary course of business and reflected as a current liability
on such Person's balance sheet or which secure the payment of
sums which are so reflected as a current liability), (iv)
obligations (other than nonrecourse obligations) arising in
connection with any sale of accounts receivable and (v)
obligations secured by any Lien upon property or assets owned by
such Person whether or not such Person has assumed or become
liable for the payment of such obligations.
"Default" shall mean any event or condition the occurrence
of which would, with the lapse of time or the giving of notice,
or both, constitute an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each case as
in effect from time to time. References to sections of ERISA
shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or
business that is, along with the Company, a member of a
controlled group of corporations or a controlled group of trades
or businesses, as described in section 414(b) and 414(c),
respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in
Section 6.1 of the Indenture.
"Facility" shall mean a skilled nursing home, intermediate
care facility, retirement or convalescent living center or home
for the mentally retarded or other facility providing residential
health care owned by the Company.
"Fixed Charges" for any period shall mean on a consolidated
basis the sum of (i) all Rentals (other than Rentals on
Capitalized Leases) payable during such period by the Company and
its Restricted Subsidiaries, and (ii) all Interest Charges on all
Indebtedness (including the interest component of Rentals on
Capitalized Leases) of the Company and its Restricted
Subsidiaries.
"GAAP" shall mean generally accepted accounting principles
at the time in the United States.
"Guaranties" by any Person shall mean all obligations
(other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance
sheet condition or otherwise to advance or make available funds
for the purchase or payment of such Indebtedness or obligation,
(iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in
respect thereof. For the purposes of all computations made under
this Agreement, a Guaranty in respect of any Indebtedness for
borrowed money shall be deemed to be Indebtedness equal to the
outstanding principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any
other obligation or liability or any dividend shall be deemed to
be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
"Holder" shall mean any Person which is, at the time of
reference, the registered Holder of any Note.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with GAAP shall be
classified upon a balance sheet of such Person as liabilities of
such Person, and in any event shall include all (i) obligations
of such Person for borrowed money or which has been incurred in
connection with the acquisition of property or assets,
(ii) obligations secured by any Lien upon property or assets
owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale
or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement
in the event of default are limited to repossession or sale of
property, (iv) Capitalized Rentals, (v) Guaranties of obligations
of others of the character referred to in this definition and all
reimbursement obligations in respect of credit enhancement
instruments, including letters of credit and bankers' acceptances
(excluding letters of credit and surety bonds issued in the
ordinary course of business and reflected as a current liability
on such Person's balance sheet or which secure payment of sums
which are so reflected as a current liability) and
(vi) obligations (other than nonrecourse obligations) arising in
connection with the sale of accounts receivable.
"Indenture" shall have the meaning set forth in Section
1.1.
"Indenture Trustee" shall mean State Street Bank and Trust
Company of Connecticut, National Association and its successors
in trust under the Indenture.
"Institutional Holder" shall mean any Purchaser or an
insurance company, bank, savings and loan association, trust
company, investment company, charitable foundation, employee
benefit plan (as defined in ERISA) or other institutional
investor or financial institution and, for purposes of the direct
payment provisions of this Agreement, shall include any nominee
of any such Holder.
"Intangible Assets" shall mean, as of the date of any
determination thereof, goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense and
the excess of cost of shares acquired over book value of related
assets and all other assets of the Company and its Restricted
Subsidiaries which are properly classified as "intangible assets"
in accordance with GAAP.
"Interest Charges" for any period shall mean all interest
and all amortization of debt discount and expense on any
particular Indebtedness for which such calculations are being
made.
"Investments" shall mean all investments, in cash or by
delivery of property made, directly or indirectly in any Person,
whether by acquisition of shares of capital stock, indebtedness
or other obligations or Securities or by loan, advance, capital
contribution or otherwise; provided, however, that "Investments"
shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Leases" shall mean those certain Skilled Nursing Facility
Leases, each dated as of December 15, 1993 between the Company,
as lessor, the Restricted Subsidiary named therein, as lessee.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner
of the property, whether such interest is based on the common
law, statute or contract, and including but not limited to the
security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances (including, with respect
to stock, stockholder agreements, voting trust agreements,
buy-back agreements and all similar arrangements) affecting
property. For the purposes of this Agreement, the Company or a
Restricted Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant
to which title to the property has been retained by or vested in
some other Person for security purposes and such retention or
vesting shall constitute a Lien.
"Make-Whole Amount" shall have the meaning set forth in
Section 1.2 of the Indenture.
"Minority Interests" shall mean any shares of stock of any
class of a Restricted Subsidiary (other than directors'
qualifying shares as required by law) that are not owned by the
Company and/or one or more of its Restricted Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater,
and by valuing Minority Interests constituting common stock at
the book value of capital and surplus applicable thereto
adjusted, if necessary, to reflect any changes from the book
value of such common stock required by the foregoing method of
valuing Minority Interests in preferred stock.
"Mortgaged Facility" shall mean a Facility owned by the
Company which is described in Exhibit K hereto on which a first
Lien has been conveyed and remains pursuant to one of the
Mortgages.
"Mortgages" shall mean those certain Mortgage and Security
Agreements and Deeds of Trust, each dated as of December 1, 1993,
from the Company to the Indenture Trustee.
"Multiemployer Plan" shall have the same meaning as in
Section 3(37) of ERISA.
"Net Income Available for Fixed Charges" for any period
shall mean the sum of (i) Consolidated Net Income during such
period, plus (to the extent deducted in determining Consolidated
Net Income) (ii) all provisions for any Federal, state or other
income taxes made by the Company and its Restricted Subsidiaries
during such period and (iii) Fixed Charges of the Company and its
Restricted Subsidiaries during such period.
"PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, and a
government or agency or political subdivision thereof.
"Plan" means a "pension plan," as such term is defined in
Section 3(2) of ERISA, established or maintained by the Company
or any ERISA Affiliate or as to which the Company or any ERISA
Affiliate contributed or is a member or otherwise may have any
liability.
"Purchasers" shall have the meaning set forth in the
introductory language of this Agreement.
"Rentals" shall mean and include as of the date of any
determination thereof all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
the Company or a Restricted Subsidiary, as lessee or sublessee
under a lease of real or personal property (including any amounts
required to be paid by the Company or a Restricted Subsidiary to
the lessor whether or not designated as rents or additional rents
on account of maintenance, repairs, insurance, taxes and similar
charges). Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if
any, required to be paid by the lessee regardless of sales volume
or gross revenues.
"Reportable Event" shall have the same meaning as in
Section 4043 of ERISA.
"Responsible Officer" shall mean the person holding the
office of the President, any Corporate Vice President, Chief
Financial Officer, Secretary, Assistant Secretary or Treasurer of
the Company.
"Restricted Investments" shall mean all Investments, other
than Investments described in clauses (a) through (j) of Section
4.12.
"Restricted Subsidiary" shall mean any Subsidiary (i) which
is organized under the laws of the United States or any State
thereof; (ii) which conducts substantially all of its business
and has substantially all of its assets within the United States;
(iii) of which more than 51% (by number of votes) of the Voting
Stock is beneficially owned, directly or indirectly, by the
Company; (iv) which is actively involved in conducting a
business; and (v) which owns assets having a fair market value of
not less than $100,000 (as determined by the Company).
"Security" shall have the same meaning as in Section 2(1)
of the Securities Act of 1933, as amended.
"Specified Debt" shall mean the Debt for Borrowed Money
indicated by an asterisk on Annex B to Exhibit A.
"Specified Guaranties" shall mean the obligations of the
Company or any Restricted Subsidiary in respect of operating
leases which are in effect as of the Closing Date and which have
been subleased to a third party.
The term "subsidiary" shall mean as to any particular
parent corporation any corporation of which more than 50% (by
number of votes) of the Voting Stock shall be beneficially owned,
directly or indirectly, by such parent corporation. The term
"Subsidiary" shall mean a subsidiary of the Company.
"Substantial Part" shall have the meaning set forth in
Section 4.13(d).
"Voting Stock" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary
shall mean a Subsidiary of which all of the issued and
outstanding shares of stock (except shares required as directors'
qualifying shares) and all Debt for Borrowed Money (other than
the Specified Debt) shall be owned by the Company and/or one or
more of its Wholly-owned Subsidiaries.
Section 6.2. Accounting Principles. Where the character
or amount of any asset or liability or item of income or expense
is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of
this Agreement, the same shall be done in accordance with GAAP,
to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
Section 6.3. Directly or Indirectly; Independence of
Covenants. Where any provision in this Agreement refers to an
action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by
such Person. Each covenant of this Agreement is to be given
independent effect so that if an action is prohibited by a
covenant, the fact it would be permitted by another covenant will
not avoid the occurrence of an Event of Default if such action is
taken.
Section 7. Miscellaneous.
Section 7.1. Registration, Transfer and Exchange of
Notes. The Notes shall be issued as registered Notes and will be
subject to transfer, substitution and exchange as set forth in
the Indenture.
Section 7.2. Direct Payment. Notwithstanding
anything to the contrary contained in this Agreement, the
Indenture, the Mortgages or the Notes, in the case of any Note
owned by any Holder that is a Purchaser or any other
Institutional Holder which has given written notice to the
Company requesting that the provisions of this Section 7.2 shall
apply, the Company will cause the Indenture Trustee to pay when
due the principal thereof, interest thereon and premium, if any,
due with respect to said principal, without any presentment
thereof, directly to such Holder at its address set forth in
Schedule II or such other address as such Holder may from time to
time designate in writing to the Company or, if a bank account
with a United States bank is so designated for such Holder, the
Company will make such payments in immediately available funds to
such bank account, marked for attention as indicated, or in such
other manner or to such other account in any United States bank
as such Holder may from time to time direct in writing; provided
that such notice shall have been received by the Indenture
Trustee at least 30 days before such payment is due.
Section 7.3. Expenses, Stamp Tax Indemnity. (a) Whether
or not the transactions herein or in the Indenture contemplated
shall be consummated, the Company agrees to pay directly all of
the Purchasers' out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement, the
Indenture and the Mortgages and the transactions contemplated
hereby, including but not limited to the reasonable charges and
disbursements of Chapman and Cutler, special counsel to the
Purchasers, O'Melveny & Myers, special counsel to SunAmerica
Investments, Inc. The Company agrees to pay all expenses of the
Holders (including, without limitation the charges and
disbursements of one firm to act as counsel to the Holders)
relating to any amendment, waivers or consents pursuant to the
provisions hereof, except as provided in paragraph (b) of this
Section 7.3. The Company also agrees that it will pay and save
each Purchaser harmless against any and all liability with
respect to stamp and other taxes, if any, which may be payable or
which may be determined to be payable in connection with the
execution and delivery of this Agreement, the Indenture, any
Mortgage or the Notes, whether or not any Notes are then
outstanding. The Company agrees to protect and indemnify each
Purchaser against any liability for any and all brokerage fees
and commissions payable or claimed to be payable to any Person in
connection with the transactions contemplated by this Agreement
and the Indenture. Notwithstanding the foregoing, SunAmerica
Investments, Inc. acknowledges that it shall not be entitled to
receive pursuant to the first sentence of this paragraph (a) more
than a total of $10,000 (including for the charges and
disbursements of its counsel) and that such amount has already
been paid by the Company to SunAmerica Investments, Inc.
Promptly after the Closing Date, SunAmerica Investments, Inc.
shall deliver to the Company the excess, if any, of $10,000 over
the amounts it is entitled to receive pursuant to the first
sentence of this paragraph (a) and a statement, describing in
reasonable detail, how such amounts were spent.
(b) The Company agrees, to the extent permitted by
applicable law, to pay and indemnify each Holder, its officers,
directors, employees and agents against any reasonable costs and
expenses, including attorneys' fees and disbursements, incurred
by such Holder in connection with any investigation, litigation
or other proceeding involving the Company (including, without
limitation, any threatened investigation or proceeding) relating
to this Agreement, the Indenture, the Mortgages or the Notes, and
enforcing its rights or remedies after a Default or an Event of
Default under this Agreement, the Indenture, the Mortgages or the
Notes or in responding to any subpoena or other legal process
issued in connection with this Agreement, the Indenture or the
transactions contemplated hereby or by reason of such Holder's
having acquired any Note, including without limitation reasonable
costs and expenses incurred in any bankruptcy case involving the
Company. The obligations of the Company under this Section 7.3
shall survive the transfer of any Note or portion thereof or
interest therein by any Holder and the payment of any Note.
Section 7.4. Notices. All communications provided for
hereunder shall be in writing and, if to a Holder, delivered or
mailed prepaid by registered or certified mail or overnight air
courier, or by facsimile communication, in each case addressed to
such Holder at its address appearing on Schedule II or such other
address as any Holder may designate to the Company in writing,
and if to the Company, delivered or mailed by registered or
certified mail or overnight air courier, or by facsimile
communication, to the Company at the address beneath its
signature at the foot of this Agreement or to such other address
as the Company may in writing designate to the Holders; provided,
however, that a notice to any party to this Agreement by
overnight air courier shall only be effective if delivered to
such party at a street address designated for such purpose in
accordance with this Section 7.4, and a notice to such party by
facsimile communication shall only be effective if made by
confirmed transmission to such party at a telephone number
designated for such purpose in accordance with this Section 7.4
and promptly followed by the delivery of such notice by
registered or certified mail or overnight air courier, as set
forth above.
Section 7.5. Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the Company and its
successors and assigns and shall inure to the benefit of each
Purchaser and its successor and assigns, including each
successive Holder.
Section 7.6. Survival of Covenants and Representations.
All covenants, representations and warranties made by the Company
herein and in any certificates delivered pursuant hereto, whether
or not in connection with the Closing Date, and the
representations and warranties made by the Purchasers herein
shall survive the closing and the delivery of this Agreement and
the Notes.
Section 7.7. Severability. Should any part of this
Agreement for any reason be declared invalid or unenforceable,
such decision shall not affect the validity or enforceability of
any remaining portion, which remaining portion shall remain in
force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they
would have executed the remaining portion of this Agreement
without including therein any such part, parts or portion which
may, for any reason, be hereafter declared invalid or
unenforceable.
Section 7.8. Governing Law. This Agreement shall be
governed by and construed in accordance with New York law.
Section 7.9. Submission to Jurisdiction. The Company
hereby consents to the jurisdiction of any state or Federal court
located within the County of New York, State of New York, and
irrevocably agrees that all actions or proceedings relating to
this Agreement or the Notes may be litigated in such courts, and
the Company waives any objection which any of them may have based
on improper venue or forum non conveniens to the conduct of any
proceeding in any such court, and consents that all service of
process may be made by certified mail or messenger directed to it
at the address of the Company set forth in Section 7.4 or to its
agent referred to below at such agent's address set forth below
and that service so made shall be deemed to be completed upon the
earlier of actual receipt or the date identified on the return
receipt for the certified mailing to the Company's or such
agent's address, as the case may be, in accordance herewith. The
Company hereby irrevocably appoints CT Corporation System, with
an office on the date hereof at 1633 Broadway, New York, New York
10019, as its agent for the purpose of accepting service of any
process within the State of New York. Nothing contained in this
section shall affect the right of any holder of Notes to serve
legal process in any other manner permitted by law or to bring
any action or proceeding in the courts of any jurisdiction
against the Company or to enforce a judgment obtained in the
courts of any other jurisdiction.
Section 7.10. Captions. The descriptive headings of the
various Sections or parts of this Agreement are for convenience
only and shall not affect the meaning or construction of any of
the provisions hereof.
Section 7.11. Termination of Leases. Notwithstanding any
provision of the Mortgage to the contrary, the Company shall have
the right to terminate, modify, amend or change any or all of the
Leases and any or all of the Other Agreements (as defined in the
Mortgages); provided, however, that the provision of the Leases
acknowledging subordination to the Mortgages may not be modified,
amended or changed.
Section 7.12. Standard & Poor's Rating. The Company
hereby agrees that on or prior to March 30, 1994, it will cause
Standard & Poor's Corporation to issue an unqualified credit
rating with respect to the Notes of PPR-2 or better.
The execution hereof by the Purchasers shall constitute a
contract among the Company and the Purchasers for the uses and
purposes hereinabove set forth. This Agreement may be executed
in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
Care Enterprises, Inc.
/s/ GARY L. MASSIMINO
Its Executive Vice President
Care Enterprises, Inc.
2742 Dow Avenue
Tustin, California 92680-7245
Attention: Chief Financial Officer
Telefacsimile: (714) 544-4443 extension 2701
Confirmation: (714) 544-4443
Accepted as of December _____, 1993:
John Hancock Mutual Life
Insurance Company
/s/ STEPHEN J. BLEWITT
Its Investment Officer
Accepted as of December _____, 1993:
John Hancock Life
Insurance Company of
America
/s/ JONHATHAN P. SHEA
Its Vice President-Investments
Accepted as of December 28, 1993:
Mellon Bank, N.A., as
trustee for NYNEX
Master Pension Trust
As directed by John Hancock
Mutual Life Insurance
Company
/s/ JUDITH A. MANION
Its Judith A. Manion
Paralegal
Accepted as of December 30, 1993:
Anchor National Life
Insurance Company
/s/ LYNN A. HOPTON
Its Lynn A. Hopton
Director, Corporate Finance
Sunamerica Investment, Inc.
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants on the Closing Date to
each Purchaser as follows:
1. Subsidiaries. Annex A attached hereto states the
name of each of the Company's Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the
Company and/or its Subsidiaries. Those Subsidiaries listed in
Section 1 of said Annex A constitute Restricted Subsidiaries.
The Company and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each
Restricted Subsidiary, free and clear in each case of any Lien.
All such shares have been duly issued and are fully paid and
non-assessable.
2. Corporate Organization and Authority. The Company,
and each Restricted Subsidiary,
(a) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation;
(b) has all requisite corporate power and authority and
all necessary licenses and permits to own and operate its
Facilities and to carry on its business as now conducted, and as
presently proposed to be conducted, other than licenses the
failure to obtain which could not reasonably be expected to have
a material adverse effect on the operation of the Facilities,
individually or in the aggregate; and
(c) is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction wherein
the nature of the business transacted by it or the nature of the
property owned or leased by it makes such licensing or
qualification necessary, other than any license or qualification
the failure to obtain which could not reasonably be expected to
have a material adverse effect on the properties, business,
profits or condition (financial or otherwise) of the Company and
its Restricted Subsidiaries, taken as a whole.
3. Business and Property. Such Purchaser has
heretofore been furnished with a copy of the Private Placement
Memorandum dated August, 1993 (the "Memorandum") prepared by
Mabon Securities Corp. which generally sets forth the business
conducted by the Company and its Subsidiaries and the principal
properties of the Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance
sheets of the Company and its consolidated Subsidiaries as of
December 31 in each of the years 1990 to 1992, both inclusive,
and the statements of income and retained earnings and changes in
financial position or cash flows for the fiscal years ended on
said dates, each accompanied by a report thereon containing an
opinion unqualified as to scope limitations imposed by the
Company and otherwise without qualification except as therein
noted, by Ernst & Young, have been prepared in accordance with
GAAP consistently applied except as therein noted, are correct
and complete in all material respects and present fairly the
financial position of the Company and its Subsidiaries as of such
dates and the results of their operations and changes in their
financial position or cash flows for such periods. The unaudited
consolidated balance sheets of the Company and its consolidated
Subsidiaries as of September 30, 1993, and the unaudited
statements of income and retained earnings and cash flows for the
nine-month period ended on said date prepared by the Company have
been prepared in accordance with GAAP consistently applied except
as noted therein, are correct and complete in all material
respects and present fairly the financial position of the Company
and its consolidated Subsidiaries as of said date and the results
of their operations and changes in their financial position or
cash flows for such period, subject to customary year-end
adjustments.
(b) Since December 31, 1992, there has been no change in
the condition, financial or otherwise, of the Company and its
consolidated Subsidiaries as shown on the consolidated balance
sheet as of such date except changes in the ordinary course of
business reflected in the unaudited statements for the nine-month
period ended September 30, 1993, none of which individually or in
the aggregate has been materially adverse.
5. Indebtedness. Annex B attached hereto correctly
describes all Debt for Borrowed Money and Capitalized Leases of
the Company and its Restricted Subsidiaries outstanding as of the
Closing Date.
6. Full Disclosure. Neither the financial statements
referred to in paragraph 4 hereof nor the Agreement, the
Memorandum or any other written statement furnished by the
Company to such Purchaser in connection with the negotiation of
the sale of the Notes, contains any untrue statement of a
material fact or omits a material fact necessary to make the
statements contained therein or herein not misleading. There is
no fact peculiar to the Company or its Subsidiaries which the
Company has not disclosed to such Purchaser in writing which
individually or in the aggregate materially affects adversely
nor, so far as the Company can now foresee, will materially
affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its
Restricted Subsidiaries, taken as a whole.
7. Pending Litigation. There are no proceedings
pending or, to the knowledge of the Company, threatened against
or affecting the Company or any Restricted Subsidiary in any
court or before any governmental authority or arbitration board
or tribunal which either individually or in the aggregate could
reasonably be expected to have a material adverse effect on the
properties, business, profits or condition (financial or
otherwise) of the Company and its Restricted Subsidiaries, taken
as a whole, or which call into validity the Notes, Note
Agreements, Mortgages, the Indenture or the Leases or
transactions contemplated thereby.
8. Title to Properties. The Company and each
Restricted Subsidiary has good and marketable title in fee simple
(or its equivalent under applicable law) to all material parcels
of real property and has good title to all the other material
items of property it purports to own, including that reflected in
the most recent balance sheet referred to in paragraph 4 hereof,
except as sold or otherwise disposed of in the ordinary course of
business and except for Liens permitted by the Agreement.
9. Patents and Trademarks. The Company and each
Restricted Subsidiary owns or possesses all the patents,
trademarks, trade names, service marks, copyright, licenses and
rights with respect to the foregoing necessary for the present
conduct of its business, to the knowledge of the Company without
any known conflict with the rights of others.
10. Sale is Legal and Authorized. (a) The sale of the
Notes and compliance by the Company with all of the provisions of
the Agreement, the Indenture, the Mortgages, the Leases and the
Notes:
(i) are within the corporate powers of the Company; and
(ii) will not violate any provisions of any law or any
order applicable to the Company of any court or governmental
authority or agency and will not conflict with or result in any
breach of any of the terms, conditions or provisions of, or
constitute a default under the Certificate of Incorporation or
By-laws of the Company or any indenture or other agreement or
instrument to which the Company is a party or by which it may be
bound or result in the imposition of any Liens or encumbrances on
any property of the Company.
(b) The Agreement, the Indenture, the Mortgages, the
Leases and the Notes have been duly authorized by proper
corporate action on the part of the Company (no action by the
stockholders of the Company being required by law, by the
Certificate of Incorporation or By-laws of the Company or
otherwise), executed and delivered by the Company and the
Agreement, the Indenture, the Mortgages, the Leases and the Notes
constitute the legal, valid and binding obligations, contracts
and agreements of the Company enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at
law).
11. Agreements are Legal and Authorized. (a) The
compliance by each of the Guarantors with all of the provisions
of the Guaranty Agreement and the Lease:
(i) is within the corporate powers of each of the
Guarantors; and
(ii) will not violate any provisions of any law or any
order applicable to any Guarantor of any court or governmental
authority or agency and will not conflict with or result in any
breach of any of the terms, conditions or provisions of, or
constitute a default under the Certificate or Articles of
Incorporation or By-laws of any Guarantor or any indenture or
other agreement or instrument to which any Guarantor is a party
or by which it may be bound or result in the imposition of any
Liens or encumbrances on any property of any Guarantor.
(b) The Guaranty Agreement and the Leases have been duly
authorized by proper corporate action on the part of each
Guarantor (no action by the stockholders of any Guarantor being
required by law, by the Certificate or Articles of Incorporation
or By-laws of any Guarantor or otherwise), executed and delivered
by the Guarantors and the Guaranty Agreement and the Leases
constitute the legal, valid and binding obligations, contracts
and agreements of each Guarantor which is a party thereto
enforceable in accordance with its terms, subject to bankruptcy,
insolvency or similar laws affecting creditors' rights generally,
and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in
equity or at law).
12. No Defaults. No Default or Event of Default has
occurred and is continuing. Neither the Company nor any
Restricted Subsidiary is in default in the payment of principal
or interest on any Indebtedness or is in default under any
instrument or instruments or agreements under and subject to
which any Indebtedness has been issued, and no event has occurred
and is continuing under the provisions of any such instrument or
agreement which with the lapse of time or the giving of notice,
or both, would constitute an event of default thereunder.
13. Governmental Consent. No approval, consent or
withholding of objection on the part of any regulatory body,
state, Federal or local, is necessary in connection with (i) the
execution and delivery by the Company of the Agreement, the
Indenture, the Mortgages or the Notes or compliance by the
Company with any of the provisions of the Agreement, the
Indenture, the Mortgages or the Notes or (ii) the execution and
delivery by the Restricted Subsidiaries of the Guaranty Agreement
or the Leases or compliance by any Restricted Subsidiary with any
provisions of the Guaranty Agreement or the Leases.
14. Taxes. All tax returns required to be filed by the
Company or any Restricted Subsidiary in any jurisdiction have, in
fact, been filed, and all taxes, assessments, fees and other
governmental charges upon the Company or any Restricted
Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns
have been paid. For all taxable years ending on or before
December 31, 1985, the Federal income tax liability of the
Company and its Restricted Subsidiaries has been satisfied and
either the period of limitations on assessment of additional
Federal income tax has expired or the Company and its Restricted
Subsidiaries have entered into an agreement with the Internal
Revenue Service closing conclusively the total tax liability for
the taxable year. The Company does not know of any pending tax
assessments or material controversy in respect of additional
Federal or State income taxes due since said date which, if
determined adversely to the Company, could reasonably be expected
to have a material adverse effect on the business, profits or
condition (financial or otherwise) of the Company and its
Restricted Subsidiaries, taken as a whole. The provisions and
reserves for taxes on the books and records of the Company and
Restricted Subsidiaries are adequate to cover all liabilities for
taxes for all open years and the current fiscal year.
15. Use of Proceeds. The net proceeds from the sale of
the Notes will be used as set forth in Annex C. None of the
transactions contemplated in the Agreement or the Indenture
(including, without limitation thereof, the use of proceeds from
the issuance of the Notes) will violate or result in a violation
of Section 7 of the Securities Exchange Act of 1934, as amended,
or any regulation issued pursuant thereto, including, without
limitation, Regulations G, T and X of the Board of Governors of
the Federal Reserve System. Neither the Company nor any
Subsidiary owns or intends to carry or purchase any "margin
stock" within the meaning of said Regulation G. None of the
proceeds from the sale of the Notes will be used by the Company
to purchase, or refinance any borrowing the proceeds of which
were used by the Company to purchase, any "security" within the
meaning of the Securities Exchange Act of 1934, as amended.
16. Private Offering. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer
the Notes or any similar Security or has solicited or will
solicit an offer to acquire the Notes or any similar Security
from or has otherwise approached or negotiated or will approach
or negotiate in respect of the Notes or any similar Security with
any Person other than the Purchasers and not more than 45 other
institutional investors, some of whom were offered a portion of
the Notes at private sale for investment. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered
or will offer the Notes or any similar Security or has solicited
or will solicit an offer to acquire the Notes or any similar
Security from any Person so as to bring the issuance and sale of
the Notes within the provisions of Section 5 of the Securities
Act of 1933, as amended.
17. ERISA. The consummation of the transactions herein
provided and compliance by the Company with the provisions of the
Agreement, the Indenture, the Mortgages and the Notes issued
thereunder will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
Each Plan complies in all material respects with all applicable
statutes and governmental rules and regulations, and (a) no
Reportable Event has occurred and is continuing with respect to
any Plan, (b) neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or Multiemployer Plan or instituted steps
to do so, and (c) no steps have been instituted to terminate any
Plan. No condition exists or event or transaction has occurred
in connection with any Plan which could result in the incurrence
by the Company or any ERISA Affiliate of any material liability,
fine or penalty. No Plan maintained by the Company or any ERISA
Affiliate, nor any trust created thereunder, has incurred any
"accumulated funding deficiency" as defined in Section 302 of
ERISA nor does the present value of all benefits vested under all
Plans exceed, as of the last annual valuation date, the value of
the assets of the Plans allocable to such vested benefits.
Neither the Company nor any ERISA Affiliate has any contingent
liability with respect to any post-retirement "welfare benefit
plan" (as such term is defined in Section 3(1) of ERISA) except
as has been disclosed in writing to the Purchasers.
18. Licensed Facilities. (a) Each Mortgaged Facility
meets all licensing requirements of all local, state and federal
regulatory agencies having jurisdiction over such Mortgaged
Facility (other than licensing requirements the violation of
which could not reasonably be expected to have a material adverse
effect on the operation of such Mortgaged Facility) and is so
licensed (except where failure to be so licensed could not
reasonably be expected to have a material adverse effect on the
operation of such Mortgaged Facility) and each such Mortgaged
Facility is eligible for reimbursement of expenses for services
provided to patients who are eligible to receive benefits or
payments under the Medicare and Medicaid programs. Accreditation
of the Joint Commission on Accreditation of Health Care
Organizations is not required for any Mortgaged Facility in order
to obtain or maintain any license necessary to the operation of
such Mortgaged Facility or eligibility for reimbursement of
expenses for services provided to patients who are eligible to
receive benefits or payments under the Medicare and Medicaid
programs.
(b) Each skilled nursing home, intermediate care
facility, retirement or convalescent living center or home for
the mentally retarded owned or operated by the Company or any
Restricted Subsidiary (i) meets all licensing requirements of all
local, state and federal regulatory agencies having jurisdiction
over such facility (other than licensing requirements the
violation of which could not reasonably be expected to have a
material adverse effect on the operation of such facility) and is
so licensed (except where failure to be so licensed could not
reasonably be expected to have a material adverse effect on the
operation of such facility), and (ii) except in the case of the
Valley View Facility, is eligible for reimbursement of expenses
for services provided to patients who are eligible to receive
benefits or payments under the Medicare and Medicaid programs.
19. Compliance with Law. Neither the Company nor any
Restricted Subsidiary (a) is in violation of any law, ordinance,
franchise, governmental rule or regulation to which it is
subject; or (b) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business,
which violation pursuant to clause (a) or failure to obtain
pursuant to clause (b) could reasonably be expected, individually
or in the aggregate, to have a material adverse effect on the
business, profits, properties or condition (financial or
otherwise) of the Company or any of its Restricted Subsidiaries
or impair the ability of the Company to perform its obligations
contained in the Agreement, the Indenture, the Mortgages or the
Notes or the ability of a Restricted Subsidiary to perform its
obligations under the Guaranty Agreement. Neither the Company
nor any Restricted Subsidiary is in default with respect to any
order of any court or governmental authority or arbitration board
or tribunal.
20. Compliance with Environmental Laws. Neither the
Company nor any Restricted Subsidiary is in violation of any
applicable Federal, state, or local laws, statutes, rules,
regulations or ordinances relating to public health, safety or
the environment, including, without limitation, relating to
releases, discharges, emissions or disposals to air, water, land
or ground water, to the withdrawal or use of ground water, to the
use, handling or disposal of blood borne pathogens,
polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde,
to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil
or any fraction thereof, or other hydrocarbons), pollutants or
contaminants, to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances which violation
could reasonably be expected to have a material adverse effect on
the business, profits, properties or condition (financial or
otherwise) of the Company and its Restricted Subsidiaries, taken
as a whole. The Company does not know of any liability or class
of liability of the Company or any Restricted Subsidiary under
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.), or the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. Section 6901 et seq.).
Indenture of Trust
Dated as of December 15, 1993
Between
Care Enterprises, Inc.
And
State Street Bank and Trust Company of Connecticut,
National Association,
as Indenture Trustee
Table of Contents
SECTION HEADING PAGE
Parties 1
Recitals 1
Section 1. Definitions 2
Section 1.1. Generally 2
Section 1.2. Defined Terms 2
Section 2. Execution, Payment, Registration, Etc.
of Notes 5
Section 2.1. Execution of Notes 5
Section 2.2. Payment of Notes 5
Section 2.3. Form of Notes; the Register 6
Section 2.4. Transfers and Exchanges of Notes; Lost or
Mutilated Notes 6
Section 2.5. The New Notes 7
Section 2.6. Cancellation of Notes 8
Section 2.7. Indenture Trustee as Agent 8
Section 2.8. Ownership 8
Section 3. Covenants and Warranties of the Company 8
Section 3.1. Further Assurances 9
Section 3.2. Payment of Notes 9
Section 3.3. Note Agreement and Mortgage Covenants 9
Section 3.4. After-Acquired Property 9
Section 4. Possession, Use and Release of Property;
Maintenance of Collateral Value 9
Section 4.1. Possession of Collateral 9
Section 4.2. Reduction of Collateral 9
Section 4.3. Full Release of Collateral with
Consent of Holders 10
Section 5. Prepayment of Notes 10
Section 5.1. Required Prepayments 10
Section 5.2. Optional Prepayment with Premium 11
Section 5.3. Notice of Optional Prepayments 11
Section 5.4. Prepayment from Insurance Proceeds or
Condemnation Awards 11
Section 5.5. Prepayment upon Change of Control 12
Section 5.6. Application of Prepayments 14
Section 6. Events of Default and Remedies Therefor 14
Section 6.1. Events of Default 14
Section 6.2. Notice of Default 16
Section 6.3. Acceleration of Maturities 16
Section 6.4. Rescission of Acceleration 16
Section 6.5. Indenture Trustee's Rights 17
Section 6.6. Acceleration Clause 17
Section 6.7. Waiver by Company 17
Section 6.8. Effect of Sale 18
Section 6.9. Application of Sale and Other Proceeds 18
Section 6.10. Discontinuance of Remedies 19
Section 6.11. Cumulative Remedies 19
Section 7. The Indenture Trustee 19
Section 7.1. Duties of Indenture Trustee 19
Section 7.2. Indenture Trustee's Liability 20
Section 7.3. No Responsibility of Indenture Trustee
for Recitals 21
Section 7.4. Compensation and Expenses of Trustees;
Certain Limitations on Indenture
Trustee's Rights to Compensation and
Indemnification 22
Section 7.5. Status of Moneys Received 22
Section 7.6. Resignation of Indenture Trustee 23
Section 7.7. Removal of Indenture Trustee 23
Section 7.8. Appointment of Successor Indenture Trustee 23
Section 7.9. Succession of Successor Indenture Trustee 24
Section 7.10. Eligibility of Indenture Trustee 24
Section 7.11. Successor Indenture Trustee by Merger 25
Section 7.12. Co-Trustees 25
Section 8. Supplements; Waivers; Consents 26
Section 8.1. Supplemental Indentures without Holder
Consent 26
Section 8.2. Waivers and Consents by Holders;
Supplemental Indentures with
Holders' Consent 26
Section 8.3. Solicitation of Holders 27
Section 8.4. Effect of Supplement or Waiver 27
Section 8.5. Notice of Supplements 27
Section 8.6. Opinion of Counsel Conclusive
as to Supplements 27
Section 9. Miscellaneous 27
Section 9.1. Successors and Assigns 27
Section 9.2. Severability 28
Section 9.3. Communications 28
Section 9.4. Release 28
Section 9.5. Counterparts 28
Section 9.6. Governing Law 29
Section 9.7. Submission to Jurisdiction 29
Section 9.8. Headings 29
Section 9.9. Effective Date 29
Signature 30
Attachments to Indenture of Trust:
Annex I - Form of Notes
Annex II - Control Group Members
Annex III - Form of Indenture Trustee Parent Guarantee
INDENTURE OF TRUST
Indenture of Trust (the "Indenture") dated as of
December 15, 1993, between Care Enterprises, Inc., a Delaware
corporation (the "Company") and State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association (the "Indenture Trustee").
RECITALS:
A. The capitalized terms used in this Indenture shall
have the respective meanings specified in Section 1 unless
otherwise herein defined or the context hereof shall otherwise
require.
B. The Company has entered into the Note Agreement
providing for the commitments of the Purchasers to purchase the
8.10% Senior Secured Notes due December 15, 2000 of the Company
in an aggregate principal amount of $30,000,000. The Notes are
to be dated the date of issue, to bear interest at the rate of
8.10% per annum prior to maturity, payable semiannually on the
fifteenth day of each June and December in each year (commencing
June 15, 1994), to mature on December 15, 2000, and are to be
otherwise substantially in the form attached hereto as Annex I.
C. The proceeds of the Notes are to be applied by the
Company as contemplated by the Note Agreement.
D. All of the requirements of law have been fully
complied with and all other acts and things necessary to make
this Indenture a valid, binding and legal instrument to secure
the Secured Indebtedness have been done and performed.
Now, therefore, in consideration of the premises and other
good and valuable consideration, receipt whereof is hereby
acknowledged, and intending to be legally bound, and in order to
secure the payment of the principal of and interest and premium,
if any, on all Notes at any time outstanding hereunder according
to their tenor and effect, and to secure the payment of all other
Secured Indebtedness and the performance and observance of all
the covenants and conditions contained in the Notes, this
Indenture, the Mortgages and the Note Agreement, and to declare
the terms and conditions upon which the Notes will be secured,
authenticated, issued, transferred and exchanged, and upon which
the trust hereof is to be administered by the Indenture Trustee;
The Indenture Trustee does hereby declare that it will hold
in trust for the benefit of the Holders all the right, title and
interest in and to the Mortgages, together with all right, title
and interest thereby granted, conveyed, mortgaged or assigned and
all proceeds and avails thereof (the "Collateral");
To have and to hold all and singular the Collateral, whether
now owned or held or hereafter acquired, unto the Indenture
Trustee, its successors in trust and assigns, forever;
In trust nevertheless, upon the terms and trust herein set
forth, for the equal and proportionate benefit, security and
protection of all present and future Holders hereunder from and
after the issuance of the Notes, without preference, priority or
distinction of any Note over any other Note by reason of priority
of time of issue, sale, negotiation or otherwise for any cause
whatsoever; and for the enforcement of the payment of the
principal of, premium, if any, and interest on the Notes in
accordance with their terms and all other sums payable under this
Indenture or on the Notes, and the observance and performance of
the provisions of, the Note Agreement, the Mortgages and this
Indenture, all as herein provided;
It is hereby covenanted, declared and agreed, that the Notes
are to be issued, authenticated, delivered and secured, and that
the Collateral is to be held, dealt with and disposed of by the
Indenture Trustee, upon and subject to the provisions of this
Indenture.
Section 1. Definitions.
Section 1.1. Generally. References to agreements shall,
unless the context otherwise requires, be deemed to mean and
include such agreements as the same may be amended and
supplemented from time to time and references to any Person shall
include the successors and assigns of such Person.
Section 1.2. Defined Terms.
"Appraisal" shall mean a full and narrative written opinion
of fair market value of one or more Mortgaged Facilities made by
Valuation Counselors Group, Inc. or any other independent
appraiser acceptable to the Holders, in accordance with the
standards of the professional appraisal society of which such
company is a member, and which Appraisal shall include the income
and comparable sales approaches to value.
"Appraisal Notice" shall have the meaning set forth in
Section 4.2(a).
"Business Day" shall have the meaning set forth in the Note
Agreement.
"Collateral" shall have the meaning specified in the
declaration of trust in the Recitals of this Indenture.
"Company" shall have the meaning specified in the
introductory paragraph of this Indenture.
"Debt for Borrowed Money" shall have the meaning set forth
in the Note Agreement.
"Default" shall mean any event or condition the occurrence
of which would with the giving of notice, or the lapse of time,
or both constitute an Event of Default.
"Event of Default" shall have the meaning specified in
Section 6.1.
"Event of Loss" with respect to any Mortgaged Facility shall
mean the condemnation, loss or destruction of such Mortgaged
Facility or a material portion thereof, which shall include
damage to an extent rendering repair or replacement impractical
or uneconomical, or any other event which shall render such
Mortgaged Facility permanently unfit for normal use.
"Event of Loss Notice" shall have the meaning specified in
Section 5.4(a).
"Event of Loss Payment Date" shall have the meaning
specified in Section 5.4(d).
"Guaranty Agreement" shall have the meaning set forth in the
Note Agreement.
"Holder" shall have the meaning set forth in the Note
Agreement.
"Institutional Holder" shall have the meaning set forth in
the Note Agreement.
"Lien" shall have the meaning set forth in the Note
Agreement.
"Make-Whole Amount" shall mean in connection with any
prepayment (other than in connection with Section 5.4) or
acceleration of the Notes the excess, if any, of (i) the
aggregate present value as of the date of such prepayment of each
dollar of principal being prepaid (taking into account the
application of such prepayment required by Section 5.1) and the
amount of interest (exclusive of interest accrued to the date of
prepayment) that would have been payable in respect of each such
dollar if such prepayment had not been made, determined by
discounting semi-annually such amounts at the Reinvestment Rate
from the respective dates on which they would have been payable,
over (ii) 100% of the principal amount of the outstanding Notes
being prepaid. If the Reinvestment Rate is equal to or higher
than 8.10%, the Make-Whole Amount shall be zero. For purposes of
any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean 0.50%, plus the yield
to maturity of the United States Treasury obligations with a
maturity (as compiled by and published on Telerate Page 5 or
its successor not more than five business days immediately
preceding the payment date) most nearly equal to the remaining
Weighted Average Life to Maturity of the principal being
prepaid (taking into account the application of each
prepayment required by Section 5.1). If such rate shall not have
been so published, the Reinvestment Rate in respect of such
payment date shall mean the mean of the yields to maturity of
United States Treasury obligations (as compiled by and
published in the United States Federal Reserve Bulletin or its
successor publication for each of the two weeks immediately
preceding the payment date) with a constant maturity most
nearly equal to the Weighted Average Life to Maturity of the
principal being prepaid (taking into account the application
of each prepayment required by Section 5.1). If no maturity
exactly corresponding to the Weighted Average Life to Maturity
shall appear therein, yields for the next longer and the next
shorter published maturities shall be calculated pursuant to
the foregoing sentence and the Reinvestment Rate shall be
interpolated from such yields on a straight-line basis
(rounding to the nearest month). If such rates shall not have
been so published, the Reinvestment Rate in respect of such
determination date shall be calculated pursuant to the next
preceding sentence on the basis of the arithmetic mean of the
arithmetic means of the secondary market ask rates, as of
approximately 3:30 P.M., New York City time, on the last
business days of each of the two weeks preceding the payment
date, for the actively traded U.S. Treasury security or
securities with a maturity or maturities most closely
corresponding to the remaining Weighted Average Life to
Maturity, as reported by three primary United States
Government securities dealers in New York City of national
standing selected in good faith by the Company.
"Weighted Average Life to Maturity" of the principal
amount of the Notes being prepaid shall mean, as of the time
of any determination thereof, the number of years obtained by
dividing the then Remaining Dollar-Years of such principal by
the aggregate amount of such principal. The term "Remaining
Dollar-Years" of such principal shall mean the amount obtained
by (i) multiplying (x) the remainder of (1) the amount of
principal that would have become due on each scheduled payment
date if such prepayment had not been made, less (2) the amount
of principal on the Notes scheduled to become due on such date
after giving effect to such prepayment and the application
thereof in accordance with the provisions of Section 5.1, by (y)
the number of years (calculated to the nearest one-twelfth) which
will elapse between the date of determination and such
scheduled payment date, and (ii) totalling the products
obtained in (i).
"Mortgaged Facility" shall have the meaning set forth in the
Note Agreement.
"Mortgages" shall mean those certain Mortgage and Security
Agreements and those certain Deeds of Trust and Security
Agreements each dated as of December 15, 1993, from the Company
to the Indenture Trustee.
"Original Appraisal Value" shall mean the appraisal value of
each Mortgaged Facility set forth in the Appraisal of such
Mortgaged Facility delivered prior to the Closing Date.
"Note Agreement" shall mean the Note Agreement, dated as of
December 15, 1993 between the Company and the Purchasers named
therein.
"Notes" shall mean the 8.10% Senior Secured Notes due
December 15, 2000 of the Company issued under and pursuant to the
Indenture.
"Officer's Certificate" shall mean a certificate signed by
the Chairman of the Board, the President, any Vice President, the
Treasurer or an Assistant Treasurer of any corporation, a general
partner of any partnership or the trustee of any trust.
"Person" shall have the meaning set forth in the Note
Agreement.
"Purchaser" shall have the meaning set forth in the Note
Agreement.
"Put Notice" shall have the meaning specified in Section
5.4(b).
"Register" shall have the meaning set forth in Section 2.3.
"Release Date" shall have the meaning set forth in Section
4.2(a).
"Restricted Subsidiary" shall have the meaning set forth in
the Note Agreement.
"Secured Indebtedness" shall mean the outstanding Notes and
all principal thereof and interest thereon and premium, if any,
and all additional amounts and other sums at any time due and
owing from, or required to be paid by, the Company under the
terms of the outstanding Notes, the Note Agreement, the Mortgages
or the Indenture.
"Security" shall have the meaning set forth in the Note
Agreement.
Section 2. Execution, Payment, Registration, Etc. of Notes.
Section 2.1. Execution of Notes. (a) The Notes shall be
signed on behalf of the Company by any person who, at the date of
the actual execution of such Note, shall be an authorized officer
of the Company. Only such Notes as shall bear thereon a
certificate of authentication substantially in the form set forth
in Annex I hereto shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such
certificate by the Indenture Trustee upon any Note executed by
the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this
Indenture. The authentication by the Indenture Trustee of any
Note issued hereunder shall not be construed as a representation
or warranty by the Indenture Trustee as to the validity or
security of this Indenture or of such Note, and the Indenture
Trustee shall in no respect be liable or answerable for the use
made of such Note or the proceeds thereof. The Indenture Trustee
shall, upon presentation to it of Notes duly executed on behalf
of the Company, authenticate such Notes upon the written request
of the Company so to do and shall thereupon deliver such Notes to
or upon the written order of the Company signed by a duly
authorized officer of the Company.
(b) The aggregate principal amount of the Notes to be
issued hereunder shall not exceed $30,000,000, except as provided
in Section 2.4(a) or (d).
Section 2.2. Payment of Notes. (a) The principal of,
premium, if any, and interest on the Notes shall be payable to
the Indenture Trustee at the Indenture Trustee's account number
99003147 at State Street Bank and Trust Company, Boston,
Massachusetts, ABA No. 011-00-0028, Attention: Hartford Group,
Reference: Care Enterprises, Inc. or to such other account of
the Indenture Trustee as it shall designate (or if State Street
Bank and Trust Company of Connecticut, National Association is
not the Indenture Trustee, at the principal corporate trust
office of the Indenture Trustee), in lawful money of the United
States of America, not later than 11:00 A.M. Boston,
Massachusetts time on the date such payment is due.
Payment of principal and interest on the Notes shall be made only
upon presentation of such Notes to the Indenture Trustee for
notation thereon of the amount of such payment. Any payment or
prepayment of amounts due on the Note in accordance with the
terms thereof and hereof which is due on a date which is not a
Business Day shall be payable on the next following Business Day
without penalty or interest.
(b) Notwithstanding the foregoing provisions of paragraph
(a) of this Section 2.2, upon written notice from any Holder
which is a Purchaser or an Institutional Holder or its nominee
given not less than 30 days prior to the payment or prepayment of
the Notes (and Section 7.2 of the Note Agreement shall constitute
such written notice in the case of the Purchasers), the Indenture
Trustee will cause all payments and prepayments of the principal
of, and interest and premium, if any, on the Notes held by such
Holder or its nominee to be made to any bank in the continental
United States as shall be specified in such notice (and Schedule
II of the Note Agreement shall constitute such specification in
the case of the Purchasers until such Purchasers shall specify
other instructions in writing to the Indenture Trustee) by wire
transfer of immediately available Federal Reserve funds to such
bank, on each such date such payment or prepayment is due;
provided that such bank has facilities for the receipt of a wire
transfer. The Indenture Trustee will transmit or cause to be
transmitted any such wire transfer not later than 11:00 A.M.,
Boston, Massachusetts time on each such date payment or
prepayment is due, provided that funds therefor have
been received by the Indenture Trustee in cash or in solvent
credits acceptable to it and such funds have been received by the
Indenture Trustee by 9:00 A.M., Boston, Massachusetts time, or if
not so received promptly upon receipt. Each Holder (or person
for whom such Holder is a nominee) shall, before selling,
transferring or otherwise disposing of such Note, present such
Note to the Indenture Trustee for transfer and notation as
provided in Sections 2.4 and 2.5.
Section 2.3. Form of Notes; the Register. The Notes shall
be issuable as fully registered Notes in the form attached hereto
as Annex I. The Company shall cause to be kept at the principal
office of the Indenture Trustee a register for the registration
and transfer of the Notes (herein called the "Register"). The
names and addresses of the Holders, the transfers of the Notes
and the names and addresses of the transferees of all Notes shall
be registered in the Register.
Section 2.4. Transfers and Exchanges of Notes; Lost or
Mutilated Notes. (a) The Holder may transfer such Note upon the
surrender thereof at the principal office of the Indenture
Trustee. Thereupon, the Company shall execute in the name of the
transferee a new Note or Notes in aggregate principal amount
equal to the original principal amount of the Note so surrendered
(or in the event of a transfer of a portion of the principal
amount of the Note held by such Holder, the Company shall execute
in the name of the transferee and such Holder, new Notes in the
principal amounts specified by such Holder which shall aggregate
to the original principal amount of the Note so surrendered), and
the Indenture Trustee shall authenticate and deliver such new
Note or Notes to such transferee and, if appropriate, such
Holder. The Indenture Trustee shall provide the Company with
prompt written notice of any such transfer.
(b) All Notes presented or surrendered for transfer shall
be accompanied (if so required by the Company or by the Indenture
Trustee) by a written instrument or instruments of assignment or
transfer, in form reasonably satisfactory to the Indenture
Trustee, duly executed by the Holder or by its attorney duly
authorized in writing. The Company and the Indenture Trustee
shall not be required to make a transfer or an exchange of any
Note for a period of ten days preceding any payment date with
respect thereto.
(c) No notarial seal shall be necessary for the transfer
or exchange of any Note pursuant to this Section 2.4, and the
Holder of any Note issued as provided in this Section 2.4 shall
be entitled to any and all rights and privileges granted under
this Indenture to a Holder.
(d) In case any Note shall become mutilated or be
destroyed, lost or stolen, the Company, upon the written request
of the Holder thereof, shall execute and the Indenture Trustee
shall authenticate and deliver a new Note in exchange and
substitution for the mutilated Note, or in lieu of and in
substitution for the Note so destroyed, lost or stolen. Except
as hereinafter provided, the applicant for a substituted Note
shall furnish to the Company and to the Indenture Trustee such
security or indemnity as may be reasonably required by them to
save each of them harmless from all risks, and the applicant
shall also furnish to the Company and to the Indenture Trustee
evidence to their reasonable satisfaction of
the mutilation, destruction, loss or theft of the applicant's
Note and of the ownership thereof. In case any Note which has
matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated
Note), if the applicant for such payment shall furnish to the
Company and to the Indenture Trustee such security or indemnity
as they may reasonably require to save them harmless, and shall
evidence to the reasonable satisfaction of
the Company and the Indenture Trustee the mutilation,
destruction, loss or theft of such Note and the ownership
thereof. If an original Purchaser or its nominee is the owner of
any mutilated, destroyed, lost or stolen Note, then the affidavit
of such original Purchaser's President, Vice President, Assistant
Vice President, Cashier, Treasurer, Assistant Treasurer,
Assistant Cashier, Secretary or Assistant Secretary in form
reasonably satisfactory to the Company and the Indenture Trustee
setting forth the fact of destruction, loss or theft and such
Purchaser's ownership of the Note at the time of such mutilation,
destruction, loss or theft shall be accepted as satisfactory
evidence thereof and no indemnity shall be required as a
condition to execution and delivery of a new Note other than the
written agreement of such Purchaser, in form reasonably
satisfactory to the Company and the Indenture Trustee,
to indemnify the Company and the Indenture Trustee.
Section 2.5. The New Notes. (a) Each new Note (a "New
Note") issued pursuant to Section 2.4(a) or (d) in exchange for
or in substitution or in lieu of an outstanding Note (an "Old
Note") shall be dated the date of such Old Note. The Indenture
Trustee shall mark on each New Note (i) the date to which
principal and interest have been paid on such Old Note, and (ii)
all payments and prepayments of principal previously made on such
Old Note which are allocable to such New Note. Interest shall be
deemed to have been paid on such New Note to the date on which
interest shall have been paid on such Old Note, and all payments
and prepayments of principal marked on such New Note, as provided
in clause (ii) above, shall be deemed, absent manifest error, to
have been made thereon.
(b) Upon the issuance of a New Note pursuant to Section
2.4(a) or (d), the Company may require the payment of a sum to
reimburse it for, or to provide it with funds for, the payment of
any tax or other governmental charge or any other charges and
expenses connected therewith which are paid or payable by the
Company.
(c) All New Notes issued pursuant to Section 2.4(a) or (d)
in exchange for or in substitution or in lieu of Old Notes shall
be valid obligations of the Company evidencing the same debt as
the Old Notes and shall be entitled to the benefits and security
of this Indenture and the Mortgages to the same extent as the Old
Notes.
(d) Upon the issuance of any Note pursuant to this
Indenture, the Indenture Trustee shall deliver to the Holder
thereof an amortization schedule with respect to such Note
setting forth the amount of the mandatory prepayments to be made
on such Note after the date of issuance thereof and the unpaid
principal balance of such Note after each such prepayment.
Section 2.6. Cancellation of Notes. All Notes surrendered
for the purpose of payment, redemption, transfer or exchange
shall be delivered to the Indenture Trustee for cancellation and
shall be cancelled by it, and no Notes shall be issued in lieu
thereof except as expressly required or permitted by any of the
provisions of this Indenture. The Indenture Trustee shall
deliver a certificate to the Company specifying any cancellation
of Notes which has been made. All such cancelled Notes shall be
held by the Indenture Trustee until this Indenture shall have
been discharged, at which time the Indenture Trustee shall either
deliver such cancelled Notes in a manner necessary to effect the
discharge and release of this Indenture or, if no such delivery
is necessary, such Notes shall be delivered to or disposed of as
directed by the Company.
Section 2.7. Indenture Trustee as Agent. The Indenture
Trustee is hereby appointed the agent of the Company for the
payment, registration, transfer and exchange of Notes. Subject
to the provisions of Section 2.2, Notes may be presented for
payment at, and notices or demands with respect to the Notes or
this Indenture may be served or made at, the principal office of
the Indenture Trustee.
Section 2.8. Ownership. The Person in whose name any Note
shall be registered shall be deemed and treated as the owner
thereof for all purposes of this Indenture and neither the
Company nor the Indenture Trustee shall be affected by any notice
to the contrary. Payment of or on account of the principal of,
premium, if any, and interest on such Note shall be made only to
or upon the order in writing of such registered owner. For the
purpose of any request, direction or consent hereunder, the
Company and the Indenture Trustee may deem and treat the
registered owner of any Note as the owner and holder thereof
without production of such Note.
Section 3. Covenants and Warranties of the Company.
The Company, hereby covenants, warrants and agrees for the
benefit of the Indenture Trustee and the Holders as follows:
Section 3.1. Further Assurances. The Company agrees that at
any time and from time to time, upon the written request of the
Indenture Trustee, the Company, will promptly and duly execute
and deliver any and all such further instruments and documents as
the Indenture Trustee may reasonably deem desirable in obtaining
the full benefit of the security intended to be afforded hereby
and of the rights and powers herein granted.
Section 3.2. Payment of Notes. The Company will duly and
punctually pay the principal of, premium, if any, and interest
on, each and every Note, at the dates and the places and in the
manner mentioned in the Notes, in this Indenture and in the Note
Agreement, according to the true intent and meaning thereof and
hereof.
Section 3.3. Note Agreement and Mortgage Covenants. Each
and all of the terms, provisions, restrictions, covenants and
agreements set forth in the Note Agreement and the Mortgages, and
in each and every supplement thereto or amendment thereof which
may at any time or from time to time be executed and delivered by
the parties thereto or their successors and assigns, are
incorporated herein by reference to the same extent as though
each and all of said terms, provisions, restrictions, covenants
and agreements were fully set out herein and as though any
amendment or supplement to the Note Agreement and each Mortgage
were fully set out in an amendment or supplement to this
Indenture; and the Company does hereby covenant and agree well
and truly to abide by, perform and be governed and restricted by
each and all of the matters provided for by the Note Agreement
and the Mortgages as so incorporated herein to the same extent
and with the same force and effect as if each and all of said
terms, provisions, restrictions, covenants and
agreements so incorporated herein by reference were set out and
repeated herein at length.
Section 3.4. After-Acquired Property. Any and all property
described or referred to in this Indenture or any Mortgage and by
the terms hereof or thereto is to be subjected to the lien and
security interest of this Indenture or any Mortgage which is
hereafter acquired by the Company shall ipso facto, and without
any further conveyance, assignment or act on the part of the
Company or the Indenture Trustee, become and be subject to the
lien and security hereof and thereof as fully and completely as
though specifically described herein, but nothing in this Section
3.4 contained shall be deemed to modify or change the obligation
of the Company under Section 3.1.
Section 4. Possession, Use and Release of Property;
Maintenance of Collateral Value.
Section 4.1. Possession of Collateral. So long as no Event
of Default has occurred and is continuing, the Company shall be
suffered and permitted to remain in full possession, enjoyment
and control of the Collateral and to manage, operate and use the
same and each part thereof with the rights and franchises
appertaining thereto; provided, that the possession, enjoyment,
control and use thereof shall at all times be subject to the
observance and performance of the terms of this Indenture and the
Mortgages.
Section 4.2. Reduction of Collateral. (a) The Company may
obtain the release of the Lien on a Mortgaged Facility upon
delivery not less than 60 days prior to the date of release (the
"Release Date") of a certificate to the Indenture Trustee and
each of the Holders of the Notes (i) certifying that no Default
or Event of Default has occurred and is continuing, (ii)
identifying the Mortgaged Facility the Company is seeking to have
released (the "Specified Facility"), (iii) stating the aggregate
outstanding principal amount of the Notes, (iv) stating the
Original Appraisal Value of the remaining Mortgaged Facilities
after giving effect to the release of the Specified Facility as a
percentage of the aggregate principal amount of the outstanding
Notes (which shall not be less than 145% as of the Release Date)
and (v) setting forth the Release Date. The Holders holding not
less than 66-2/3% of the Notes may give written notice (an
"Appraisal Notice") to the Company within 30 days of receipt of
such certificate to the effect
that such Holders have made a determination in good faith that
there may have been a decline in the value of the Mortgaged
Facilities since the most recent Appraisal thereof and such
Holders require that an Appraisal of each of the remaining
Mortgaged Facilities be conducted by an independent appraiser
acceptable to such Holders and the Company. If no Appraisal
Notice has been so delivered and no Default or Event of Default
has occurred and is continuing on the Release Date, the Indenture
Trustee shall release the Lien on the Specified Facility on the
Release Date. If an Appraisal Notice is so delivered, the
Company shall obtain preliminary Appraisals satisfactory in
scope, form and substance to the Holders holding 66-2/3% of the
Notes no less than 10 days prior to the scheduled Release Date.
If such Appraisals indicate that the value of the remaining
Mortgaged Properties is not less than 145% of the aggregate
principal amount of the outstanding Notes calculated as of the
Release Date, such Holders shall instruct the
Indenture Trustee to release the Lien on the Specified Facility
on the Release Date, provided that no Default or Event of Default
shall have occurred and be continuing on such Release Date.
(b) In the event that the lien on a Mortgaged Facility is
released pursuant to this Section 4.2, the Company will pay all
reasonable expenses and fees incurred by the Indenture Trustee in
connection therewith. The Company shall pay all expenses
incurred in connection with any Appraisals obtained pursuant to
paragraph (a) of this Section 4.2.
Section 4.3. Full Release of Collateral with Consent of
Holders. In addition to the release pursuant to Section 4.2, the
Company may sell or otherwise dispose of all or any part of the
Collateral then subject to the lien of this Indenture, and the
Indenture Trustee shall release the same from the lien and
security interest hereof, to the extent and on the terms and upon
compliance with the conditions provided for in any written
consent given thereto at any time or from time to time by all
Holders of Secured Indebtedness.
Section 5. Prepayment of Notes.
Section 5.1. Required Prepayments. The Company agrees that
on January 15 in each year, commencing 1997 and ending 2000, both
inclusive, it will prepay and apply and there shall become due
and payable on the principal indebtedness evidenced by the Notes
an amount equal to the lesser of (i) $6,000,000 or (ii) the
principal amount of the Notes then outstanding. The entire
remaining principal amount of the Notes shall become due and
payable on December 15, 2000. No premium shall be payable in
connection with any required prepayment made pursuant to this
Section 5.1. For purposes of this Section 5.1, any prepayment of
less than all of the outstanding
Notes pursuant to Section 5.2 shall be deemed to be applied
first, to the amount of principal scheduled to remain unpaid
until December 15, 2000, and then to the remaining scheduled
principal payments in inverse chronological order and any
prepayment of less than all of the outstanding Notes pursuant to
Section 5.4 or Section 5.5 shall be applied to reduce the
principal amount required to be prepaid on January 15 in
each subsequent year including January 15, 2000 and on December
15, 2000 in the same proportion as the principal amount of the
Notes outstanding immediately prior to such prepayment has been
reduced by such prepayment.
Section 5.2. Optional Prepayment with Premium. In addition
to the payments required by Section 5.1, upon compliance with
Section 5.3 the Company shall have the privilege, at any time and
from time to time, of prepaying the outstanding Notes, either in
whole or in part (but if in part then in a minimum principal
amount of $1,000,000 or any increment of $100,000 in excess
thereof) by payment of the principal amount of the Notes, or
portion thereof to be prepaid, and accrued interest thereon to
the date of such prepayment, together with a premium equal to the
Make-Whole Amount, determined as of five Business Days prior to
the date of such prepayment pursuant to this Section 5.2.
Section 5.3. Notice of Optional Prepayments. The Company
will give notice of any prepayment of the Notes pursuant to
Section 5.2 to each Holder thereof not less than 15 days nor more
than 60 days before the date fixed for such optional prepayment
specifying (i) such date, (ii) the principal amount of the
Holder's Notes to be prepaid on such date, (iii) that a premium
equal to the Make-Whole Amount may be payable, (iv) the date when
such premium will be calculated, (v) the estimated premium, and
(vi) the accrued interest applicable to the prepayment. Notice
of prepayment having been so given, such notice shall be
irrevocable from and after the tenth day prior to
the prepayment date specified in such notice and the aggregate
principal amount of the Notes specified in such notice, together
with accrued interest thereon and the premium, if any, equal to
the Make-Whole Amount payable with respect thereto shall become
due and payable on the prepayment date specified in said notice.
Not later than two Business Days prior to the prepayment date
specified in such notice, the Company shall provide each Holder
written notice of the premium, if any, payable in connection with
such prepayment and, whether or not any premium is payable, a
reasonably detailed computation of the Make-Whole Amount.
Section 5.4. Prepayment from Insurance Proceeds or
Condemnation Awards. (a) In the event that an Event of Loss shall
occur, the Company will give written notice (an "Event of Loss
Notice") of such fact to all Holders within 10 days of receipt of
insurance proceeds or condemnation awards in connection with such
occurrence. The Event of Loss Notice shall (i) state that an
Event of Loss has occurred, (ii) identify the Mortgaged Facility
with respect to which such Event of Loss has occurred and
describe the facts and circumstances of such Event of Loss in
reasonable detail, (iii) state the amount of insurance proceeds
or condemnation awards received in connection with the Event of
Loss, (iv) state that the occurrence of such Event of Loss
entitles each Holder to receive a
prepayment of the Notes held by such Holder from such insurance
proceeds and (v) state when such Holder must respond to such
Event of Loss Notice pursuant to Section 5.4(b) in order to
receive such prepayment.
(b) Upon the receipt of such Event of Loss Notice, each
Holder shall have the privilege, upon written notice (the "Put
Notice") given to the Company and the Indenture Trustee within 30
days of receipt of the Event of Loss Notice, of accepting the
prepayment of the Notes held by such Holder. Promptly upon
receipt of a Put Notice from any Holder, the Indenture Trustee
will provide a copy thereof to each other Holder. Not later than
ten days prior to the Event of Loss Payment Date, the Company
will give written notice to each Holder that has delivered a Put
Notice, which notice from the Company shall specify (i) the Event
of Loss Payment Date and (ii) the principal of, and accrued
interest on, such Holder's Notes to be prepaid thereby. The
Company covenants and agrees to apply the entire amount of
insurance proceeds or condemnation awards received in connection
with such Event of Loss to the prepayment on the Event of Loss
Payment Date of a ratable portion of the Notes held by each
Holder that has given a Put Notice to the Company. In the event
that an Event of Loss Notice is given to any Holder and such
Holder fails to provide a Put Notice within 30 days
thereafter, the Notes held by such Holder shall not become due
and payable as a result of such Event of Loss.
(c) All prepayments on the Notes pursuant to this Section
5.4 shall be made by the pro rata payment of the principal amount
remaining unpaid on Notes, and interest accrued thereon, held by
each Holder which delivered a Put Notice. No premium shall be
payable in connection with any prepayment made pursuant to this
Section 5.4.
(d) As used herein the term "Event of Loss Payment Date"
with respect to any Put Notice delivered with respect to an Event
of Default shall mean the forty-fifth day after delivery of such
Event of Loss Notice.
Section 5.5. Prepayment upon Change of Control. (a) In the
event any Responsible Officer of the Company has knowledge of a
Change of Control (as defined in paragraph (d) of this Section
5.5) or an impending Change of Control, the Company will give
written notice (a "Change of Control Notice") of such fact to all
Holders at least 45 days prior to the occurrence of such Change
of Control; provided, however, that if no Responsible Officer of
the Company shall then have knowledge of such fact, such Change
of Control Notice shall be delivered promptly upon a Responsible
Officer of the Company obtaining such knowledge, but in no event
later than three Business Days after the date of occurrence of
the Change of Control. The Change of Control Notice shall (i)
state that a Change of Control may occur or has occurred, (ii)
describe the facts and circumstances of such Change of Control in
reasonable detail, (iii) state that the occurrence of such Change
of Control entitles each Holder to declare the Notes held by such
Holder to be due and payable pursuant to this Section 5.5, (iv)
state that a premium equal to the Make-Whole Amount may be
payable and the date the premium will be calculated and (v) state
when such Holder must respond to such Change of Control Notice
pursuant to Section 5.5(b) in order to make such declaration.
(b) Upon the receipt of such Change of Control Notice or,
if no Change of Control Notice is given, upon receipt of actual
knowledge of a Change of Control, each Holder shall have the
privilege, upon written notice (the "Declaration Notice") to the
Company and the Indenture Trustee, of irrevocably declaring all
Notes held by such Holder serving such Declaration Notice to
become due and payable and thereupon such Notes shall become due
and payable on the Change of Control Payment Date (as defined in
paragraph (d) of this Section 5.5). Promptly upon receipt of a
Declaration Notice from any Holder, the Indenture Trustee will
provide a copy thereof to each other Holder. Not later than ten
days prior to the Change of Control Payment Date, the Company
will give written notice to each Holder that has given a
Declaration Notice, which notice from the Company shall specify
(i) the Change of Control Payment Date, (ii) the principal and
accrued interest applicable to the prepayment and (iii) the
estimated premium equal to the Make-Whole Amount, if any
(including a reasonably detailed computation of the Make-Whole
Amount). Not later than two Business Days prior to the Change of
Control Payment Date specified in such notice, the Company shall
provide each Holder which has delivered a Declaration Notice
written notice of the premium equal to the Make-Whole Amount, if
any, payable in the Change of Control Payment
Date and whether or not any premium is payable, a reasonably
detailed computation of the Make-Whole Amount. The Company
covenants and agrees to prepay in full on the Change of Control
Payment Date all Notes held by each Holder that has given a
Declaration Notice to the Company; provided, however, that until
the Change of Control described in a Change of Control Notice
takes place, no Declaration Notice given in connection therewith
shall be effective. In the event that (x) a Change of Control
Notice is given to any Holder in respect of a Change of Control
and such Holder fails to provide a Declaration Notice within 30
days after the date on which such Holder receives such Change of
Control Notice or (y) no Change of Control Notice is given to a
Holder in respect of a Change of Control and such Holder does not
provide a Declaration Notice within 30 days after the date on
which such Holder obtains actual knowledge of the Change of
Control occurs, the Notes held by such Holder shall not become
due and payable as a result of such Change of Control.
(c) All prepayments on the Notes pursuant to this Section
5.5 shall be made by the payment of the aggregate principal
amount remaining unpaid on such Notes, accrued interest thereon
to the date of such prepayment, and the premium, if any, equal to
the Make-Whole Amount.
(d) As used herein, the term "Change of Control" shall
mean each and every issue, sale or other disposition of shares of
stock of the Company which results in any Person or group of
Persons acting in concert, other than (x) any member or members
of the Smith Group, (y) any member or members of the Foothill
Group or(z) the then current senior executive officers of the
Company (unless in connection with such issue, sale or
disposition of stock to any Person or Persons specified in
clauses (x), (y) or (z) the Company ceases to have a class of
equity securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934), beneficially owning or
controlling, directly or indirectly, more
than 50% (by number of votes) of the Voting Stock of the Company;
the term "Smith Group" shall mean (i) the Smith Group members
named in Section 1 of Annex II, (ii) the spouses, lineal
descendants and spouses of the lineal descendants of the persons
named in clause (i), and (iii) the estates or legal
representatives of the persons named in clause (i) and (ii); and
the term "Foothill Group" shall mean (i) the Foothill Group
members named in Section 2 of Annex II, (ii) the spouses, lineal
descendants and spouses of the lineal descendants of the persons
named in clause (i), and (iii) the estates or legal
representatives of the persons named in
clause (i) and (ii); the term "Change of Control Date" shall mean
any date upon which a Change of Control shall occur; and the term
"Change of Control Payment Date" with respect to all Declaration
Notices delivered with respect to any Change of Control, shall
mean the first Business Day falling 45 days after the related
Change of Control Date; and the term "lineal descendants" shall
include all adopted children.
Section 5.6. Application of Prepayments. All partial
prepayments pursuant to Section 5.1 and Section 5.2 shall be
applied on all outstanding Notes ratably in accordance with the
unpaid principal amounts thereof.
Section 6. Events of Default and Remedies Therefor.
Section 6.1. Events of Default. Any one or more of the
following shall constitute an "Event of Default" as such term is
used herein:
(a) Default shall occur in the payment of interest
on any Note when the same shall have become due and such
default shall continue for more than five days; or
(b) Default shall occur in the making of any
required prepayment on any of the Notes as provided in Section
5.1; or
(c) Default shall occur in the making of any other
payment of the principal of any Note or premium, if any,
thereon at the expressed or any accelerated maturity date or
at any date fixed for prepayment; or
(d) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for
redemption or otherwise) of the principal of or interest on
any Debt for Borrowed Money aggregating $1,000,000 or more
(other than the Notes) of the Company or any Restricted
Subsidiary and such default shall continue beyond the period
of grace, if any, allowed with respect thereto; or
(e) Default or the happening of any event shall
occur under any indentures, agreements or other instruments
under which any Debt for Borrowed Money aggregating $1,000,000
or more (other than the Notes) of the Company or any
Restricted Subsidiary may be issued and such default or event
shall continue beyond the period of grace, if any, allowed
with respect thereto; or
(f) Default shall occur in the observance or
performance of any covenant or agreement contained in Section 4.1
(insofar as such covenant requires maintenance of corporate
existence), Section 4.6 through Section 4.13 and Section 4.15 of
the Note Agreement; or
(g) Default shall occur in the observance or
performance of any other provision of the Note Agreement, this
Indenture or any Mortgage which is not remedied within 30 days
after the earlier of (i) the day on which any Responsible
Officer of the Company first obtains knowledge of such
default, or (ii) the day on which written notice thereof is
given to any Responsible Officer of the Company by the
Indenture Trustee or any Holder; or
(h) Any representation or warranty made by the
Company herein, in any Mortgage or in the Note Agreement, or
made by the Company in any written statement or certificate
furnished by the Company in connection with the consummation
of the issuance and delivery of the Notes or furnished by the
Company pursuant hereto, is untrue in any material respect as
of the date of the issuance or making thereof; or
(i) Any representation or warranty made by any
Restricted Subsidiary in the Guaranty Agreement, or made by
any Restricted Subsidiary in any written statement or
certificate furnished by any Restricted Subsidiary in
connection with the consummation of the issuance and delivery
of the Notes or furnished by any Restricted Subsidiary
pursuant to the Guaranty Agreement, is untrue in any material
respect as of the date of the issuance or making thereof; or
(j) Final judgment or judgments for the payment
of money aggregating in excess of $250,000 is or are
outstanding against the Company or any Restricted Subsidiary
or against any property or assets of either and any one of
such judgments has remained unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of 30 days from
the date of its entry or, in any event, within 10 days of
execution of any writ of attachment; or
(k) A custodian, liquidator, trustee or receiver
is appointed for the Company or any Restricted Subsidiary or
for the major part of the property of either and is not
discharged within 60 days after such appointment; or
(l) The obligations of any Restricted Subsidiary
contained in the Guaranty Agreement shall cease to be in full
force and effect for any reason whatsoever, including, without
limitation, the determination by any governmental body or
court that the Guaranty Agreement is invalid, void or
unenforceable or any Restricted Subsidiary shall contest or
deny in writing the validity or enforceability of the Guaranty
Agreement; or
(m) Any Lien and security interest purported to
be granted by any Mortgage shall cease to be effective and
enforceable or fail to be perfected, or any Mortgage shall
cease to be in full force and effect for any reason
whatsoever, including without limitation, the determination by
any governmental body or court that any Mortgage is invalid,
void or unenforceable, in each case, except with respect to
tangible personal property not material to the operation of
the affected Mortgaged Facility; or
(n) The Company or any Restricted Subsidiary
becomes insolvent or bankrupt, is generally not paying its
debts as they become due or makes an assignment for the
benefit of creditors, or the Company or any Restricted
Subsidiary applies for or consents to the appointment of a
custodian, liquidator, trustee or receiver for the Company or
such Restricted Subsidiary or for the major part of the
property of either; or
(o) Bankruptcy, reorganization, arrangement or
insolvency proceedings, or other proceedings for relief under
any bankruptcy or similar law or laws for the relief of
debtors, are instituted by or against the Company or any
Restricted Subsidiary and, if instituted against the Company
or any Restricted Subsidiary, are consented to or are not
dismissed within 60 days after such institution.
Section 6.2. Notice of Default. When any Event of Default
described in the foregoing Section 6.1 has occurred, or if any
Holder or the holder of any other evidence of Debt for Borrowed
Money of the Company gives any notice or takes any other action
with respect to a claimed default, the Company agrees to give
notice within five Business Days of such event to the Indenture
Trustee.
Section 6.3. Acceleration of Maturities. When any Event of
Default described in paragraph (a), (b) or (c) of Section 6.1 has
happened and is continuing, the Indenture Trustee may, and upon
the written request of any Holder the Indenture Trustee shall,
and when any Event of Default described in paragraphs (d) through
(m), inclusive, of said Section 6.1 has happened and is
continuing, the Indenture Trustee may, and upon the written
request of any Holder or Holders holding 25% or more of the
principal amount of Notes at the time outstanding the Indenture
Trustee shall, by notice to the
Company, declare the entire principal and all interest accrued on
all Notes to be, and all Notes shall thereupon become, forthwith
due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are hereby expressly
waived. When any Event of Default described in paragraph (n) or
(o) of Section 6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or
notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will
forthwith pay to the Indenture Trustee the entire principal and
interest accrued on the Notes and, to the extent not prohibited
by applicable law, an amount as liquidated damages for the loss
of the bargain evidenced hereby (and not as a penalty) equal to
the Make-Whole Amount, determined as of the date on which the
Notes shall so become due and payable. No course of dealing on
the part of the Indenture Trustee or the Holder or Holders nor
any delay or failure on the part of the Indenture Trustee to
exercise any right shall operate as a waiver of such right or
otherwise prejudice the Indenture Trustee's rights, powers and
remedies. The Company further agrees,
to the extent permitted by law, to pay to the Indenture Trustee
and each Holder all reasonable costs and expenses incurred by it
in the collection of any Notes upon any default hereunder or
thereon, including reasonable compensation to the Indenture
Trustee's or such Holder's attorneys for all services rendered in
connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of
Section 6.3 are subject to the condition that if the principal of
and accrued interest on all or any outstanding Notes have been
declared immediately due and payable by reason of the occurrence
of any Event of Default described in paragraphs (a) through (m),
inclusive, of Section 6.1, the Holders holding 51% in aggregate
principal amount of the Notes then outstanding may direct the
Indenture Trustee to, and the Indenture Trustee shall, by written
instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that at the
time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes, the Note
Agreement, the Guaranty Agreement or this Indenture;
(b) all arrears of interest upon all the Notes and
all other sums payable under the Notes, the Note Agreement,
the Guaranty Agreement and this Indenture, (except any
principal, interest or premium on the Notes which has become
due and payable solely by reason of such declaration under
Section 6.3) shall have been duly paid; and
(c) each and every other Default and Event of
Default shall have been made good, cured or waived pursuant to
Section 6.1;
and provided further, that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereto.
Section 6.5. Indenture Trustee's Rights. The Company agrees
that when any Event of Default has occurred and is continuing,
the Indenture Trustee may, in addition to the remedies set forth
in Section 6.3 and its rights and remedies under the Mortgages,
proceed to protect and enforce this Indenture and the Notes by
suit or suits or proceedings in equity, at law or in bankruptcy,
and whether for the specific performance of any covenant or
agreement herein, in the Notes, the Note Agreement, the Mortgages
or the Guaranty Agreement contained or in execution or aid of any
power herein or therein granted, or for the recovery of judgment
for the Secured Indebtedness or for the enforcement of any other
proper, legal or equitable remedy available under applicable law;
it being expressly understood that no remedy herein conferred is
intended to be exclusive of any other remedy or remedies, but
each and every remedy shall be cumulative and shall be in
addition to every other remedy given herein or now or hereafter
existing at law or in equity or by statute.
Section 6.6. Acceleration Clause. In case of any sale of
the Collateral, or of any part thereof, pursuant to any judgment
or decree of any court or otherwise in connection with the
enforcement of any of the terms of this Indenture or the
Mortgages, the principal of the Notes, if not previously due, and
the interest accrued thereon and all other sums required to be
paid by the Company pursuant to this Indenture, shall at once
become and be immediately due and payable; also in the case of
any such sale, the purchaser or purchasers, for the purpose of
making settlement for or payment of the purchase price, shall be
entitled to turn in and use any Note or Notes and any claims for
interest matured and unpaid thereon, in order that there may be
credited as paid on the purchase price the sum apportionable and
applicable to the Notes including principal thereof and interest
and premium, if any, thereon out of the net proceeds of such sale
after allowing for the proportion of the total purchase price
required to be paid in actual cash.
Section 6.7. Waiver by Company. To the extent now or at any
time hereafter enforceable under applicable law, the Company
covenants that it will not at any time insist upon or plead, or
in any manner whatsoever claim or take any benefit or advantage
of, any stay or extension law now or at any time hereafter in
force, nor claim, take nor insist upon any benefit or advantage
of or from any law now or hereafter in force providing for the
valuation or appraisement of the Collateral or any part thereof,
prior to any sale or sales thereof to be made pursuant to any
provision herein contained, or to the decree, judgment or order
of any court of competent jurisdiction; nor, after such sale or
sales, claim or exercise any right under any statute now or
hereafter enacted by any state or otherwise to redeem the
property so sold or any part thereof, and hereby expressly waives
for itself and on behalf of each and every Person, except decree
or judgment creditors of the Company acquiring any interest in or
title to the Collateral or any part thereof subsequent to the
date of this Indenture, all benefit and advantage of any such law
or laws, and covenants that it will not invoke or utilize any
such law or laws or otherwise hinder, delay or impede the
execution of any power herein granted and delegated to the
Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law or laws had
been made or enacted.
Section 6.8. Effect of Sale. Any sale of the Collateral,
whether under any power of sale hereby given or by virtue of
judicial proceedings, shall operate to divest all right, title,
interest, claim and demand whatsoever, either at law or in
equity, of the Company in and to the property sold and shall be a
perpetual bar, both at law and in equity, against the Company,
and its successors and assigns, and against any and all persons
claiming the property sold or any part thereof under, by or
through the Company, and its successors or assigns.
Section 6.9. Application of Sale and Other Proceeds. The
purchase money proceeds and/or avails of any sale of the
Collateral, or any part thereof, and the proceeds and the avails
of any remedy hereunder, including, without limitation, any
amounts received under and pursuant to the Guaranty Agreement,
any Mortgage or this Indenture, shall be paid to and applied as
follows:
First, to the payment of costs and expenses of
foreclosure or suit, if any, and of such sale, and of all
proper expenses, liability and advances, including any unpaid
ongoing fees for services of the Indenture Trustee and any
reasonable legal expenses and attorneys' fees, incurred or
made hereunder by the Indenture Trustee or the Holders and of
all taxes, assessments or liens superior to the lien of these
presents, except any taxes, assessments or other superior lien
subject to which said sale may have been made;
Second, to the payment of the whole amount then due,
owing and unpaid upon the Notes for principal, interest and
premium, if any; and in case such proceeds shall be
insufficient to pay in full the whole amount so due, owing or
unpaid upon the Notes, then ratably according to the aggregate
of such principal and the accrued and unpaid interest and
premium, if any, with application on each Note to be made,
first, to the unpaid interest thereof, second, to unpaid
premium, if any, thereon, and third, to unpaid principal
thereon; such application to be made upon presentation of the
several Notes, and the notation thereon of the payment, if
partially paid, or the surrender and cancellation thereof, if
fully paid; and
Third, to the payment of the surplus, if any, to the
Company, its successors and assigns, or to whomsoever may be
lawfully entitled to receive the same.
Section 6.10. Discontinuance of Remedies. In case the
Indenture Trustee shall have proceeded to enforce any right under
this Indenture by foreclosure, sale, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely, then and in every
such case the Company, the Indenture Trustee and the Holders
shall be restored to their former positions and rights hereunder
with respect to the property subject to the lien and security
interest created under this Indenture.
Section 6.11. Cumulative Remedies. No delay or omission of
the Indenture Trustee or of any Holder to exercise any right or
power arising from any default, shall exhaust or impair any such
right or power or prevent its exercise during the continuance of
such default. No waiver by the Indenture Trustee or any Holder
of any such default, whether such waiver be full or partial,
shall extend to or be taken to affect any subsequent default, or
to impair the rights resulting therefrom, except as may be
otherwise provided therein. No remedy hereunder is intended to
be exclusive of any other remedy but each and every remedy shall
be cumulative and in addition to any and every other remedy given
hereunder or otherwise existing; nor shall the giving, taking or
enforcement of any other or additional security, collateral or
guaranty for the payment of the Secured Indebtedness operate to
prejudice, waive or affect the security of this Indenture or any
rights, powers or remedies hereunder, nor shall the Indenture
Trustee or any Holder be required to first look to, enforce or
exhaust such other or additional security, collateral or
guaranties.
Section 7. The Indenture Trustee.
The Indenture Trustee accepts the trusts hereunder and
agrees to perform the same, but only upon the terms and
conditions hereof, including the following, all of which the
Company and the respective Holders at any time outstanding by
their acceptance thereof agree:
Section 7.1. Duties of Indenture Trustee. The Indenture
Trustee undertakes (i) except while an Event of Default actually
known to the Indenture Trustee shall have occurred and be
continuing, to perform such duties as are specifically set forth
in this Indenture, and (ii) while an Event of Default actually
known to the Indenture Trustee shall have occurred and be
continuing, to exercise such of the rights and powers as are
vested in it by this Indenture and to use the same degree of care
and skill in their exercise as an ordinary prudent man would
exercise or use under the circumstances in the conduct of his own
affairs.
The Indenture Trustee, upon receipt of instruments furnished
to the Indenture Trustee pursuant to the provisions of this
Indenture, shall examine the same to determine whether or not
such instruments conform to the requirements of this Indenture.
Section 7.2. Indenture Trustee's Liability. No provision of
this Indenture shall be construed to relieve the Indenture
Trustee from liability for its own negligent action, negligent
failure to act, or its own willful misconduct, except that:
(a) unless an Event of Default actually known to
the Indenture Trustee shall have occurred and be continuing,
the Indenture Trustee shall not be liable except for the
performance of such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall
be read into this Indenture against the Indenture Trustee but
the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture;
and
(b) in the absence of bad faith on the part of the
Indenture Trustee, the Indenture Trustee may rely upon the
authenticity of, and the truth of the statements and the
correctness of the opinions expressed in, and shall be
protected in acting upon, any resolution, Officer's
Certificate, opinion of counsel, note, request, notice,
consent, waiver, order, signature guaranty, notarial seal,
stamp, acknowledgment, verification, appraisal, report, stock
certificate, or other paper or document believed by the
Indenture Trustee to be genuine and to have been signed,
affixed or presented by the proper party or parties; and
(c) in the absence of bad faith on the part of the
Indenture Trustee, whenever the Indenture Trustee, or any of
its agents, representatives, experts or counsel, shall
consider it necessary or desirable that any matter be proved
or established, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by an Officer's
Certificate; provided, however, that the Indenture Trustee, or
such agent, representative, expert or counsel, may require
such further and additional evidence and make such further
investigation as it or they may consider reasonable; and
(d) the Indenture Trustee may consult with counsel
and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action
taken or suffered hereunder in good faith and in accordance
with such advice or opinion of counsel; and
(e) the Indenture Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith and consistent with this Indenture in accordance
with any direction or request of the Holders; and
(f) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by an officer of the
Indenture Trustee unless it shall be proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts; and
(g) the Indenture Trustee shall not be deemed to
have knowledge of any Default or Event of Default unless and
until an officer of the Corporate Trust Department of the
Indenture Trustee who customarily handles corporate trusts
shall have actual knowledge thereof or the Indenture Trustee
shall have received written advice thereof from any Holder or
from the Company pursuant to Section 6.2; and
(h) whether or not an Event of Default shall have
occurred, the Indenture Trustee shall not be under any
obligation to take any action under this Indenture which may
tend to involve it in any expense or liability, the payment of
which within a reasonable time is not, in its reasonable
opinion, assured to it by the security afforded to it by the
terms of this Indenture, unless and until it is requested in
writing so to do by one or more Holders and furnished, from
time to time as it may require, with reasonable security and
indemnity; and
(i) whether or not an Event of Default shall have
occurred, whenever it is provided in this Indenture that the
Indenture Trustee consent to any act or omission by any Person
or that the Indenture Trustee exercise its discretion in any
manner, the Indenture Trustee may (but need not) seek the
written acquiescence of the Holders holding at least 51% in
principal amount of the Notes then outstanding and, unless
written evidence of such acquiescence has been received by the
Indenture Trustee, it shall be fully justified in refusing so
to consent or so to exercise its discretion, provided,
however, that Holders holding 51% in principal amount of the
Notes from time to time outstanding shall have the right, upon
furnishing to the Indenture Trustee such indemnification as
the Indenture Trustee shall reasonably request, by an
instrument in writing delivered to the Indenture Trustee, to
determine which of the remedies herein set forth shall be
adopted and to direct the time, method and place of conducting
all proceedings to be taken under the provisions of this
Indenture for the enforcement thereof or of the Notes;
provided, however, that the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture
Trustee shall be advised by counsel that the action or
proceedings so directed may not lawfully be taken or would be
unjustly prejudicial to Holders not parties to such direction.
The Indenture Trustee shall not be responsible for
transmitting any moneys to the Holders pursuant to Section 2.2(b)
unless moneys from or on behalf of the Company have actually been
received by the Indenture Trustee in funds immediately available
to the Indenture Trustee.
Section 7.3. No Responsibility of Indenture Trustee for
Recitals. The recitals and statements contained herein and in
the Notes (except for the Indenture Trustee's certificate of
authentication endorsed on the Notes) shall be taken as the
recitals and statements of the Company, and the Indenture Trustee
assumes no responsibility for the correctness of the same, nor
shall the Indenture Trustee have any responsibility for or any
liability with respect to any disclosure, warranty,
representation or concealment or failure to disclose in
connection with the offering, solicitation, sale or distribution
of the Notes by the Company or by any other Person.
The Indenture Trustee makes no representation as to the
validity or sufficiency of this Indenture, or of the Notes
secured hereby, the security hereby or thereby afforded, the
title of the Company to the Collateral or the descriptions
thereof, or the filing or recording or registering of this
Indenture or any other document.
The Indenture Trustee shall not be concerned with or
accountable to any Person for the use or application of any
deposited moneys which shall be released or withdrawn in
accordance with the provisions of this Indenture or of any
property or Securities or the proceeds thereof which shall be
released from the lien hereof in accordance with the provisions
of this Indenture.
Section 7.4. Compensation and Expenses of Trustees; Certain
Limitations on Indenture Trustee's Rights to Compensation and
Indemnification. The Company covenants to pay to the Indenture
Trustee such compensation for their services hereunder and under
the Mortgages as shall be agreed to by the Company and the
Indenture Trustee, or, in the absence of such agreement,
reasonable compensation therefor (which shall not be limited by
any provision of law in regard to the compensation of a trustee
of an express trust), and to pay, or reimburse, the Indenture
Trustee for all reasonable expenses incurred hereunder including
the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Indenture
Trustee may employ in connection with the exercise and
performance of their powers and duties hereunder.
The Company will also indemnify and save the Indenture
Trustee, its agents, employees and representatives, harmless
against any expenses (including reasonable attorneys' fees),
liabilities and damages, not arising from its own willful
misconduct or negligence, which it or any of them may incur in
the exercise and performance of its rights, powers, trusts,
duties and obligations hereunder.
Except to the extent otherwise expressly provided in this
Indenture and the Mortgages, the Indenture Trustee shall have no
right against any Holder for the payment of compensation for its
services hereunder or any expenses or disbursements incurred in
connection with the exercise and performance of its powers and
duties hereunder or any indemnification against liabilities which
it may incur in the exercise and performance of such powers and
duties but on the contrary, shall look solely to the Company for
such payment and indemnification, and it shall have no lien on or
security interest in the Collateral as security for such
compensation, expenses, disbursements and indemnification except
to the extent provided for in Section 6.9.
Section 7.5. Status of Moneys Received. (a) All moneys
received by the Indenture Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they
were received, but (except as herein otherwise provided with
respect to the funds referred to in paragraph (b) of this Section
7.5) need not be segregated in any manner from any other moneys,
except to the extent required by law, and shall be deposited by
the Indenture Trustee in a trust account under such general
conditions as may be prescribed by law in a state or national
bank in good standing, organized under the laws of the United
States of America or of any state thereof, having capital,
surplus and undivided profits aggregating at least $200,000,000
and whose long-term debt is rated AA or better by Standard and
Poor's Corporation or Aa or better by Moody's Investors Service,
Inc. and the Indenture Trustee shall be under no liability for
interest on any moneys received by it hereunder. The Indenture
Trustee and any affiliated corporation may become the owner of
any Secured Indebtedness and be interested in any financial
transaction with the Company or any affiliated
corporation, or the Indenture Trustee may act as depository or
otherwise in respect to other Securities of the Company or any
affiliated corporation with the same rights which it would have
if not the Indenture Trustee to the extent permitted by the Trust
Indenture Act of 1939, as amended.
(b) The Indenture Trustee may, and at the direction of the
Company shall, invest and reinvest any funds from time to time
held by the Indenture Trustee in direct obligations of the United
States of America or obligations for which the full faith and
credit of the United States is pledged to provide for the payment
of principal and interest, maturing not more than 90 days from
the date of such investment. Upon any sale or payment of any
investment, the proceeds thereof, plus any interest received by
the Indenture Trustee thereon shall be held by the Indenture
Trustee as part of the fund from which such investment was made
for application as a part of such fund; provided, however, that
in the event that an Event of Default shall have occurred and be
continuing hereunder, such investment and reinvestment shall be
at the direction of the Holders holding not less than 51% in
aggregate principal amount of the Notes then outstanding. In the
absence of any direction pursuant to this paragraph (b), the
Indenture Trustee may hold such funds uninvested.
Section 7.6. Resignation of Indenture Trustee. The
Indenture Trustee may resign and be discharged from the trusts
created hereby by delivering notice thereof, by first-class mail
postage prepaid to the Company and all Holders, specifying a date
(not earlier than 90 days after the date of such notice) when
such resignation shall take effect.
Such resignation shall take effect on the day specified in
such notice, unless previously a successor Indenture Trustee
shall have been appointed as provided in Sections 7.8 and 7.9, in
which event such resignation shall take effect immediately upon
the appointment of such successor Indenture Trustee; provided,
however, that no such resignation shall be effective hereunder
unless and until a successor Indenture Trustee shall have been
appointed and shall have accepted such appointment as provided in
Sections 7.8 and 7.9.
Section 7.7. Removal of Indenture Trustee. The Indenture
Trustee may be removed at any time, for or without cause, by an
instrument or instruments in writing executed by the Holders
holding not less than 51% in aggregate principal amount of the
Notes (other than the Indenture Trustee) at the time outstanding
and delivered to the Indenture Trustee with a copy to the
Company, specifying the removal and the date when it shall take
effect; provided, however, that no such removal shall be
effective hereunder unless and until a successor Indenture
Trustee shall have been appointed and shall have accepted such
appointment as provided in Section 7.8 and 7.9.
Section 7.8. Appointment of Successor Indenture Trustee. In
case at any time the Indenture Trustee shall resign or be removed
or become incapable of acting, a successor Indenture Trustee
reasonably acceptable to the Company may be appointed by the
Holders holding not less than 51% in aggregate principal amount
of the Notes (other than the Indenture Trustee) at the time
outstanding, by an instrument or instruments in writing executed
by such Holders and filed with such successor Indenture Trustee
and the Company.
Until a successor Indenture Trustee shall be so appointed by
the Holders, the Company shall appoint a successor Indenture
Trustee to fill such vacancy, by an instrument in writing
executed by the Company and delivered to the successor Indenture
Trustee. If all or substantially all of the Collateral shall be
in the possession of one or more receivers, trustees, liquidators
or assignees for the benefit of creditors, then such receivers,
trustees, custodians, liquidators or assignees may, by an
instrument in writing delivered to the successor Indenture
Trustee, appoint a successor Indenture Trustee. Promptly after
any such appointment, the Company, or any such receivers,
trustees, custodians, liquidators or assignees, as the case may
be, shall give notice thereof by first class mail postage prepaid
to each Holder.
Any successor Indenture Trustee so appointed by the Company,
or such receivers, trustees, custodians, liquidators or
assignees, shall immediately and without further act be
superseded by a successor Indenture Trustee appointed by the
Holders holding not less than 51% in aggregate principal amount
of the Notes then outstanding (other than the Indenture Trustee).
If a successor Indenture Trustee shall not be appointed
pursuant to this Section 7.8 within sixty days after the
resignation or removal of the retiring Indenture Trustee, any
Holder or such retiring Indenture Trustee (unless the retiring
Indenture Trustee is being removed) may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee,
and such court may thereupon, after such notice, if any, as it
may consider proper, appoint a successor Indenture Trustee.
Section 7.9. Succession of Successor Indenture Trustee. Any
successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and the predecessor
Indenture Trustee an instrument accepting such appointment, and
thereupon such successor Indenture Trustee, without any further
act, deed, conveyance or transfer, shall become vested with the
title to the Collateral, and with all the rights, powers, trusts,
duties and obligations of the predecessor Indenture Trustee in
the trust hereunder, with like effect as if originally named as
Indenture Trustee herein.
Upon the request of any such successor Indenture Trustee,
however, the Company and the predecessor Indenture Trustee shall
execute and deliver such instruments of conveyance and further
assurance and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in such
successor Indenture Trustee its interest in the Collateral and
all such rights, powers, trusts, duties and obligations of the
predecessor Indenture Trustee hereunder, and the predecessor
Indenture Trustee shall also assign and deliver to the successor
Indenture Trustee any property subject to the lien of this
Indenture which may then be in its possession.
Section 7.10. Eligibility of Indenture Trustee. The
Indenture Trustee shall be a state or national bank or trust
company in good standing, organized under the laws of the United
States of America or of any state thereof, having a capital,
surplus and undivided profits aggregating at least $200,000,000
and whose long-term debt is rated AA or better by Standard &
Poor's Corporation or Aa or better by Moody's Investors Service,
Inc., if there be such a bank or trust company willing and able
to accept such trust upon reasonable and customary terms.
For purposes of the foregoing, so long as (i) an absolute
and unconditional parent guarantee of the corporate parent of the
Indenture Trustee (which corporate parent is organized under the
laws of the United States or any state thereof) substantially in
the form attached hereto as Annex III shall be in full force and
effect with respect to all obligations of the Indenture Trustee
under this Indenture and (ii) an opinion in scope, form and
substance reasonably satisfactory to the beneficiaries of such
parent guarantee shall have been provided by counsel for the
corporate parent of the Indenture Trustee (which counsel shall be
satisfactory to the Company and the holders of the Notes) on the
date of execution and delivery of the parent guarantee referred
to in clause (i) above, the "capital, surplus and undivided
profits" requirement set forth above with respect to the
Indenture Trustee shall be satisfied if the tangible net worth
(or combined capital and surplus if such guarantor is a bank) of
such corporate parent is at least $200,000,000.
In case the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the
Indenture Trustee shall resign immediately in the manner and with
the effect specified in Section 7.6.
Section 7.11. Successor Indenture Trustee by Merger. Any
corporation into which the Indenture Trustee may be merged or
with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Indenture Trustee
shall be a party, or any state or national bank or trust company
in any manner succeeding to the corporate trust business of the
Indenture Trustee as a whole or substantially as a whole, if
eligible as provided in Section 7.10, shall be the successor of
the Indenture Trustee hereunder without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, anything to the contrary contained herein
notwithstanding.
Section 7.12. Co-Trustees. At any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any
part of the Collateral may at the time be located, the Company
and the Indenture Trustee jointly shall have power and shall
execute and deliver all instruments, to appoint one or more
persons approved by the Indenture Trustee, to act as co-trustee,
or co-trustees, jointly with the Indenture Trustee, or separate
trustee or separate trustees, of all or any part of the
Collateral, and to vest in such person or persons in such
capacity, such interest in the Collateral or any part thereof,
and such rights, powers, duties, trusts or obligations as the
Company and the Indenture Trustee may consider necessary or
desirable. If the Company shall not have joined in such
appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and
be continuing, the Indenture Trustee alone shall have power to
make such appointment.
Section 8. Supplements; Waivers; Consents.
Section 8.1. Supplemental Indentures without Holder Consent.
The Company and the Indenture Trustee from time to time and at
any time, subject to the restrictions in this Indenture
contained, may enter into an indenture or indentures supplemental
hereto, which thereafter shall form a part hereof, for any one or
more or all of the following purposes:
(a) to subject to the lien of this Indenture
additional property hereafter acquired by the Company and
intended to be subjected to the lien of this Indenture and to
correct and amplify the description of any property subject to
the lien of this Indenture; and
(b) to permit the qualification of this Indenture
under the Trust Indenture Act of 1939, as amended, or any
similar Federal statute hereafter in effect, except that
nothing herein contained shall permit or authorize the
inclusion of the provisions referred to in Section 316(a)(2)
of said Trust Indenture Act of 1939 or any corresponding
provision in any similar Federal statute hereafter in effect;
and the Company covenants to perform all requirements of any such
supplemental indenture. No restriction or obligation imposed
upon the Company may, except as otherwise provided in this
Indenture, be waived or modified by any such supplemental
indenture.
Section 8.2. Waivers and Consents by Holders; Supplemental
Indentures with Holders' Consent. Upon the waiver or consent of
the Holders holding at least 51% in aggregate principal amount of
the Notes then outstanding (a) the Company may take any action
prohibited, or omit the taking of any action required, by any of
the provisions of this Indenture or any indenture supplemental
hereto, or (b) the Company and the Indenture Trustee may enter
into an indenture or indentures supplemental hereto for the
purpose of adding, changing or eliminating any provisions of this
Indenture or of any indenture supplemental hereto or modifying in
any manner the rights and obligations of the Holders and the
Company; provided, however, that no such waiver or supplemental
indenture shall (i) impair or affect the right of any Holder to
receive payments or prepayments of the principal of and payments
of the interest and premium, if any, on its Note, in the amount
and at the time, place, currency therein provided and as
otherwise therein and herein provided, without the consent of
such Holder, (ii) permit the creation of any lien with respect to
any of the Collateral, without the consent of the Holders holding
all the Notes at the time outstanding, (iii) subject to Section
4.2, effect the deprivation of any Holder of the benefit of the
lien of this Indenture upon all or any
part of the Collateral without the consent of such Holder,
(iv) change the aforesaid percentage of the aggregate principal
amount of Notes, the Holders of which are required to consent to
any such waiver or supplemental indenture pursuant to this
Section 8.2, without the consent of the Holders of all of the
Notes at the time outstanding, (v) modify the rights, duties or
immunities of the Indenture Trustee without the consent of the
Indenture Trustee and the Holders holding all of the Notes at the
time outstanding, or (vi) amend the provisions of Section 6 or
the definition of Make-Whole Amount contained herein, without the
consent of the Holders of all of the Notes at the time
outstanding.
Section 8.3. Solicitation of Holders. So long as there are
any Notes outstanding, the Company will not solicit, request or
negotiate for or with respect to any proposed waiver or
supplement of any of the provisions of this Indenture, the Notes,
the Note Agreement or the Mortgages unless each Holder
(irrespective of the amount of Notes then owned by it) shall be
informed thereof by the Company and shall be afforded the
opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an
informed decision with respect thereto. The Company will not,
directly or indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or
otherwise, to any Holder as consideration for or as an inducement
to entering into by any Holder of any waiver or supplement of any
of the terms and provisions of this Indenture, the Notes, the
Note Agreement or the Mortgages unless such remuneration is
concurrently offered, on the same terms, ratably to all Holders.
Section 8.4. Effect of Supplement or Waiver. Any such
supplement or waiver shall apply equally to all of the Holders
and shall be binding upon them, upon each future Holder and upon
the Company, whether or not any Note shall have been marked to
indicate such supplement or waiver. No such supplement or waiver
shall extend to or affect any obligation not expressly amended or
waived or impair any right consequent thereon.
Section 8.5. Notice of Supplements. Promptly after the
execution by the Company and the Indenture Trustee of any
supplemental indenture or agreement pursuant to the provisions of
Sections 8.1 or 8.2, the Indenture Trustee shall give written
notice, setting forth in general terms the substance of such
supplemental indenture or agreement, together with a conformed
copy thereof, mailed first-class postage prepaid, to each Holder
at its address set forth in the Register. Any failure of the
Indenture Trustee to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of
any such supplemental indenture or agreement.
Section 8.6. Opinion of Counsel Conclusive as to
Supplements. The Indenture Trustee is hereby authorized to join
with the Company in the execution of any such supplemental
indenture or agreement authorized or permitted by the terms of
this Indenture and to make the further agreements and
stipulations which may be therein contained, and the Indenture
Trustee may receive an opinion of counsel selected by the
Indenture Trustee (which may be independent
counsel for the Company) as conclusive evidence that any
supplemental indenture or agreement executed pursuant to the
provisions of this Section 8 complies with the requirements of
this Section 8.
Section 9. Miscellaneous.
Section 9.1. Successors and Assigns. Whenever any of the
parties hereto is referred to such reference shall be deemed to
include the successors and assigns of such party; and all the
covenants, promises and agreements in this Indenture contained by
or on behalf of the Company or by or on behalf of the Indenture
Trustee shall bind and inure to the benefit of the respective
successors and assigns of such parties whether so expressed or
not.
Section 9.2. Severability. Any provision of this Indenture
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 9.3. Communications. All communications provided
for herein shall be in writing, delivered or mailed by registered
or certified mail, or by overnight air courier or transmitted by
telefacsimile communication; provided, however, that a notice by
mail or overnight air courier shall only be effective if
delivered at a street address designated below and a notice by
telefacsimile communication shall only be effective if made by
confirmed transmission at the telephone number designated below
and promptly followed by the delivery of such notice by
registered or certified mail or overnight air courier:
If to the Company: Care Enterprises, Inc.
2742 Dow Avenue
Tustin, California 92680
Attention: Chief
Financial Officer
Telefacsimile number:
(714) 544-4443 ext. 2701
Telephone number:
(714) 544-4443
If to the Indenture Trustee: State Street Bank and Trust
Company of Connecticut,
National Association
750 Main Street
Suite 1114
Hartford, Connecticut 06103
Attention: Corporate Trust
Department
Telefacsimile number:
(203) 244-1899
Telephone number:
(203) 244-1800
or to the Company or the Indenture Trustee at such other address
as the Company or the Indenture Trustee may designate by notice
duly given in accordance with this Section 9.3 to the other.
Communications to any Holder shall be given in accordance with
the instructions set forth in Section 7.4 of the Note Agreement.
Section 9.4. Release. The Indenture Trustee shall release
this Indenture and the lien and security granted hereby by proper
instrument or instruments upon presentation of satisfactory
evidence that all Secured Indebtedness has been indefeasibly
fully paid or discharged.
Section 9.5. Counterparts. This Indenture may be executed,
acknowledged and delivered in any number of counterparts, each of
such counterparts constituting an original but all together only
one Indenture.
Section 9.6. Governing Law. This Indenture and the Notes
shall be construed in accordance with and governed by the laws of
the State of New York.
Section 9.7. Submission to Jurisdiction. The Company hereby
consents to the jurisdiction of any state or Federal court
located within the County of New York, State of New York, and
irrevocably agrees that all actions or proceedings relating to
this Agreement or the Notes may be litigated in such courts, and
the Company waives any objection which it may have based on
improper venue or forum non conveniens to the conduct of any
proceeding in any such court, and consents that all service of
process may be made by certified mail or messenger directed to it
at the address of the Company set forth in Section 5.4 or to its
agent referred to below at such agent's address set forth below
and that service so made shall be
deemed to be completed upon the earlier of actual receipt or the
date identified on the return receipt for the certified mailing
to the Company's or such agent's address, as the case may be, in
accordance herewith. The Company hereby irrevocably appoints CT
Corporation System, with an office on the date hereof at 1633
Broadway, New York, New York 10019, as its agent for the purpose
of accepting service of any process within the State of New York.
Nothing contained in this section shall affect the right of any
holder of Notes to serve legal process in any other manner
permitted by law or to bring any action or proceeding in the
courts of any jurisdiction against the Company or to enforce a
judgment obtained in the courts of any other jurisdiction.
Section 9.8. Headings. Any headings or captions preceding
the text of the several sections hereof are intended solely for
convenience of reference and shall not constitute a part of this
Indenture nor shall they affect its meaning, construction or
effect.
Section 9.9. Effective Date. This Indenture is dated for
convenience of reference as of December 15, 1993, but was
actually executed and delivered by the Company and the Indenture
Trustee on the dates indicated in the following acknowledgments.
In Witness Whereof, the Company has caused this Indenture to
be executed on its behalf; and the Indenture Trustee in evidence
of its acceptance of the trusts hereby created, has caused this
Indenture to be executed on its behalf.
CARE ENTERPRISES, INC.
By /s/ GARY L. MASSIMINO
Its Executive Vice President
State Street Bank and Trust
Company of Connecticut,
National Association
By /s/ W. Jeffrey Kramer
Its Assistant Vice President
as Indenture Trustee
GUARANTY AGREEMENT
Dated as of December 15, 1993
Re: $30,000,000 8.10% Senior Secured Notes
Due December 15, 2000
of
CARE ENTERPRISES, INC.
GUARANTY AGREEMENT
To the Holders from time to time
of the Notes described below.
Ladies and Gentlemen:
Pursuant to the terms of the Note Agreement, dated as of
December 15, 1993 (the "Note Agreement"), between Care
Enterprises, Inc., a Delaware Corporation (the "Company"), the
Purchasers named in Schedule I thereto (the "Purchasers"), on the
date hereof such Purchasers are severally purchasing $30,000,000
aggregate principal amount of Senior Secured Notes, due
December 15, 2000 (the "Notes"), of Care Enterprises, Inc., a
Delaware corporation (the "Company"), which Notes are issued
under and pursuant to the Indenture of Trust, dated as of
December 15, 1993 (the "Indenture"), between State Street Bank
and Trust Company of Connecticut, National Association, as
trustee (the "Indenture Trustee"), and the Company. Pursuant to
the provisions of Section 1.5 of the Note Agreement, payment of
all amounts in respect of the Notes is to be jointly and
severally guaranteed by an unconditional guaranty of the
Guarantors (as defined in the Note Agreement), which are
signatories to this Guaranty Agreement. The Purchasers and each
and every other holder from time to time of the Notes are
sometimes hereinafter collectively referred to as the "Holders"
and, individually, a "Holder". The signatories of this Guaranty
Agreement are hereinafter collectively referred to as the
"Guarantors" and individually as a "Guarantor". Capitalized
terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Note Agreement.
Certain of the benefits to the Guarantors from the delivery of
this Guaranty Agreement and the consideration thereof are as set
forth in the letter of the Guarantors to the Purchasers attached
as Exhibit A hereto.
In compliance with the requirements of the Note Agreement and as
an inducement to and in consideration of the several purchases by
the Purchasers on the date hereof of the Notes, the net proceeds
of which Notes will be used for the purposes specified on
Schedule I and to facilitate the obtaining by the Guarantors of
additional capital in the future whether by direct borrowing or
from the proceeds of future borrowings by the Company and in
consideration of the provision by the Company of substantial
financial, accounting and other administrative services to each
of the Guarantors, each Guarantor does hereby covenant and agree
with the Purchasers and with each and every subsequent holder of
any of the Notes as follows:
Section 1. Representations and Warranties of each of the
Guarantors.
Each Guarantor hereby represents and warrants to the
Purchasers as follows:
(a) Corporate Organization and Authority. Such Guarantor
is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) Transaction Is Legal and Authorized. The issuance of
this Guaranty Agreement and compliance with all of the provisions
of this Guaranty Agreement ----
(1) are within the corporate powers of such Guarantor;
(2) will not violate any provisions of any law or any order
of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under the
Certificate of Incorporation or Articles of Incorporation, as the
case may be, or By-laws of such Guarantor or any indenture or
other agreement or instrument to which such Guarantor is a party
or by which it may be bound or result in the imposition of any
Liens or encumbrances on any property of such Guarantor;
(3) have been duly authorized by proper corporate action on
the part of such Guarantor (no action by the stockholders of
such Guarantor being required by law and not already obtained,
by the Certificate of Incorporation or Articles of Incorporation,
as the case may be, or By-laws of such Guarantor or otherwise),
executed and delivered by such Guarantor, and this Guaranty
Agreement constitutes the legal, valid and binding obligation,
contract and agreement of such Guarantor enforceable in
accordance with its terms, subject to bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at
law.
(c) Governmental Consent. No approval, consent or
withholding of objection on the part of any regulatory body,
Federal, state or local, is necessary in connection with the
execution and delivery by each Guarantor of this Guaranty
Agreement or compliance by such Guarantor with any of the
provisions of this Guaranty Agreement.
(d) Benefit to Guarantor. Such Guarantor's guaranty
pursuant to this Guaranty reasonably may be expected to benefit,
directly or indirectly, such Guarantor.
(e) Solvency. After giving effect to this Guaranty
Agreement, (i) such Guarantor is solvent, has capital not
unreasonably small in relation to its respective business or any
contemplated or undertaken transaction and has assets having a
value both at fair valuation and at present fair saleable value
greater than the amount required to pay such Guarantor's debts as
they become due and greater than the amount that will be required
to pay such Guarantor's probable liability on its respective
existing debts as they become absolute and matured; (ii) such
Guarantor does not intend to incur or believe or should have
believed that it will incur, debts beyond its respective ability
to pay such debts as they become due; (iii) such Guarantor will
not be rendered insolvent by the execution, delivery and
performance of its respective obligations under this Guaranty
Agreement; and (iv) such Guarantor does not intend to hinder,
delay or defraud its creditors by or through the execution,
delivery or performance of its respective obligations under this
Guaranty Agreement.
Section 2. Guaranty.
Section 2.1. Each Guarantor hereby guarantees irrevocably,
absolutely, unconditionally, jointly and severally (i) the full
and prompt payment of the principal of, premium, if any, and
interest on the Notes from time to time outstanding, as and when
such payments become due and payable (including interest on
overdue payments of principal, premium or interest at the rate
set forth in the Notes), (ii) the full and prompt payment of all
reasonable attorneys' fees, costs and expenses of collection in
reasonable amounts incurred by the Indenture Trustee in
connection with the enforcement of this Guaranty Agreement,
(iii) the full and prompt performance by the Company of all
obligations thereof under the provisions of the Note Agreement,
the Indenture and the Mortgages (as such term is defined in the
Note Agreement), and (iv) if the Guarantors shall fail to make
any payment required to be made to any Holder under this
Section 2.1 on the date such payment is due hereunder, full and
prompt payment of interest on the amount of such payment, at the
rate of interest then in effect with respect to overdue payments
of principal or interest on the Notes concerned, from the date
such payment was required to be made until the same is actually
paid by the Guarantors to such Holder or the Indenture Trustee.
Section 2.2. This is a guaranty of payment and performance and
each Guarantor hereby waives any right to require that any action
on or in respect of any Note be brought against the Company or
any other Guarantor or that resort be had to any direct or
indirect security for the Notes or for this guaranty or any other
remedy. Any Holder may, at its option, direct the Indenture
Trustee to proceed hereunder against any Guarantor in the first
instance to collect monies when due, the payment of which is
guaranteed hereby, without first proceeding against the Company
or any other person and without first resorting to the Mortgages
or any other direct or indirect security for the Notes, or for
this guaranty or any other remedy. The liability of each
Guarantor hereunder shall in no way be affected or impaired by
any acceptance by any Holder or the Indenture Trustee on behalf
of any Holder of any direct or indirect security for, or other
guaranties of, any indebtedness, liability or obligation of the
Company, any other Guarantor or any other person to any Holder or
by any failure, delay, neglect or omission by any Holder or the
Indenture Trustee to realize upon or protect any such
indebtedness, liability or obligation or any notes or other
instruments evidencing the same or any direct or indirect
security therefor or by any approval, consent, waiver, or other
action taken, or omitted to be taken, by any Holder or the
Indenture Trustee.
Section 2.3. Each Guarantor hereby consents and agrees that any
Holder from time to time, with or without any further notice to
or assent from such Guarantor may, without in any manner
affecting the liability of such Guarantor, and upon such terms
and conditions as such Holder may deem advisable: (1) extend in
whole or in part (by renewal or otherwise), modify, change,
compromise, release or extend the duration of the time for the
performance or payment of, any indebtedness, liability or
obligation of the Company or of any other person secondarily or
otherwise liable for any indebtedness, liability or obligations
of the Company on the Notes, or waive any default with respect
thereto, or waive, modify, amend or change any provision of any
other instruments, and, subject to the provisions of Section 4.1
hereof, this Guaranty Agreement; (2) sell, release, surrender,
modify, impair, exchange or substitute any and all property, of
any nature and from whomsoever received, held by, or on behalf
of, any Holder as direct or indirect security for the payment or
performance of any indebtedness, liability or obligation of the
Company or of any other person secondarily or otherwise liable
for any indebtedness, liability or obligation of the Company on
the Notes; and (3) settle, adjust or compromise any claim of the
Company against any other person secondarily or otherwise liable
for any indebtedness, liability or obligation of the Company on
the Notes. Each Guarantor hereby ratifies and confirms any such
extension, renewal, change, sale, release, waiver, surrender,
exchange, modification, amendment, impairment, substitution,
settlement, adjustment or compromise and agrees that the same
shall be binding upon it, and hereby waives any and all defenses,
counterclaims or offsets which it might or could have by reason
thereof, it being understood that each Guarantor shall at all
times be bound by this Guaranty Agreement and remain liable
hereunder.
Section 2.4. Each Guarantor hereby waives: (1) notice of
acceptance of this Guaranty Agreement by the Holders or of the
creation, renewal or accrual of any liability of the Company,
present or future, or of the reliance of the Holders upon this
Guaranty Agreement (it being understood that every indebtedness,
liability and obligation described in Section 2.1 hereof shall
conclusively be presumed to have been created, contracted or
incurred in reliance upon the execution of this Guaranty
Agreement); (2) demand of payment by the Holders from the Company
or any other person indebted in any manner on or for any of the
indebtedness, liabilities or obligations hereby guaranteed; and
(3) presentment for payment by the Holders or any other person of
the Notes of the Company or any other instrument, protest thereof
and notice of its dishonor to any party thereto and to any
Guarantor.
Section 2.5.; Upon an Event of Default, the Holders may elect,
at their option and in their sole discretion, to direct the
Indenture Trustee to non-judicially or judicially foreclose
against any Mortgaged Property (as such term is defined in the
Mortgages) or exercise any other remedy against the Company.
Each Guarantor acknowledges that if the Holders elect to
foreclosure non-judicially upon any Mortgaged Property, in
accordance with the provisions of the Indenture, it would, but
for the waiver contained herein, have a defense to liability
under this Guaranty Agreement because such action would destroy
its subrogation rights against the Company. Each Guarantor
hereby knowingly, expressly and specifically waives such defense
and agrees that neither the non-judicial nor judicial foreclosure
by the Indenture Trustee on behalf of the Holders will release or
limit its liability to the Holders, including its obligation to
pay any deficiency after a nonjudicial foreclosure, even if the
effect of that action is to deprive it of the right to collect
reimbursement from the Company for any sums paid to the Holders
or the Indenture Trustee on their behalf. To the extent
permitted by law, without limiting the generality of the
foregoing, each Guarantor hereby expressly waives any and all
benefits under California Code of Civil Procedure Sections 580a,
580d and 726.
Section 2.6. Except as otherwise required by law, each payment by
the Guarantors under this Guaranty Agreement shall be made
without setoff or counterclaim.
Section 2.7. Each Guarantor hereby waives, and agrees that it
shall not exercise, any rights of subrogation to which it may at
any time be entitled by virtue of the performance by such
Guarantor of any of the obligations of such Guarantor under this
Guaranty Agreement until such time as all amounts payable under
the Notes, the Note Agreement and the Indenture shall have been
duly paid in full.
Section 3. Character of Obligations of Guarantors;.
Section 3.1. The liability of each Guarantor under this
Guaranty Agreement shall be an absolute, direct, immediate and
unconditional guaranty of payment and not of collectibility and
said liability shall not terminate until all amounts payable with
respect to the Notes, the Note Agreement and the Indenture shall
have been paid in full (and said liability shall immediately be
reinstated in the event that any such amounts shall, for any
reason whatsoever, be required to be returned to the Company or
to any Guarantor by the recipient thereof).
Section 3.2. The obligations of each Guarantor under this
Guaranty Agreement and the rights of the Holders to enforce such
obligations by any proceedings, whether by action at law, suit in
equity or otherwise, shall not be subject to any reduction,
limitation, impairment or termination, whether by reason of any
claim of any character whatsoever or otherwise, including,
without limitation, claims of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense
(other than final, indefeasible payment of all obligations
guaranteed hereunder), set-off, counterclaim (other than any
compulsory counterclaim), recoupment or termination whatsoever.
Section 3.3. Without limiting the generality of the
foregoing, no obligations of any Guarantor shall be discharged or
impaired or otherwise affected by:
(a) any default, failure or delay, willful or otherwise, in
the performance by the Company of any obligations of any kind or
character whatsoever of the Company (including, without
limitation, the obligations and undertakings of the Company under
the Note Agreement, the Indenture and the Mortgages);
(b) any creditors' rights, bankruptcy, receivership or
other insolvency proceeding of the Company or any other person or
in respect of the property of the Company or any other person or
any merger, amalgamation, consolidation, reorganization,
dissolution, liquidation or winding up of the Company or any
other person;
(c) impossibility or illegality of performance on the part
of the Company of its obligations under the Notes, the Note
Agreement, the Indenture, the Mortgages or any other instruments;
(d) the invalidity or unenforceability of the Notes, the
Note Agreement, the Indenture, the Mortgages or any other
instruments;
(e) the amendment of, supplement to or waiver of any
provision of, the Notes, the Note Agreement, the Indenture, the
Mortgages or any other instruments;
(f) in respect of the Company or any other person, any
change of circumstances, whether or not foreseen or foreseeable,
whether or not imputable to the Company or any other person, or
other impossibility of performance through fire, explosion,
accident, labor disturbance, floods, droughts, embargoes, wars
(whether or not declared), civil commotions, acts of God or the
public enemy, delays or failure of suppliers or carriers,
inability to obtain materials, action of any federal or state
regulatory body or agency, change of law or any other causes
affecting performance, or any other force majeure, whether or not
beyond the control of the Company or any other person and whether
or not of the kind hereinbefore specified;
(g) any attachment, claim, demand, charge, lien, order,
process, encumbrance or any other happening or event or reason,
similar or dissimilar to the foregoing, or any withholding or
diminution at the source, by reason of any taxes, assessments,
expenses, indebtedness, obligations or liabilities of any
character, foreseen or unforeseen, and whether or not valid,
incurred by or against any person, or any claims, demands,
charges or liens of any nature, foreseen or unforeseen, incurred
by any person, or against any sums payable under this Guaranty
Agreement, so that such sums would be rendered inadequate or
would be unavailable to make the payments herein provided;
(h) any order, judgment, decree, ruling or regulation
(whether or not valid) of any court of any nation or of any
political subdivision thereof or any body, agency, department,
official or administrative or regulatory agency of any thereof or
any other action, happening, event or reason whatsoever which
shall delay, interfere with, hinder or prevent, or in any way
adversely affect, the performance by any party of its respective
obligations under any instruments; or
(i) any defense or benefits that may be derived from or
afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of
this Guaranty Agreement, including without limitation the
provisions of California Civil Code Sections 2809, 2810, 2819,
2839, 2845, 2846, 2849, 2850, 2899 and 3433; or
(j) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, any Guarantor in
respect of the obligations of such Guarantor under this Guaranty
Agreement.
Section 3.4. The liability of each Guarantor under this
Guaranty Agreement shall be reflected in the financial statements
(or the notes thereto) of each Guarantor and in the consolidated
financial statements (or the notes thereto) of the Company and
the Subsidiaries.
Section 4. Limitation on Amount Guarantied; Contribution
by Guarantors.
Section 4.1. Anything contained in this Guaranty Agreement
to the contrary notwithstanding, the obligations of each
Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable
state law (collectively, the "Fraudulent Transfer Laws"), in each
case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer laws (specifically excluding, however, any
liabilities of such Guarantor (x) in respect of intercompany
indebtedness to Company or other affiliates of Company to the
extent that such indebtedness would be discharged in an amount
equal to the amount paid by such Guarantor hereunder and (y)
under any guaranty of subordinated Indebtedness which guaranty
contains a limitation as to maximum amount similar to that set
forth in this Section 4.1, pursuant to which the liability of
such Guarantor hereunder is included in the liabilities taken
into account in determining such maximum amount) and after giving
effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, reimbursement or contribution of such Guarantor
pursuant to (i) applicable law or (ii) any agreement providing
for an equitable allocation among such Guarantor and other
affiliates of Company of obligations arising under guaranties by
such parties.
Section 4.2.; Guarantors under this Guaranty Agreement together
desire to allocate among themselves, in a fair and equitable
manner, their obligations arising under this Guaranty Agreement.
Accordingly, in the event any payment or distribution is made on
any date by any Guarantor under this Guaranty Agreement (a
"Funding Guarantor") that exceeds its Fair Share (as defined
below) as of such date, that Funding Guarantor shall be entitled
to a contribution from each of the other Guarantors in the amount
of such other Guarantor's Fair Share Shortfall (as defined below)
as of such date, with the result that all such contributions will
cause each Guarantor's Aggregate Payments (as defined below) to
equal its Fair Share as of such date. "Fair Share" means, with
respect to a Guarantor as of any date of determination, an amount
equal to (i) the ratio of (x) the Adjusted Maximum Amount (as
defined below) with respect to such Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all
Guarantors, multiplied by (ii) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors
under this Guaranty Agreement in respect of the obligations
guarantied. "Fair Share Shortfall" means, with respect to a
Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Guarantor over the Aggregate Payments of
such Guarantor. "Adjusted Maximum Amount" means, with respect to
a Guarantor as of any date of determination, the maximum
aggregate amount of the obligations of such Guarantor under this
Guaranty Agreement, determined as of such date in accordance with
Section 4.1 hereof provided that, solely for purposes of
calculating the "Adjusted Maximum Amount" with respect to any
Guarantor for purposes of this Section 4.2, any assets or
liabilities of such Guarantor arising by virtue of any rights to
subrogation or reimbursement or any rights to or obligations of
contribution hereunder shall not be considered as assets or
liabilities of such Guarantor. "Aggregate Payments" means, with
respect to a Guarantor as of any date of determination, an amount
equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Guarantor in
respect of this Guaranty Agreement (including, without
limitation, in respect of this Section 4.2 minus (ii) the
aggregate amount of all payments received on or before such date
by such Guarantor from the other Guarantors as contributions
under this subsection Section 4.2. The amounts payable as
contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Guarantors of
their obligations as set forth in this Section 4.2 shall not be
construed in any way to limit the liability of any Guarantor
hereunder.
Section 5. Miscellaneous.
Section 5.1. Amendment and Waiver. Any term, agreement or
condition of this Guaranty Agreement may, with the consent of
each Guarantor, be amended or compliance therewith may be waived
(either generally or in a particular instance and either
retroactively or prospectively), if the Holders holding at least
51% in aggregate principal amount of the Notes then outstanding
(excluding Notes held by the Company, or any Restricted
Subsidiary) shall have consented in writing to such amendment or
waiver; provided that without the written consent of the Holders
holding all of the Notes then outstanding, no such amendment or
waiver shall be effective (i) which will affect any of the
obligations with respect to payment hereunder, or (ii) which will
change any of the provisions with respect to the circumstances of
payment hereunder or (iii) which will amend this Section 5.1.
Section 5.2. No Waiver. No delay or omission on the part
of the Holders or any Holder, or the Indenture Trustee on its or
their behalf, to exercise any right or power accruing upon any
default, omission or failure of performance hereunder shall
impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised
from time to time as often as may be deemed expedient. No
waiver, amendment, release or modification of this Guaranty
Agreement shall be established by conduct, custom or course of
dealing, but solely by an instrument in writing as provided in
Section 5.1 hereof. No remedy conferred herein or upon or for
the benefit of the Holders is intended to be exclusive of any
other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Guaranty Agreement or now or
hereafter existing at law or in equity. In order to entitle the
Holders, or the Indenture Trustee on behalf of the Holders to
exercise any remedy reserved to the Holders in this Guaranty
Agreement, it shall not be necessary to give any notice, other
than such notice as may be herein expressly required. In the
event any provision contained in this Guaranty Agreement should
be breached by any Guarantor and thereafter duly waived by the
Holders, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach
hereunder.
Section 5.3. Usury Savings Clause. It is not the
intention of the Holders or the Guarantors to obligate any
Guarantor to pay interest in excess of that legally permitted to
be paid by such Guarantor under applicable law. Should it be
determined that any portion of the Notes guaranteed by the
Guarantors under this Guaranty Agreement constitutes interest in
excess of the maximum amount of interest which such Guarantor (in
such capacity) may lawfully be required to pay under applicable
law, the obligation of such Guarantor to pay such interest shall
automatically be limited to the payment thereof at the maximum
rate so permitted under applicable law.
Section 5.4. Notices. All notices and other
communications provided for hereunder shall be in writing and
shall be delivered or mailed prepaid by registered or certified
mail or overnight air carrier, or by facsimile communication, if
to any Guarantor in care of Care Enterprises, Inc., 2742 Dow
Avenue, Tustin, California 92680-7245, Attention: Chief
Financial Officer, Telefacsimile number: (714) 544-4443 extension
2701, and if to the Holders at their respective addresses as set
forth in the records of the Company, or to such other address as
any Guarantor or a Holder shall have designated by written notice
to the Holders or the Guarantors, as the case may be; provided,
however, that a notice to any party by overnight air courier
shall only be effective if delivered to such party at a street
address designated for such purpose, and a notice to such party
by facsimile communication shall only be effective if made by
confirmed transmission to such party at a telephone number
designated for such purpose and promptly followed by the delivery
of such notice by registered or certified mail or overnight air
courier, as set forth above.
Section 5.5. Submission to Jurisdiction. Each Guarantor
hereby consents to the jurisdiction of any state or Federal court
located within the County of New York, State of New York, and
irrevocably agrees that all actions or proceedings relating to
this Agreement or the Notes may be litigated in such courts, and
each Guarantor waives any objection which it may have based on
improper venue or forum non conveniens to the conduct of any
proceeding in any such court, and consents that all service of
process may be made by certified mail or messenger directed to it
at the address of the Company set forth in Section 5.4 or to its
agent referred to below at such agent's address set forth below
and that service so made shall be deemed to be completed upon the
earlier of actual receipt or the date identified on the return
receipt for the certified mailing to the Guarantor's or such
agent's address, as the case may be, in accordance herewith.
Each Guarantor hereby irrevocably appoints CT Corporation System,
with an office on the date hereof at 1633 Broadway, New York, New
York 10019, as its agent for the purpose of accepting service of
any process within the State of New York. Nothing contained in
this section shall affect the right of any holder of Notes to
serve legal process in any other manner permitted by law or to
bring any action or proceeding in the courts of any jurisdiction
against the Guarantor or to enforce a judgment obtained in the
courts of any other jurisdiction.
Section 5.6. Severability. All provisions contained in
this Guaranty Agreement are severable and the invalidity or
unenforceability of any provision shall in no manner affect or
impair the validity, legality and enforceability of the remaining
provisions contained herein.
Section 5.7. Successors and Assigns. All agreements,
covenants, representations and warranties in this Guaranty
Agreement shall survive the execution and delivery of the Notes
to the original Holders and all such agreements, covenants,
representations and warranties shall be binding upon the
respective successors and assigns of each Guarantor and shall
inure to the benefit of the respective successors and assigns of
the Holders (including each and every transferee and subsequent
holder of any Note), whether so expressed or not.
Section 5.8. Counterparts. This Guaranty Agreement may be
executed simultaneously in several counterparts, each of which
shall be deemed an original, and all of which together shall
constitute one and the same instrument.
Section 5.9. Headings. The descriptive headings of the
several sections of this Guaranty Agreement are inserted for
convenience only and do not constitute a part of this Guaranty
Agreement.
Section 5.10. Governing Law. This Guaranty Agreement shall
in all respects be governed by and construed in accordance with
the laws of the State of New York.
In Witness Whereof, each Guarantor has caused this Guaranty
Agreement to be dated as of December 15, 1993 for convenience
only but has actually executed and delivered this Guaranty
Agreement on the 30 day of December, 1993.
Americare Homecare, Inc.
Americare Midwest, Inc.
Americare of West Virginia, Inc.
Beckley Health Care Corp.
Care Enterprises West
Care Finance, Inc.
Care Home Health Services
Circleville Health Care Corp.
Dunbar Health Care Corp.
Glenville Health Care, Inc.
HealthCare Network
Marion Health Care Corp.
New Lexington Health Care Corp.
Putnam Health Care Corp.
Salem Health Care Corp.
By /s/ GARY L. MASSIMINO
Its Executive Vice President
Wells Fargo Bank
333 South Grand, Suite 940
Los Angeles, CA 90071
December 29, 1993
Care Enterprises, Inc.
2742 Dow Avenue
Tustin, CA 92680-7245
Gentlemen:
Wells Fargo Bank, National Association ("Bank"), has issued
the five (5) standby letters of credit listed on Exhibit "A"
attached hereto (collectively, "Standby Letters of Credit" and
each, a "Standby Letter of Credit") for the account of Care
Enterprises, Inc. ("Borrower").
Bank had commenced issuing the Standby Letters of Credit
pursuant to a credit agreement between Borrower and certain of
its subsidiaries as "Borrowers" and Bank and Citibank, N.A. as
"Banks." Subsequent to the execution and delivery between said
"Banks" and said "Borrowers" of the Amended and Restated Credit
Agreement dated December 31, 1990, Bank sold to Foothill Capital
Corporation, a California corporation ("Foothill"), certain of
its interest in the credit extensions to said "Borrowers."
You have informed us that you are in the process of making
arrangements to repay your indebtedness to Citibank and Foothill,
and in connection therewith you have requested that Bank release
Foothill and Citibank of any obligation to reimburse Bank in the
event Bank makes payment under any of the Standby Letters of
Credit. In order to induce Bank to grant such a release, you
have offered Bank cash collateral to secure Borrower's
reimbursement obligations.
This letter will confirm Bank's agreement to release
Foothill and Citibank of any such reimbursement obligations in
connection with the Standby Letters of Credit, subject to all of
the following terms and conditions:
1. Borrower shall provide Bank with cash collateral in the
amount of $6,371,570.00 (to be deposited by Borrower with Bank),
to secure all present and future indebtedness of Borrower to
Bank, including without limitation the obligation of Borrower to
reimburse Bank for the amount of any draft paid by Bank under any
Standby Letter of Credit, together with interest thereon and all
costs, expenses and fees related thereto. Such security interest
shall be evidenced by and subject to the terms of a security
agreement in form and substance satisfactory to Bank. Such cash
collateral shall be held in an interest bearing account with Bank
of a nature mutually acceptable to Bank and Borrower. Interest
earned on such principle amount shall also be part of the
collateral, but in the absence of a default by Borrower under its
agreements with Bank, Borrower shall be permitted to withdraw
interest earned on such principle on a quarterly basis.
2. In connection with the Standby Letters of Credit,
Borrower agrees to pay Bank fees as follows:
(a) Borrower shall pay to Bank a $10,000.00 fee for each
quarter during which any Standby Letter of Credit is outstanding
in any amount for any period of time. The first such $10,000.00
fee shall be due and payable on January 1, 1994, for the first
quarter of 1994. Such $10,000.00 fee shall continue to be
payable on the first day of each quarter thereafter.
(b) Borrower shall pay to Bank an annual fee which is 1.5%
per annum of the aggregate outstanding undrawn amount of the
Standby Letters of Credit (computed no the basis of a 360-day
year, actual days elapsed), commencing January 1, 1994. Such fee
shall be calculated as of each year end thereafter. Borrower
shall prepay such fee for 1994, by a payment to Bank of
$93,570.00. If at year end or at such earlier time as all the
Standby Letters of Credit have expired or been canceled, it is
determined that Borrower has overpaid such fee, then Bank shall
refund the unearned portion of such fee. Similar arrangements
for prepayment of the annual fee shall be made after year end if
for any reason any Standby Letter of Credit is outstanding
thereafter (with the amount to be prepaid determined by Bank on
the basis of the then undrawn amount of the Standby Letters of
Credit).
3. Each Standby Letter of Credit has an expiration date as
indicated on Exhibit "A" hereto. Notwithstanding anything herein
to the contrary, so long as Borrower is not in default to Bank
herein to the contrary, so long as Borrower is not in default to
Bank hereunder or under any other agreement with Bank, Bank will
agree to extend each Standby Letter of Credit to the date
indicated on Exhibit "A". All extensions of Standby Letters of
Credit shall be subject to the execution and delivery to Bank by
Borrower of such amendment documents as Bank may require and the
payment of Bank's standard amendment fees for such an amendment.
4. Borrower agrees to furnish with Bank with such new
reimbursement agreements as Bank may require in connection with
the Standby Letters of Credit; provided, however, that in the
absence of such a demand by Bank for new agreements, the Standby
Letter of Credit reimbursement agreements heretofore executed and
delivered by Borrower to Bank shall continue in full force and
effect, as modified hereby. Notwithstanding anything to the
contrary in such agreements, it is hereby agreed between Bank and
Borrower that (a) Borrower shall reimburse Bank immediately for
the amount of any draft pad by Bank under any of the Standby
Letters of Credit, and pay Bank's standard negotiation fee in
connection with such draft, and (b) the amount of any such draft
paid by Bank which is not immediately reimbursed by Borrower
shall bear interest from the date such amount is paid by Bank to
the date such amount is fully reimbursed by Borrower at a rate
per annum four percent (4.00) above Bank's Prime Rate in effect
from time to time (computed on the basis of a 360-day year,
actual days elapsed). Borrower hereby authorizes Bank to debit
any of the cash collateral accounts maintained by Borrower with
Bank for all amounts due Bank in connection with the Standby
Letters of Credit, including without limitation the fees due in
accordance with this letter.
5. Borrower hereby represents to Bank that this agreement
and the transactions contemplated hereby do not violate any
agreement between Borrower and Foothill or between borrower and
Citibank. Borrower hereby agrees to indemnify Bank against any
claim asserted by bank against Foothill or Citibank that this
agreement or any of the transactions contemplated hereby violated
or interfered with any agreement between Borrower and Foothill or
Citibank.
6. Borrower shall reimburse Bank for all costs and
expenses, including reasonable attorneys' fees (including the
allocated costs of Bank's in-house counsel) expended or incurred
by Bank in connection with the negotiation and preparation of
this letter and all documents and instruments required in
connection herewith, including without limitation any documents
or instruments required to be delivered by Bank to Foothill
and/or Citibank in connection with the repayment of Borrower's
obligations to those lenders.
7. It is a condition precedent to Bank's obligations
hereunder, that all of the following conditions shall be
satisfied on or before December 31, 1993:
(a) This letter or a copy hereof shall be executed by
Borrower and delivered to Bank.
(b) Borrower shall deposit the cash collateral with Bank as
required hereunder, and execute and deliver to Bank the security
agreement as required hereunder.
(c) Borrower shall be in compliance with this letter and
the terms of all other agreements with Bank.
8. Except as expressly provided herein, all terms and
provisions of all documents, instruments and agreements between
Bank and Borrower in connection with the Standby Letters of
Credit shall continue in full force a effect, without waiver or
modification. Nothing herein is intended to release any affiliate
of Borrower which may be a co-applicant on any of the Standby
Letters of Credit, and any such co-applicant shall, if Bank
requests, execute such new reimbursement agreements as may be
required by Bank hereunder.
Please arrange to have this letter or a copy hereof executed
and returned to the undersigned in accordance with the foregoing.
Sincerely,
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ JAMES E. DUNCAN
Title: Assistant Vice President
Acknowledged and agreed to by:
CARE ENTERPRISES, INC.
By: /s/ GARY L. MASSIMINO
Title: Gary L. Massimino
Executive Vice President
Chief Financial Officer
CARE ENTERPRISES, INC.
8.10% Senior Secured Note
Due December 15, 2000
PPN: 14165# AA 6
No. 1
December 30, 1993
$12,000,000.00
Care Enterprises, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
or registered assigns
on the fifteenth day of December, 2000
the principal amount of
TWELVE MILLION AND 00/100 DOLLARS ($12,000,000.00)
and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time
remaining unpaid hereon at the rate of 8.10% per annum from the
date hereof until maturity, payable semiannually on the fifteenth
day of each January and July in each year (commencing January 15,
1994) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at
the rate of 10.10% per annum after the due date, whether by
acceleration or otherwise, until paid.
Payments of principal, premium, if any, and interest shall
be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of
public and private debts. Such principal, premium, if any, and
interest shall be payable upon presentation of this Note at the
principal corporate trust office of State Street Bank and Trust
Company of Connecticut, National Association, (the "Indenture
Trustee"), located at 750 Main Street, Hartford, Connecticut
06103, the Indenture Trustee under the Indenture of Trust dated
as of December 15, 1993 (herein together with any supplements and
amendments thereto called the "Indenture") between the Company
and the Indenture Trustee.
This Note is one of the 8.10% Senior Secured Notes due
December 15, 2000 (the "Notes") of the Company in the aggregate
principal amount of $30,000,000 issued or to be issued under and
equally and ratably secured by the Indenture and the Mortgages
referred to therein and is entitled to the benefits of the
Guaranty Agreement dated as of December 15, 1993 from certain
subsidiaries of the Company named therein. Reference is hereby
made to the Indenture and said Mortgages for a description of the
property subject thereto, the nature and extent of the security
for the Notes, the rights of the holders of the Notes, the
Indenture Trustee and the Company in respect thereof, and the
terms upon which the Notes are to be authenticated and delivered.
This Note and the other Notes outstanding under the
Indenture may be declared due prior to their expressed maturity
dates and certain prepayments are required to be made thereon,
all in the events, on the terms and in the manner and amounts as
provided in the Indenture.
The Notes are not subject to prepayment or redemption at
the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with
the premium, if any, set forth in the Indenture.
On and subject to the conditions contained in the
Indenture, this Note is transferable by the registered holder
hereof in person or by its duly authorized attorney on the
Register (as defined in the Indenture) to be kept for the purpose
at said principal office of the Indenture Trustee. On and
subject to the conditions contained in the Indenture, this Note
is exchangeable for Notes of other denominations. The Company
and the Indenture Trustee shall deem and treat the person in
whose name a Note is registered on said Register as the absolute
owner and holder hereof (whether or not this Note shall be
overdue) for the purpose of receiving payment and for all other
purposes, and neither the Company nor the Indenture Trustee shall
be affected by any notice to the contrary.
This Note shall not be valid until the certificate of
authentication hereon shall have been signed by the Indenture
Trustee.
This Note and the Indenture are governed by the laws of the
State of New York.
This Note shall not be valid or become obligatory for any
purpose unless and until the Certificate of Authentication hereon
shall have been executed by the Indenture Trustee.
CARE ENTERPRISES, INC.
By /s/ GARY L. MASSIMINO
Its Executive Vice President
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes described in the
within-mentioned Indenture.
State Street Bank and Trust
Company of Connecticut,
National Association,
as Indenture Trustee
By /s/ W. JEFFREY KRAMER
Authorized Officer
CARE ENTERPRISES, INC.
8.10% Senior Secured Note
Due December 15, 2000
PPN: 14165# AA 6
No. 2
December 30, 1993
$1,000,000.00
Care Enterprises, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY OF AMERICA
or registered assigns
on the fifteenth day of December, 2000
the principal amount of
ONE MILLION DOLLARS AND 00/100 ($1,000,000.00)
and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time
remaining unpaid hereon at the rate of 8.10% per annum from the
date hereof until maturity, payable semiannually on the fifteenth
day of each January and July in each year (commencing January 15,
1994) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at
the rate of 10.10% per annum after the due date, whether by
acceleration or otherwise, until paid.
Payments of principal, premium, if any, and interest shall
be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of
public and private debts. Such principal, premium, if any, and
interest shall be payable upon presentation of this Note at the
principal corporate trust office of State Street Bank and Trust
Company of Connecticut, National Association, (the "Indenture
Trustee"), located at 750 Main Street, Hartford, Connecticut
06103, the Indenture Trustee under the Indenture of Trust dated
as of December 15, 1993 (herein together with any supplements and
amendments thereto called the "Indenture") between the Company
and the Indenture Trustee.
This Note is one of the 8.10% Senior Secured Notes due
December 15, 2000 (the "Notes") of the Company in the aggregate
principal amount of $30,000,000 issued or to be issued under and
equally and ratably secured by the Indenture and the Mortgages
referred to therein and is entitled to the benefits of the
Guaranty Agreement dated as of December 15, 1993 from certain
subsidiaries of the Company named therein. Reference is hereby
made to the Indenture and said Mortgages for a description of the
property subject thereto, the nature and extent of the security
for the Notes, the rights of the holders of the Notes, the
Indenture Trustee and the Company in respect thereof, and the
terms upon which the Notes are to be authenticated and delivered.
This Note and the other Notes outstanding under the
Indenture may be declared due prior to their expressed maturity
dates and certain prepayments are required to be made thereon,
all in the events, on the terms and in the manner and amounts as
provided in the Indenture.
The Notes are not subject to prepayment or redemption at
the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with
the premium, if any, set forth in the Indenture.
On and subject to the conditions contained in the
Indenture, this Note is transferable by the registered holder
hereof in person or by its duly authorized attorney on the
Register (as defined in the Indenture) to be kept for the purpose
at said principal office of the Indenture Trustee. On and
subject to the conditions contained in the Indenture, this Note
is exchangeable for Notes of other denominations. The Company
and the Indenture Trustee shall deem and treat the person in
whose name a Note is registered on said Register as the absolute
owner and holder hereof (whether or not this Note shall be
overdue) for the purpose of receiving payment and for all other
purposes, and neither the Company nor the Indenture Trustee shall
be affected by any notice to the contrary.
This Note shall not be valid until the certificate of
authentication hereon shall have been signed by the Indenture
Trustee.
This Note and the Indenture are governed by the laws of the
State of New York.
This Note shall not be valid or become obligatory for any
purpose unless and until the Certificate of Authentication hereon
shall have been executed by the Indenture Trustee.
CARE ENTERPRISES, INC.
By /s/ GARY L. MASSIMINO
Its Executive Vice President
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes described in the
within-mentioned Indenture.
State Street Bank and Trust
Company of Connecticut,
National Association,
as Indenture Trustee
By /s/ W. JEFFREY KRAMER
Authorized Officer
CARE ENTERPRISES, INC.
8.10% Senior Secured Note
Due December 15, 2000
PPN: 14165# AA 6
No. 3
December 30, 1993
$2,000,000.00
Care Enterprises, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
MELLON BANK, N.A., TRUSTEE UNDER MASTER TRUST
AGREEMENT OF NYNEX CORPORATION DATED JANUARY 1, 1984
FOR EMPLOYEE PENSION PLANS-NYNEX-JOHN HANCOCK-PRIVATE PLACEMENT
or registered assigns
on the fifteenth day of December, 2000
the principal amount of
TWO MILLION AND 00/100 DOLLARS ($2,000,000.00)
and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time
remaining unpaid hereon at the rate of 8.10% per annum from the
date hereof until maturity, payable semiannually on the fifteenth
day of each January and July in each year (commencing January 15,
1994) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at
the rate of 10.10% per annum after the due date, whether by
acceleration or otherwise, until paid.
Payments of principal, premium, if any, and interest shall
be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of
public and private debts. Such principal, premium, if any, and
interest shall be payable upon presentation of this Note at the
principal corporate trust office of State Street Bank and Trust
Company of Connecticut, National Association, (the "Indenture
Trustee"), located at 750 Main Street, Hartford, Connecticut
06103, the Indenture Trustee under the Indenture of Trust dated
as of December 15, 1993 (herein together with any supplements and
amendments thereto called the "Indenture") between the Company
and the Indenture Trustee.
This Note is one of the 8.10% Senior Secured Notes due
December 15, 2000 (the "Notes") of the Company in the aggregate
principal amount of $30,000,000 issued or to be issued under and
equally and ratably secured by the Indenture and the Mortgages
referred to therein and is entitled to the benefits of the
Guaranty Agreement dated as of December 15, 1993 from certain
subsidiaries of the Company named therein. Reference is hereby
made to the Indenture and said Mortgages for a description of the
property subject thereto, the nature and extent of the security
for the Notes, the rights of the holders of the Notes, the
Indenture Trustee and the Company in respect thereof, and the
terms upon which the Notes are to be authenticated and delivered.
This Note and the other Notes outstanding under the
Indenture may be declared due prior to their expressed maturity
dates and certain prepayments are required to be made thereon,
all in the events, on the terms and in the manner and amounts as
provided in the Indenture.
The Notes are not subject to prepayment or redemption at
the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with
the premium, if any, set forth in the Indenture.
On and subject to the conditions contained in the
Indenture, this Note is transferable by the registered holder
hereof in person or by its duly authorized attorney on the
Register (as defined in the Indenture) to be kept for the purpose
at said principal office of the Indenture Trustee. On and
subject to the conditions contained in the Indenture, this Note
is exchangeable for Notes of other denominations. The Company
and the Indenture Trustee shall deem and treat the person in
whose name a Note is registered on said Register as the absolute
owner and holder hereof (whether or not this Note shall be
overdue) for the purpose of receiving payment and for all other
purposes, and neither the Company nor the Indenture Trustee shall
be affected by any notice to the contrary.
This Note shall not be valid until the certificate of
authentication hereon shall have been signed by the Indenture
Trustee.
This Note and the Indenture are governed by the laws of the
State of New York.
This Note shall not be valid or become obligatory for any
purpose unless and until the Certificate of Authentication hereon
shall have been executed by the Indenture Trustee.
CARE ENTERPRISES, INC.
By /s/ GARY L. MASSIMINO
Its Executive Vice President
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes described in the
within-mentioned Indenture.
State Street Bank and Trust
Company of Connecticut,
National Association,
as Indenture Trustee
By /s/ W. JEFFREY KRAMER
Authorized Officer
CARE ENTERPRISES, INC.
8.10% Senior Secured Note
Due December 15, 2000
PPN: 14165# AA 6
No. 4
December 30, 1993
$15,000,000.00
Care Enterprises, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
ANCHOR NATIONAL LIFE INSURANCE COMPANY
or registered assigns
on the fifteenth day of December, 2000
the principal amount of
FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00)
and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time
remaining unpaid hereon at the rate of 8.10% per annum from the
date hereof until maturity, payable semiannually on the fifteenth
day of each January and July in each year (commencing January 15,
1994) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at
the rate of 10.10% per annum after the due date, whether by
acceleration or otherwise, until paid.
Payments of principal, premium, if any, and interest shall
be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of
public and private debts. Such principal, premium, if any, and
interest shall be payable upon presentation of this Note at the
principal corporate trust office of State Street Bank and Trust
Company of Connecticut, National Association, (the "Indenture
Trustee"), located at 750 Main Street, Hartford, Connecticut
06103, the Indenture Trustee under the Indenture of Trust dated
as of December 15, 1993 (herein together with any supplements and
amendments thereto called the "Indenture") between the Company
and the Indenture Trustee.
This Note is one of the 8.10% Senior Secured Notes due
December 15, 2000 (the "Notes") of the Company in the aggregate
principal amount of $30,000,000 issued or to be issued under and
equally and ratably secured by the Indenture and the Mortgages
referred to therein and is entitled to the benefits of the
Guaranty Agreement dated as of December 15, 1993 from certain
subsidiaries of the Company named therein. Reference is hereby
made to the Indenture and said Mortgages for a description of the
property subject thereto, the nature and extent of the security
for the Notes, the rights of the holders of the Notes, the
Indenture Trustee and the Company in respect thereof, and the
terms upon which the Notes are to be authenticated and delivered.
This Note and the other Notes outstanding under the
Indenture may be declared due prior to their expressed maturity
dates and certain prepayments are required to be made thereon,
all in the events, on the terms and in the manner and amounts as
provided in the Indenture.
The Notes are not subject to prepayment or redemption at
the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with
the premium, if any, set forth in the Indenture.
On and subject to the conditions contained in the
Indenture, this Note is transferable by the registered holder
hereof in person or by its duly authorized attorney on the
Register (as defined in the Indenture) to be kept for the purpose
at said principal office of the Indenture Trustee. On and
subject to the conditions contained in the Indenture, this Note
is exchangeable for Notes of other denominations. The Company
and the Indenture Trustee shall deem and treat the person in
whose name a Note is registered on said Register as the absolute
owner and holder hereof (whether or not this Note shall be
overdue) for the purpose of receiving payment and for all other
purposes, and neither the Company nor the Indenture Trustee shall
be affected by any notice to the contrary.
This Note shall not be valid until the certificate of
authentication hereon shall have been signed by the Indenture
Trustee.
This Note and the Indenture are governed by the laws of the
State of New York.
This Note shall not be valid or become obligatory for any
purpose unless and until the Certificate of Authentication hereon
shall have been executed by the Indenture Trustee.
CARE ENTERPRISES, INC.
By /s/ GARY L. MASSIMINO
Its Executive Vice President
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes described in the
within-mentioned Indenture.
State Street Bank and Trust
Company of Connecticut,
National Association,
as Indenture Trustee
By /s/ W. JEFFREY KRAMER
Authorized Officer
